NTPC, Coal India, Indian Oil to revive 3 fertiliser units in UP

The three 'Maharatna' public sector utilities (PSUs), NTPC, Coal India and Indian Oil, would form a special purpose vehicle (SPV) to revive three fertiliser units in UP, the Union Cabinet approved today.

These include two closed urea units of Fertilizer Corporation India (FCIL) 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'.

GAIL (India) 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, which 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 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.

NTPC Limited

Coal India Ltd

Indian Oil Corporation