Lok Sabha Question No. 1264 (UNSTARRED), answered on 2018-12-18
Subject: Revenue from Fertilizer Plants
Ministry: CHEMICALS AND FERTILIZERS
Asked by: SIRAJUDDIN AJMAL

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

LOK SABHA UNSTARRED QUESTION NO. 1264 TO BE ANSWERED ON 18.12.2018

## Revenue from Fertilizer Plants

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## 1264.  SHRI SIRAJUDDIN AJMAL :

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

- (a) Whether the Government proposes to collect revenue by auctioning of various equipment etc. of closed chemical and fertilizer plants under the Ministry and if so, the details thereof;
- (b) whether the Government proposes to revive/reopen the said units/plants which are lying sick/closed;
- (c) if so, the action/steps taken so far and the time by which these plants are likely to be revived/made functional; and
- (d) 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/UTwise?

## ANSWER

## MINISTER  OF  STATE  INDEPENDENT  CHARGE  FOR  MINISTRY  OF  PLANNING  AND MINISTER OF STATE IN THE MINISTRY OF CHEMICALS AND FERTILIZERS (RAO INDERJIT SINGH)

- (a) CCEA  approved  on  9.5.2013  and  the  Cabinet  approved  on  13.7.2016  sale  of unusable/scrap items of closed fertilizer plants of The Fertilizer Corporation of India Ltd (FCIL) with the assistance of Metal Scrap Trade Corporation (MSTC) and Project and Development India Limited (PDIL) and the sale proceeds shall be used by FCIL and  Hindustan Fertilizer Corporation  Ltd  (HFCL)  for  settlement  of  their  liabilities  and  utilize  surplus  fund  for  their administrative liabilities.
-  Similarly, CCEA approved on 25.05.2016 and the Cabinet approved on 13.7.2016 for sale of unusable/scrap items of closed fertilizer plants of Hindustan Fertilizer Corporation Ltd (HFCL)  with  the  assistance  of  Metal  Scrap  Trade  Corporation  (MSTC)  and  Project  and Development India Limited (PDIL) and the sale proceeds shall be used by FCIL and HFCL for settlement of their liabilities and utilize surplus fund for their administrative liabilities.
-  Union  Cabinet  in  its  meeting  held  on  28.12.2016,  decided  for  the  closure  of  Indian Drugs  and  Pharmaceuticals  Ltd.  (IDPL)  &  its  subsidiaries  and  Rajasthan  Drugs  and Pharmaceuticals  Ltd.  (RDPL)  and  strategic  disinvestment  of  Hindustan  Antibiotics  Limited (HAL)  and  Bengal  Chemicals  &  Pharmaceuticals  Ltd.  (BCPL)  after  meeting  their  liabilities

from proceeds of sale of their surplus land to Government of agencies. The follow up action includes selling/auctioning of equipment.

-  There are three chemical PSUs under the Department of Chemicals & Petrochemicals viz. Hindustan  Organic  Chemicals  Ltd.  (HOCL),  Hindustan  Fluorocarbons  Ltd.  (HFL;  a subsidiary  company  of  HOCL)  and  HIL  (India)  Ltd.  (HIL).  As  on  date,  none  of  these  three PSUs has been closed down. However, as per the restructuring plan of HOCL approved by the  Government  on  17.05.2017,  all  plant  operations  at  Rasayani  unit  of  HOCL  has  been closed  down except N2O4 plant which has been transferred to the Department of Space / ISRO along with 20 acres of land and employees associated with the plant.
-  Financial implication of HOCL's restructuring plan is Rs.1008.67 crore (cash) which is to  be  met  partly  from  sale  of  442  acres  HOCL  land  at  Rasayani  to  Bharat  Petroleum Corporation Ltd. (BPCL) and the balance through bridge loan from the Govt. The funds are to be used to liquidate the various liabilities of the company, including payment of outstanding salary and statutory dues of employees and repayment of Govt. guaranteed bonds of Rs.250 crore,  and  for  giving  VRS/VSS  to  the  Rasayani  unit  employees  except  those  retained  as skeletal staff. HOCL's liabilities towards Government of India loans, interest, guarantee fee, etc.  dues  are  to  be  settled  from  the  disposal  of  remaining  unencumbered  land  and  other assets of Rasayani unit.

