Govt approves revival of 3 defunct urea plants

The Dollar Business Bureau

In a bid to meet the demands of eastern states and help India attain self-sufficiency, the government agreed to revive three closed urea plants at Sindri, Gorakhpur and Barauni at a cost of Rs. 18,000 crore.

The Union Cabinet, which was chaired by Prime Minister Narendra Modi, approved the renewal of the three fertilizer plants, each bearing potential of 1.27 million tonnes per annum production capacity.

The revival will be done through nomination of Special Purpose Vehicle of PSUs such as Coal India Ltd, NTPC, HFCL, FCIL and Indian Oil Corp Ltd.

Ravi Shankar Prasad, Law and IT minister, stated that the decision to revive the plants is the game-changer for eastern India’s economy.

In 2015, the government had approved the revival of the same units through bidding. However, the bidding route could not be taken ahead as only one application was received for each against Request for Qualification for revival of FCIL’s Sindri and Gorakhpur plants.

In April 2016, the PMO held a meeting to deliberate upon the revival plans of these units.

Cash rich public sector companies like Coal India, NTPC and ONGC were asked to adopt one closed plant each for the revival.

The revival of these plants will lessen the pressure on rail-road infrastructure due to distance, which would ultimately lead to saving of subsidy on freight.

The revival will boost the economic development of eastern India and give way to new opportunities by employing around 4,500 people indirectly and 1,200 directly.

GAIL has plans to lay a gas pipeline to Haldia from Jagdishpur. The revival of the three defunct plants will serve as an anchor customer of the pipeline, ensuring its sustainability, added Prasad.