The Cabinet Committee on Economic Affairs (CCEA) is likely to soon approve a revival package for eight closed fertiliser units that were owned by Fertiliser Corporation of India (FCI) and Hindustan Fertiliser Corporation Ltd. (HFC).
Last month, the Department of Fertilisers (DoF) under the Ministry of Chemicals and Fertilisers had prepared and sent a note on this to the cabinet for its final nod. The main objective is to attract Greenfield investments in to the sector.
In its note the DoF has suggested a two-pronged strategy to revive the closed units. Amongst the eight, three units are owned by HFC located in at Barauni, Durgapur and Haldia while five of these are owned by FCI that are in Sindhri, Ramagundam, Talcher, Korba and Gorakhpur, a senior DoF official told Business Standard.
According to the proposal suggested by DoF, the Sindri fertiliser plant in Dhanbad, Talcher unit in Orissa and Ramagundam near Hyderabad would be revived by Steel Authority of India Ltd (SAIL) and National Fertilisers Limited (NFL) on nomination basis.
SAIL has already announced their plans to set up a power plant and steel manufacturing facility in Sindri.
Revival of the remaining closed fertiliser units would be carried on through the bidding route. Some of the units have been closed for more than a decade. Each unit would require Rs 3,000 crore to Rs 5,000 crore depending on the specifications.
The revival of these units depends on ensuring continuous supply of feedstock — natural or coal-based gas. At present, 32-40 mmscmd gas is available and another 30 mmscmd is likely to be added soon. The DoF is in talks with gas companies to know how much gas is actually available. Currently, India meets 70 per cent of the fertiliser demand with the rest being imported from China, which has 2.5 times more capacity than India’s 36 million tonne.
The government is also in talks with the Andhra Pradesh government to seek tax incentives for reviving the Ramagundam unit.