(b) & (c): Government has decided to revive the four closed fertilizer  units  of  FCIL  and one  closed  fertilizer  plant  of  HFCL  through  joint  ventures  of  nominated  PSUs,  namely Ramagundam  Unit  of  FCIL  by  Engineers  India  Ltd  (EIL)  &  National  Fertilizer  Ltd  (NFL); Talcher Unit by Rashtriya Chemicals & Fertilizers Ltd (RCF), The GAIL (India) Ltd {GAIL} & Coal India Ltd (CIL); Sindri and Gorakhpur Units of FCIL & Barauni unit of HFCL by National Thermal Power Corporation  Ltd  (NTPC),  Coal  India  Ltd  (CIL)  &  Indian  Oil  Corporation  Ltd (IOCL).  FCIL/HFCL  are  the  JV  partner  in  these  JVs  with  11%  equity  in  lieu  of  the  land  & infrastructure being provided by FCIL and HFCL.  Three joint venture companies have been formed for revival of the 5 closed fertilizer units namely, Ramagundam Fertilizers & Chemicals Limited(RFCL) for Ramagundam unit, Talcher Fertilizers Limited (TFL) for Tacher Unit and Hindustan Urvarak & Rasayan Limited (HURL) for reviving Barauni, Sindri & Gorakhpur Units. Revival activities are in progress at all the project sites. The Urea Plant at Ramagundam is likely to be commissioned in by June,2019; Barauni, Sindri & Gorakhpur Plants are likely to be commissioned in by 2021 and Talcher Plant is likely to be commissioned in 2022.

-  Present status of implementation of the restructuring plan of HOCL under administrative control of Department of Chemical and Petrochemical is as follows:
- (i) All plants of Rasayani unit except N2O4 plant have been closed down.
- (ii) N2O4  plant  has  been  transferred  to  ISRO along  with 20  acres  land  and  131 employees associated with the plant.
- (iii) Out of 442 acres land at Rasayani to be sold to BPCL, sale transaction for 251 acres have been completed.

(iv) Approval of the Government for sale of additional 242 acres (+/- 10%) land at Rasayani to BPCL and for lease transfer of 1000 sq m land at Kharghar, Navi Mumbai, to NALCO has been accorded.

(v) All the 10 Nestle flats (Mumbai), closed down plants and utility blocks have been successfully e-auctioned through MSTC Ltd..

(vi) All  the  non-regular  employees  and  about  313  regular  employees  of  Rasayani unit have been separated through VRS/VSS. While 6 VRS optees are being temporarily retained for implementing the restructuring plan and 7 employees are being retained as skeletal staff for HOCL's corporate office, 23 employees who did not opt for VRS have been transferred to the company's Kochi unit.

(vii) Liability relating to redemption of Govt. guaranteed bonds of Rs.250 crore has been fully settled by HOCL from the GoI bridge loan.

After implementation of the restructuring plan, the Phenol/Acetone plant at Kochi unit of HOCL resumed regular operations from July, 2017 and has been operating regularly since then  with  positive  contribution.  This  has  enabled  HOCL  to  earn  net  profit  of  about  Rs.24 crore (Prov.)  from  Kochi  unit  operations  during  the  current  FY  2018-19  (up  to  September, 2018).

(d): The Chemical sector is de-licensed. 100% FDI is permissible in the chemical sector. The  entrepreneurs  are  setting  up  units  in  the  private  sector  based  on  techno  economic feasibility, demand and supply scenario and cost of feedstock/raw materials etc. Government has taken various steps to enhance the investment including rationalization of custom duty on the feedstock/building blocks for having synergy in the complete value chain for boosting the Chemical  sector  and  competiveness  of  the  industry  in  the  country.  In  addition,  various seminars/workshops Event are held for facilitating exchange of technology, ideas, innovations for growth in the chemical sector.

 Department of  Fertilizers  regularly  takes  up  the  matter  with  Ministry  of  Petroleum  & Natural Gas/Ministry of Coal regarding issue of feedstock, i.e Natural Gas/Coal, as and when required.

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