Lok Sabha Question No. 2705 (UNSTARRED), answered on 2019-07-09
Subject: Revenue from Auction
Ministry: CHEMICALS AND FERTILIZERS
Asked by: Badruddin Ajmal

## GOVERNMENT OF INDIA MINISTRY OF CHEMICALS AND FERTILIZERS DEPARTMENT OF CHEMICALS AND PETROCHEMICALS

## LOK SABHA UNSTARRED QUESTION NO. 2705 TO BE ANSWERED ON 09.07.2019

## Revenue from Auction ****

## 2705.  SHRI M. BADRUDDIN AJMAL :

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

- (a)    Whether  the  Government  proposes  to  collect  revenue  by  the  auctioning  of various equipment,  etc.  of  closed  chemical  and  fertilizer  plants  under  the Ministry;
- (b)  if so, the details thereof and the action taken in this regard so far, State/UT and plant/unit-wise;
- (c) whether the Government proposes to revive/reopen the said units/plants which are  lying sick/closed;
- (d)   if so, the action/steps taken so far and the time by which these plants are likely to be    revived/made functional; and
- (e)   the other steps taken/being taken by the Government to provide feedstock for chemical and fertilizer plants and also to increase the production of chemicals in the country, State/UT-wise?

## ANSWER

## MINISTER  FOR  CHEMICALS  AND  FERTILIZERS  (SHRI  D.  V.  SADANANDA GOWDA)

(a) & (b):

- (i) There are three Chemical PSUs under the administrative control of Department of Chemicals and Petrochemicals viz. M/s Hindustan Organic Chemicals Ltd. (HOCL), M/s  HIL  (India)  Ltd.  (HIL)  and  M/s  Hindustan  Fluorocarbons  Ltd.  (HFL;  subsidiary company of HOCL). HOCL and HFL were registered with the erstwhile BIFR as sick companies.

No PSU under the Department has been closed down. However, with regard to HOCL that had two units located at Rasayani (Maharashtra) and Kochi (Kerala), the Rasayani unit of HOCL has been closed down (except for the Di-Nitrogen Tetroxide (N2O4) plant that has been transferred to ISRO on 'as is where is' basis, with about 20 acres of land and employees associated with the plant) under the restructuring plan of the company approved by the Government of India on 17.05.2017. As on 02.07.2019, the following assets of Rasayani unit, Maharashtra has been disposed of through eauction:

1. Closed  down  plants/machinery  have  been  auctioned  for  total  price  of Rs.19.52 crore
2. 10 flats of the company in Mumbai have been auctioned for total price of Rs.29.47 crore

(ii) Under Department of Fertilizers, vide Cabinet Committee on Economic Affairs (CCEA)  decision  dated  25.05.2016,  it  has  been  decided  that  Hindustan  Fertilizer Corporation Limited (HFCL) to take up sale of unusable assets of Barauni, Durgapur and Haldia Unit of HFCL with the assistance of M/s. Metal Scrap Trading Corporation (MSTC) and M/s. PDIL both central PSUs to utilize the proceeds for settlement of the dues of unsecured creditors.

Similarly,  Government  of  India  vide  CCEA  decision  dated  4.8.2011  gave approval  for  sale  of  unusable  items  of  different  units  of  FCIL  through  MSTC  and utilization of sale proceeds to settle the dues of unsecured creditors of FCIL and to met the administrative expenses.

The unusable items of Barauni Unit (Bihar State) of HFCL has been e-auctioned by  M/s.  MSTC  in  association  with  M/s.  PDIL  and  completed  on  11.05.2018.  The auctioning of unusable items of Haldia & Durgapur Units (West Bengal) of HFCL has been e-auctioned by M/s. MSTC in association with M/s. PDIL. The e-auction of sale of unusable items of different Units of The Fertilizers Corporation of India Ltd. (FCIL) have been completed as detailed below:

1. Ramagundam (Telangana) - e-auction done on 6.1.2015
2. Gorakhpur (Uttar Pradesh) - e-auction done on 13.1.2017
3. Sindri (Jharkhand) - e-auction done on 2.2.2018.
4. Talcher (Odisha) - e-auction done on 9.5.2014.

(iii) Under Department of Pharmaceuticals, the Union Cabinet in its meeting held on 28.12.2016 has decided for the closure of Indian Drugs and Pharmaceuticals Ltd. (IDPL) and Rajasthan Drugs and Pharmaceuticals Ltd. (RDPL) and strategic sale of Hindustan  Antibiotics  Ltd.  (HAL)  and  Bengal  Chemicals  and  Pharmaceuticals  Ltd. (BCPL) after meeting their liabilities from the sale of their surplus land to Government agencies.

The Cabinet has further approved for meeting the liabilities of the employees and to implement Voluntary Retirement Scheme/Voluntary Separation Scheme before the closure/strategic sale of identified PSUs.

The land sale of PSUs did not materialize on account of lack of response from Govt. agencies to the tenders invited. As a result, the outstanding liabilities of PSUs could not be meet and hence, the process of closure /sale did not move forward.

Department had earlier approached the Cabinet on 05.02.2019 for modification of earlier decision and seeking upfront Budgetary Support to expedite closure/sale of PSUs. As the same could not be considered by the Cabinet, a fresh Cabinet Note, with  no  changes,  with  the  approval  of  Hon'ble  Minister  (C&F),      has  again  been submitted for consideration of the Cabinet on 21.06.2019.

## (c) & (d):

(i) After implementation of the restructuring plan of HOCL mentioned above, the Phenol/Acetone plant at Kochi unit of the company resumed regular operations from July  2017.  This  has  enabled  Kochi  unit  to  achieve  80%  capacity  utilisation  of Phenol/Acetone plant during 2018-19 and achieve turnover of Rs.472 crore with profit of about Rs.22 crore for the year 2018-19.

(ii) Government of India has decided to revive Barauni unit of Hindustan Fertilizer Corporation Limited (HFCL) and Gorakhpur, Sindri, Talcher & Ramagundam units of Fertilizer Corporation of India Limited (FCIL) through nomination route by setting up new Ammonia Urea plants of 12.7 LMTPA capacity at each location.

Barauni unit of HFCL and Sindri and Gorakhpur units of FCIL are being revived by M/s. Hindustan Urvarak & Rasayan Limited (HURL), a Joint Venture of National Thermal  Power  corporation  Limited  (NTPC),  Coal  India  Limited  (CIL),  Indian  Oil Corporation Limited (IOCL), FCIL & HFCL.

Talcher unit is being revived by M/s. Talcher Fertilizers Limited (TFL), a Joint Venture of Rashtriya Chemicals & Fertilizers Limited (RCF), CIL, Gas Authority of India Limited (GAIL) & FCIL.  Ramagundam unit revived by M/s. Ramagundam Fertilizers &  Chemicals  Limited  (RFCL),  a  Joint  Venture  of  Engineers  India  Limited  (EIL), National Fertilizers Limited (NFL) & FCIL.

(e):

(i) Government has taken various steps including rationalization of custom duty on the feedstock/building blocks for having synergy in the complete value chain for boosting  production  of  the  chemical  sector  and  to  enhance  competiveness  of  the industry in the country. In addition, various seminars/workshops e.g. 'INDIA-CHEM 2018' and 'INDIA-CHEM GUJARAT 2017' were held for dissemination of information on technologies, new emerging fields, innovations and Buyer Seller's meet etc. for growth in the chemical sector.

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