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Cabinet approves revival package for closed fertilizer units

Cabinet approves revival package for closed fertilizer units
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First Published: Fri, Aug 05 2011. 12 36 AM IST
Updated: Fri, Aug 05 2011. 12 36 AM IST
New Delhi: The union cabinet has cleared a proposal to revive eight closed fertilizer units. The cabinet approval come Friday evening, a senior fertilizer ministry official confirmed on the condition of anonymity. Eight closed urea-manufacturing units are on the block for revival.
Mint had first reported an empowered committee of secretaries had given an in-principle go ahead to revive three of the eight closed plants. These three units are located at Sindri in Jharkhand, Talcher in Orissa and Ramagundum in Andhra Pradesh.
For the Sindri unit, DoF has reached an in-principle agreement with the Steel Authority of India Ltd (SAIL), which will set up an integrated steel and power plant, along with a urea manufacturing facility with an annual production capacity of 1.1 million tonnes of urea. The urea unit will be set up by the National Fertilizers Ltd (NFL).
Under the proposed in-principle agreement, SAIL will not have to give any upfront payment to DoF in lieu of the land that it would get. Instead, SAIL will give a certain percentage of equity to DoF. DoF will also get to have its nominee on the board of the proposed entity.
While the Talcher unit will be revived jointly by the Rashtriya Chemicals and Fertilizers (RCF), Gail (India) Ltd and Coal India Ltd (CIL), the Ramagumdam unit will be revived jointly by NFL and Engineers India Ltd (EIL).
While SAIL is expected to invest Rs 60,000 crore for the integrated steel plant, and Rs 4,000-5,000 crore for the urea plant for the Sindri unit, the Talcher and Ramagundam units are expected to be revived at an investment of Rs 7,500-8,000 crore and Rs 4,000-5,000 crore respectively.
The remaining five closed units will be revived by private participation, through a process of bidding.
aman.m@livemint.com
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First Published: Fri, Aug 05 2011. 12 36 AM IST
More Topics: Fertilizer Unit | Sindri | Talcher | Ramagundum | SAIL |