CIL, NTPC ink agreement to revive fertilizer plants

The Dollar Business Bureau

In an effort to revive two gas-based fertilizer plants, Coal India Ltd, the giant of coal mining, and NTPC, largest power producer in India, have inked a joint venture agreement.

According to the agreement inked by the two state owned firms, the works at the plants of Fertilizer Corporation of India at Jharkhand and Gorakhpur will resume soon.

Earlier, the Centre tried to rope in private partners to revive the ailing fertilizer plants. However, the apathetic response compelled the government to turn back to financially stable public sector companies.

The Centre sought cash-rich PSUs like Coal India, NTPC and Oil & Natural Gas Corporation to adopt one shut urea plant by each, to help in the revival process.

An official from NTPC revealed that the detailed plan is yet to be drawn. The capacity of proposed plants, investments and other details, for which a consultant will be employed, are likely to be decided in near future.

According to estimates, the revival of plants will cost about Rs.18,000 crore in the next 4 years.  For supply of gas, Jagdishpur-Haldia pipeline is under consideration.

GAIL, a state owned natural-gas processing and distributing company, has been asked to beef up the works for pipeline from Uttar Pradesh’s Jagdishpur to West Bengal’s Haldia to connect the closed urea plants located at Gorakhpur, UP and at Sindri, Jharkhand.

The revival of the plants will help in the production of 1.27 million tonnes of urea per annum.

The Union Cabinet had given its approval to revive plants located at Gorakhpur and Jharkhand through auctions. However, it received a tepid response with the Adani Group being the sole bidder for the Sindri plant at Jharkhand and Matix as the sole bidder for the Gorakhpur plant.

India’s urea production in 2015-16 was 24.5 million tonnes. While the required quantity of urea is 30 million tonnes, India imports the rest.