Lok Sabha Question No. 1774 (UNSTARRED), answered on 2018-03-06
Subject: Sick Fertilizer Units
Ministry: CHEMICALS AND FERTILIZERS
Asked by: BANSHILAL MAHTO

## GOVERNMENT OF INDIA MINISTRY OF CHEMICALS & FERTILIZERS DEPARTMENT OF FERTILIZERS

## LOK SABHA

## UNSTARRED QUESTION NO. 1774 TO BE ANSWERED ON: 06.03.2018

## Sick Fertilizer Units

## 1774+  DR. BANSHILAL MAHATO:

Will the Minister of CHEMICALS AND FERTILIZERS be pleased to state?

- (a) the details of sick fertilizer plants lying closed in the country along with the reasons thereof;
- (b) whether the Government proposes to revive these plants and if so, the steps taken  in this regard;
- (c) whether  the  Fertilizer  Corporation  of  India  Ltd.  (FCIL)  located  at  Korba, Chhattisgarh has also been included under the programme for reviving sick fertilizer plants;
- (d) if so, the details thereof; and
- (e) the details of modernization programme proposed for public sector fertilizer plants?

## ANSWER

MINISTER  OF  STATE  (INDEPENDENT  CHARGE)  FOR  THE  MINISTRY  OF PLANING  AND  MINISTER  OF  STATE  IN  THE  MINISTRY  OF  CHEMICALS  & FERILIZERS

## (RAO INDERJIT SINGH)

(a): At present, no sick Fertilizer plant is lying closed in the country.  However, in 2002, five units of FCIL located at Sindri (Jharkhand), Talchar (Odisha), Ramagundam (Telangana), Gorakhpur (Uttar Pradesh) & Korba (Chhattisgarh) and 3 Units of HFCL located at Barauni (Bihar), Durgapur & Haldia (West Bengal) had been consistently incurring losses due to a variety of reasons and were declared sick  by  the  Board  for  Industrial  and  Financial  Restructuring  (BIFR)  in  1992. Government of India (GoI) decided in 2002 to close operations of all fertilizer units of FCIL & HFCL.

- (b): Steps taken to revive above units are as follows:

Cabinet  Committee  Economic  Affairs(CCEA)  in  2007  gave    'in  principal' approval to examine the feasibility of revival of the closed units of FCIL and HFCL. Cabinet in 2008 accorded approval for revival of the closed units of FCIL and HFCL subject to non-recourse to Government funding. CCEA in 2011 approved revival of these units through 'nomination route' by Public Sector Undertakings (PSUs) and through  'bidding  route'  by  the  private  parties.  The  revival  of  Talcher,  Sindri  and Ramagundam units of FCIL on nomination basis by PSUs and revival of Gorakhpur and Korba Units of FCIL and Barauni, Durgapur and Haldia units of HFCL through 'bidding route.

CCEA in 2013 approved waiver of GoI loan and interest on FCIL to make the net worth of FCIL positive and to facilitate its de-registration from BIFR. Cabinet in its meeting held on 25.5.2016 approved Financial restructuring of HFCL by way of waiver  of  the  GoI  loans  and  the  outstanding  interest  on  GoI  loan.  This  enabled HFCL to get it de-registered from the purview of BIFR.

The  Union  Cabinet  in  its  meeting  held  on  13.7.2016  approved  to  revive Gorakhpur, Sindri & Barauni units by means of a Special Purpose Vehicle (SPV) of Public Sector Units namely, National Thermal Power Corporation Ltd (NTPC), Coal India  Ltd  (CIL),  Indian  Oil  Corporation  Ltd  (IOCL)  and  FCIL/HFCL,  through 'nomination route'.

(c) & (d):  Revival of Korba unit would be taken later on after viewing the progress of  revival  of  above  mentioned  units  of  FCIL/HFCL,  as  well  as  based  on  the assessment of demand-supply gap of urea in the country.

(e) : With  the  objective  of  promoting  energy  efficiency  in  urea  production, Department  of  Fertilizers  notified  New  Urea  Policy  -2015  (NUP-2015)  on  25 th May,2015  and  effective  from  1 st June,2015.  On  the  basis  of  actual  energy consumption and pre-set norms, the units have been divided into three groups and the preset energy norms fixed during earlier policies have been revised for financial years  2015-2016  to  2017-2018.  Further,  the  urea  units  have  been  given  target energy  consumption  norms  for  2018-19.  i.e  5.5  Gcal/MT  for  Group  I  units,  6.2 Gcal/MT for Group-II units and 6.5 Gcal/MT for Group-III units. It has been reported that  most  of  the  urea  manufacturing  units  are  adopting  the  latest  technology  for improving their energy efficiency.

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