Union Cabinet approves revival of defunct Fertilizer Units in Gorakhpur, Sindri and Barauni

The Union Cabinet on 13 July 2016 approved the revival of defunct Fertilizer Units in Gorakhpur, Sindri and Barauni. The units to be revived includes - Sindri (Jharkhand) and Gorakhpur (Uttar Pradesh) of Fertilizer Corporation India Limited (FCIL)  Barauni (Bihar) unit of Hindustan Fertilizers Corporation Limited (HFCL)

The setting up of new units at Sindri, Gorakhpur and Barauni will help in meeting the growing demand of urea

of 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 in subsidy on freight.

• It will also accelerate the economic development of the region. Apart from growth of regional economy, this unit will create opportunities for 1200 direct and 4500 indirect employments.

Process of their revival

These three fertilizer units would be revived by means of Special Purpose Vehicle (SPV) of Public Sector Units (PSUs) namely, National Thermal Power Corporation (NTPC), Coal India Limited (CIL), Indian Oil Corporation Limited (IOCL) and FCIL/HFCL, through ‘nomination route’.

Besides, the GAIL (India) Limited 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. Commissioning Jagdishpur-Haldia gas pipeline (JHPL) is important for development of critical infrastructure in Eastern India and will have multiplier effect on economic growth of the region.

Background

These units were lying defunct since their closure during 1990-2002. Therefore, the units and other associated facilities were lying unutilized. There is no functional urea unit in the Eastern part of the country except two small units at Namrup (Assam).

Earlier in 2015, Government had approved revival of these three units through ‘bidding route’. 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 approx. 320 LMT, out of which 245 LMT is produced indigenously and rest is imported. To enhance the production of urea indigenously, government earlier also approved the revival of Talcher (Odisha) & Ramagundam (Telangana) units of FCIL by PSUs through ‘nomination route’.