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Indian Government to Revamp Fertilizer Plants

The Indian government has come up with an alternative plan to revive three defunct fertilizer plants through public sector investments of about Rs.18,000 crore. The revival will be carried out by a consortium of three public sector firms — Coal India Ltd., NTPC and Indian Oil Corporation – and it will also include the Fertilizer Corporation of India’s (FCI) Gorakhpur unit that has been closed down since 1990.

The public sector entities have been encouraged to invest in the venture for more than a decade when the government first invited investors to revive these plants. “We didn’t get a response on the request for proposals for these units’ revival,” Law and IT minister Ravi Shankar Prasad, said. “So now it has been decided to give it to these three PSUs on a nomination basis,” he added. The Indian cabinet believes that this could be a defining moment for the economy of states where these plants are located.

India currently imports approximately 75 lakh tons of urea out of its annual consumption of 320 lakh tons. In the east of the country, there are only two small operational fertilizer units. The planned plants at Sindri, Barauni and Gorakhpur are meant to anchor customers for a new gas pipeline being built by GAIL from Jagdishpur and Haldia. The trio of plants is expected to create 1,200 direct and 4,500 indirect jobs that will also ease the pressure on rail and road infrastructure that has been damaged by long distance transportation of urea from western and central regions to the eastern part of the country.

The three plants will take advantage of gas purchased at a pooled price, which was negotiated by the Cabinet Committee on Economic Affairs. The Centre had also earlier approved the revamping of Talcher (Odisha) and Ramagundam (Telangana) units of FCIL by PSUs through ‘nomination route’.

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