Ailing fertiliser units likely to be revived by 2011-12
All ailing fertiliser units are likely to be revived by 2011-12 either through the JV route or by inducting a strategic partner, fertiliser minister Ram Vilas Paswan told the Lok Sabha on Thursday.
By Prabha, ET Bureau |
NEW DELHI: All ailing fertiliser units are likely to be revived by 2011-12 either through the JV route or by inducting a strategic partner, fertiliser minister Ram Vilas Paswan told the Lok Sabha on Thursday.
In addition, the government has also decided in-principle to consider waiver of outstanding loans and interest on these companies subject to finalisation of a fully tied-up proposal for revival of each of the closed unit.
Disclosing this, Mr Paswan said the revival strategy would be based on the recommendations of an Empowered Committee of Secretaries has been set up to look into financial models for closed units of the Hindustan Fertiliser Chemicals (HFCL) and Fertiliser Corporation of India (FCI), he said. . .
There are eight fertiliser units which have been closed due to various reasons including non-availability of inputs like gas and high prices of naphtha. In October last year, the empowered panel of secretaries was told to decide on financial models for reviving five units of the FCIL (Fertilizer Corporation of India Ltd) and three plants of Hindustan Fertilizer Corporation Ltd (HFCL). An estimated Rs 4000 crore in investment is envisaged for each plant which will produce around 1.2 m tonnes of farm nutrient.
Fertiliser secretary Atul Chaturvedi, speaking seperately, said that the government���s decision to revive the eight closed plants at a total investment of Rs 32,000 crore would bridge the seven million tonnes annual fertiliser shortfall in the country within five years. That is expected to peg down the current (2008-09)fertilser subsidy bill of Rs 1,02,000 crore.
Demand is expected to go up to 28 m tonnes plus in five years, up from the current output of 20 m tonne-odd. In contrast to the output, annual demand is pegged at 26 m tonnes.
ADVERTISEMENT
As part of the same plan, the Cabinet Committee on Economic Affairs (CCEA) on Thursday approved a proposal to allow HFCL's Brahmaputra Valley Fertilizer Corporation in Assam to produce farm nutrients even at a loss until its revival plan is drawn, especially since fertiliser imports are still proving a costly proposition despite a drop in input and raw material prices. The revival plan will be drawn up and funds would be sought from the Planning Commission (for this purpose).The Cabinet had last year approved a proposal to set up an SPV, promoted by state-run National Fertilizers Ltd and Rashtriya Chemicals and Fertilizers and co-operative major Kribcho, to revive HFCL's Barauni plant.
Start a SIP with as low as ₹500 with ET Money App!
Download
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
ADVERTISEMENT
