Wednesday, November 26, 2014

Fertilzers Minister's assurance keeps hope alive for PSU revival

Fertilizers Minister Ananth Kumar 
REKINDLING hope for revival of sick PSUs, the three state-owned naphtha-based urea production units in South India have been assured of a ‘positive’ decision in a fortnight by Union Minister for Chemicals and Fertilizers Ananth Kumar to...
continue the production with the existing naphtha-fed system till the Centre Government makes available natural gas.
The assurance was given to a Joint Action Committee of employees of state-owned Madras Fertilisers Ltd. (MFL), Chennai and two other private firms which met the minister in Bengaluru last weekend.
The Minister was learnt to be positive when the committee explained the problems being faced by the units, employees as well as the impact on farmers due to non-production of urea.
It also informed Kumar that there was hardly any difference between the prices of naphtha and re-liquified natural gas (RLNG) and the Centre’s directive to switch over to RLNG-fed production held little water.
The minister said the decision not to pay subsidy for naphtha-fed urea production from September 30 was taken by the previous UPA government and not by the NDA government.
He told the committee that the Centre was in favour of farmers and, in fact, intended to start six more fertilizer production units soon.
The minister said the managements of the three urea production units had already agreed for RLNG price subsidy till gas connectivity was established to the units. 
It meant a reduction of about Rs.2,000 a tonne in subsidy to production units, which might impact the profit margins of the companies.
However, the employees’ morale and farmers’ interests would remain intact as the units would continue with the production, he said.
There were 61 sick CPSEs as on March 31, 2013, with over 1.53 lakh employees.
Currently, sick PSUs are referred to the Board for Reconstruction of Public Sector Enterprises for revival, restructuring, sale or closure. According to a Government resolution, a company will be considered sick if it has accumulated losses in any financial year equal to 50 per cent or more of its average net worth during the four preceding years.

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