Cabinet approves Rs9,000-cr revival plan for Hindustan Fertilizer’s Barauni unit

The union cabinet today gave its approval for financial restructuring of Hindustan Fertilizer Corporation Limited (HFCL), which involves, amongst other things, waiver of government loan of Rs1,916.14 crore (as of 31 March 2015) and the outstanding interest on the loan (which was Rs7,163.35 crore as of 31 March 2015).

The cabinet also approved transfer of 56 acres of Ash Dyke land of Barauni unit to Bihar State Power Generation Company Limited (BSPGCL) to settle dues of HFCL for faster revival of Barauni unit.

This will facilitate de-registration of HFCL from BIFR by making its net worth positive. It will clear the way for faster revival of Barauni unit of HFCL. This unit is lying defunct and was not in operation since January 1999. Therefore, the unit and other associated facilities were lying unutilised.

It is important to mention here that there is no functional urea unit in the eastern part of the country except two small units at Namrup, in Assam.

The annual consumption of urea in the country is approximately 32 million tonnes, of which indigenous production accounts for 24.5 million tonnes while the remaining is imported. The setting up of a new unit at Barauni will meet the growing demand of urea of Bihar, West Bengal and Jharkhand. It will also ease the pressure on railway and road infrastructure due to long distance transportation of urea from western and central regions and thereby saving in govt. subsidy on freight. This unit will create opportunities for 400 direct and 1,200 indirect jobs.

Barauni unit will also serve as anchor unit to Jagdishpur-Haldia gas pipeline being laid by Gas Authority of India Limited (GAIL), which is critical for development and growth of economy and infrastructure in eastern India.