Hope for closed PSUs: Coal India forms JVs for Talcher plant revival

STATE-run Coal India Ltd (CIL) on December 23 said it is embarking upon two joint-ventures to revive the Talcher coalfield in Odisha.

The first joint-venture will be formed between CIL and GAIL, both state-run companies for coal...

gasification project and the second joint venture will be with Rashtriya Chemicals and Fertilizers Ltd, another state-run company.

The coal gasification project follows the meeting between petroleum and natural gas minister Dharmendra Pradhan, coal and power minister Piyush Goyal and minister for chemicals and fertilisers Ananth Kumar in Delhi last week.

Apart from the revival plan of the Talcher coalfield, the revival of the closed unit of the Fertilizer Corporation of India Ltd of Gorakhpur and the Hindustan Fertilisers Corporation Ltd unit of Barauni also came up for detailed discussion.

The petroleum minister said his ministry has decided to give gas for the Gorakhpur fertilizer unit for its immediate revival. He also informed the meeting that preparations will also be made for setting up the gas pipeline for the revival of Barauni plant.

According to Geological Survey of India, the Talcher coalfield has reserves of 38.65 billion tonnes, the highest in India. It covers an area of 500 sq km, however, the coal is of lower grade containing only about 35 percent of fixed carbon, 40 percent volatile matter and 25 percent ash content.

Coal was discovered in the Talcher coalfields in 1837.

Earlier, indiapublicsector.com reported that, the government proposed to from two joint ventures for the revival of closed fertilizers plants at Talcher in Odisha and at Ramagundam in Telangana.

He stated this after a joint review meeting held on September 26 over this issue with MoS (independent charge) petroleum Dharmendra Pradhan. Secretary in the ministry of coal and CMD of Coal India Limited (CIL), secretary, department of fertilizers and other officials were also present in the meeting. The minister said an investment of about...

Rs 9,000 crore is proposed to be made towards reviving these projects.

The Talcher Fertilizer Unit, which has been shut down in 2002, will start production from 2018, the minister said.

Talcher will be the first plant in the country using coal gasification technology.

“The plant will have a capacity of 1.3 million tonnes per annum of urea and 3.3 lakh litres of ammonia nitrate per annum and around Rs 9,000 crore will be invested in this project with an aim of generating employment,” said Kumar.

The first JV will be for setting up of an upstream coal gasification unit and the second will involve establishment of a urea-cum-ammonia nitrate complex.

The plant will have a capacity of 1.3 million tonnes per annum of urea and 3.3 lakh litres of ammonia nitrate.

Earlier, the ministry of chemicals and fertilizers has decided to set up new fertilizer plants rather than restarting closed fertilizer units, in a sharp departure from its earlier strategy. The revival and restarting of fertilizer units has been a long drawn strategy for the government of India but action at the ground level has been a laggard.

In 2011, the Cabinet Committee on Economic Affairs (CCEA), approved the Draft Rehabilitation Scheme (DRS) for revival of all the Units of FCIL and HFCL.

As per the scheme, revival of Talcher Unit would have been done by the consortium of Rashtriya Chemical & fertilizers Limited (RCF), Coal India Limited (CIL) and Gas Authority of India Limited (GAIL).

As many as ten fertilizer plants out of 23 operated by state-run companies are closed, while 7 others are suffering losses.

There are seven public sector undertakings (PSUs) in the fertilizer sector having total of 23 manufacturing plants, and out of which only six plants are in profit.
The government has already constituted a committee headed by NTPC Chairman Arup Roy Choudhury to study the proposal of forming joint ventures among cash-rich PSUs to revive the sick PSUs.
The committee will examine the possibility of formation of a joint venture company funded by seed equity from Maharatna and other cash-rich central public sector enterprises (CPSEs) to administer and manage sick state-run enterprises that can be revived.
"All the Maharatnas and Navratnas combined have a (cash) surplus of around Rs 2 lakh crore which is lying idle in banks. We have given them a proposal to form a joint venture company which has equal equity share of all these cash rich companies. There are 70 sick PSUs and 43 out of these can be revived, the heavy industries and public enterprises Minister Anant Geete said.
"The new company formed will review and decide which sick PSUs can be revived. We want to give it entire responsibility to take over (revival of sick PSUs). There will be complete transparency in the process and the surplus money lying idle will certainly be used to revive sick PSUs," Geete added.

Besides examining the feasibility of setting up of a separate company to nurse ailing PSUs back to health, the terms of reference of the Committee include identifying sources from which funds may be raised for the proposed entity as equity capital; and to recommend organisational structure of the proposed entity and its interface with the Ministries.