The burgeoning fertiliser subsidy bill and higher import costs of urea have forced the ministry of fertilisers and chemicals to evaluate a proposal of reviving three non-functioning urea units of Brauni, Talcher, and Sindri. A joint venture company floated by Rashtriya Chemicals and Fertilisers (RCF), Kibhco and National Fertilisers Ltd (NFL) christened Urvarak Videsh Limited will undertake the job of revival.
?A joint venture company has been mandated to undertake all the pre-project activities for revival of these units. The scope of activities will also include obtaining of all statutory clearances like environment clearance, water agreement, asset valuation in consultation with Project and Development India Ltd (PDIL),? secretary fertilisers, Atul Chaturvedi told FE. The crucial issue, however, will be availability of gas on long-term basis, say 15 years, he added.
The officials of DoF are expected to meet secretary petroleum ministry next week. The special purpose vehicle also plans to source gas at better price. It expects feedstock costs to fall by 50% when Reliance Industries Ltd starts selling natural gas from its offshore field in the Krishna-Godavari basin sometime this year. Once these units go on stream, about 35 to 38 lakh tonne additional urea capacity will be created.
The units owned by Fertiliser Corporation of India (FCI) and Hindustan Fertiliser Corporation (HFC) were mainly closed as they could neither cope with high cost of inputs nor line up supplies of feedstock. Mismanagement on part of the DoF and policies were also responsible for their closure.
?PDIL, which was a part of FCI had been given the responsibility to import design from Italy-based company Lurgi. It, however, provided standard design copy which consumed higher energy making the running of the plants unviable, though, the then chairman KR Chakarvarty opposed it,? a senior retired official of FCI, VN Rai said.
Rai had taken over as the chairperson of FCI in June 95. He continued till December 1998 and got a non-plan support of Rs 300 crore to run the plants successfully. However, he was given marching orders.
Chakarvarty also tried to put in place an integrated plant at Haldia in West Bengal. Waste from this plant could have been used as an input for other plants. However, this was opposed by the Planning Commission and DoF as there was no foreign exchange to import machinery.
Chakarvarty, however, imported technology from Krupp Kopper from Germany and equipment from East European countries, which led to mismatch. The idea was to revamp these plants over the period, which never happened. They were allowed to undergo natural decay and death in 1999.
FCI was re-organised in 1979. Ramagundam, Talcher and Sindri, Gorakhpur and Korba were left with parent company FCI and good technology plants went to RCF and NFL. This further compounded the problem due to lack of resources and trained manpower.
Barauni, Durgapur set up in 1973 in Bihar and West Bengal were first generation plants based on reformation of naphtha with an installed capacity of 600 tonne of ammonia and 1,000 tonne of urea per day. Ramagundam, Talcher, Sindri and Gorakhpur came into being in 1975. Evaluation of other four units of Ramagundam, Gorakhpur, Haldia and Durgapur will be taken up later.