Coal India on May 16 said it has entered into a pact with power PSU NTPC.
“CIL & NTPC have signed a joint venture agreement for setting up of a joint venture company at 50:50 shareholding basis for revival of Sindhri & Gorakhpur units of Fertiliser Corporation of India,” Coal India (CIL) said in a BSE filing.
Last month, cash-rich PSU firms ONGC, NTPC and Coal India were...
asked to adopt one shut urea plant each for revival which would cost about Rs 18,000 crore over the next four years.
Prime Minister’s Office (PMO) called a high-level meeting of Fertiliser Minister Ananth Kumar, Oil Minister Dharmendra Pradhan and Power & Coal Minister Piyush Goyal to chalk out the revival plan which would hinge on availability of natural gas.
Last year, CIL had entered into similar JV with GAIL and fertiliser majors RCF and FCIL to incorporate a firm for setting up and operating new ammonia urea complex in Talcher, Odisha.
These agreements are part of the government’s plan to revive loss-making and closed fertiliser plants through JVs of profit-making PSUs with a view to increasing domestic production of the farm nutrient.
The Cabinet Secretariat has asked the department of disinvestment (DoD) under the finance ministry to prepare a clear roadmap for over 42 loss-making central public sector undertakings (CPSEs) for disinvestment, revival or closure purposes. There are 65 loss-making CPSEs which have been identified over last several years. Of this list, the government has decided to shut down five CPSEs. There are 11 others which will stop getting the non-plan budgetary support from next financial year and may ultimately be closed. The Board for Reconstruction of Public Sector Enterprises (BRPSE) has recommended revival packages for 48 CPSEs, which has been approved by the government, but still far away from getting implemented.
Following instructions from the Prime Minister’s Office (PMO), the Cabinet Secretariat has asked the department of disinvestment to chalk out a strategy of these loss-making CPSEs. Some of these CPSEs also fall in the category of ‘sick’ units.
A CPSE is declared sick after it has accumulated losses in any financial year equal to 50 per cent or more of its average net worth during four preceding years. There are 65 units in the list of sick public sector units as of March 31, 2014. The CPSEs which are part of this list include MTNL, Air India, Bengal Chemicals, Konkan Railway Corporation, Hindustan Shipyard, HMT, Bharat Coking Coal, ITI, Bharat Wagon and Engineering, Tungabhadra Steel, Scooters India, Heavy Engineering Corporation, National Jute Manufacturers, Burn Standard, Fertilizer Corporation of India, British India Corp among several others. The government has been contemplating a slew of measures for revival of sick or loss-making CPSEs. Setting up a separate entity funded by financially strong CPSEs to look at management and revival of sick companies is one such measure. Cash-rich profitable PSUs can also be roped in to support and revive the loss-making/sick CPSEs as part of their mandatory corporate social responsibility (CSR) practice. Some of these measures are under active consideration of the government.