NTPC, Coal India, Indian Oil join hands to revive fertiliser units in UP

GIVING a ray of hope for ailing PSUs, as many as three 'Maharatna' public sector utilities (PSUs), NTPC, Coal India and Indian Oil, will form a special purpose vehicle (SPV) to revive three fertiliser units in UP. A proposal to this effect was...
approved by the Union Cabinet on July 13.
The Union Cabinet’s decision is also seen as a gift to the poll-bound largest state in India by population. State assembly elections are slated next year.
Out of these two closed urea units of Fertilizer Corporation India (FCIL) are located at Sindri (Jharkhand) and Gorakhpur (Uttar Pradesh) and Barauni (Bihar) unit of Hindustan Fertilizers (HFCL).
The fourth partner in the SPV would be FCIL or HFCL, through the 'nomination route'.
Another Maharatna PSU GAIL has planned to lay a gas pipeline from Jagdishpur to Haldia. These units will serve as anchor customer for this pipeline and ensure its viability, said a government statement.
The CCEA had earlier approved gas pooling for the urea sector that will enable these units to get gas at pooled price on its revival which will make the urea units globally competitive.
The government in its statement said, the revival of these fertiliser units would meet the growing demand of urea in Bihar, West Bengal and Jharkhand.
"It will also ease the pressure on railway and road infrastructure due to long distance transportation of urea from Western and Central Regions and thereby saving government subsidy on freight. It will also accelerate economic development of the region and would create opportunities for 1,200 direct and 4,500 indirect employment," said the Cabinet decision.
These three units were lying defunct since their closure during 1990-2002. In 2014, the Cabinet Committee of Economic Affairs (CCEA) had asked SAIL to revive the Sindri fertiliser unit. After pledging investment of Rs 35,000 crore, SAIL pulled out of the project in 2015.
The NDA government had approved the revival of these three units through the 'bidding route' last year. However, the bidding process could not be carried forward due to receipt of only one application each against 'Request for Qualifications' (RFQs) for revival of Gorakhpur and Sindri units of FCIL.
The annual consumption of urea in the country is approximately 320 lakh tonne, out of which 245 lakh tonne is produced indigenously and the rest is imported.