Govt finalises white paper on sick fertiliser PSUs

NEW DELHI, OCT 2: The fertiliser department has finalised the white paper for the revival of sick fertiliser public sector units (PSUs) and is expected to place it before the Cabinet soon.

According to the former chemicals and fertilisers minister Suresh Prabhu, the idea behind the exercise was to seek a consensus on the best way to deal with the sick PSUs and the amount of money to spend on them.

Ministry sources said that the revival costs for individual units would run into thousands of crore. "By going through the status papers, the Cabinet members would get a complete idea about the future prospects of the units and what it would cost the exchequer to revive them. They could then decide whether a revival programme would be feasible," sources said.

The methods suggested for working out a revival programme include modernisation of plants, induction of state-of-the-art technology and reduction of manpower.

The FCI, which was declared sick in November 1992, suffered losses amounting to Rs 834.26 crore in the last fiscal. With the closure of its coal-based urea units in Ramagundam and Talcher in April last year, the only operational unit of FCI is at Sindri, Bihar. FCI's Gorakhpur unit has been lying closed since June 1990.

Also declared sick in November 1992 was HFC that suffered losses of Rs 574.05 crore in 1999-2000. In the current fiscal, the PSU is expected to incur a loss of Rs 647.65 crore. Phosphatic fertiliser producing public sector unit, PPCL was referred to the Board for Industrial and Financial Reconstruction (BIFR) in November 1999. This was subsequent to the closure of its units in Amjhore and Saladipura in April 1999 due to non-availability of raw material and shortage of funds as incentives on pyrites based production of SSP were discontinued that year. The company suffered a net loss of Rs 87.49 crore in 1999-2000.

Out of the four, engineering and consultancy company PDIL is in the best shape. Declared sick in December 1992, the company incurred losses estimated at Rs 8.03 crore in 1998-99 and is expected to earn a profit of Rs 1.04 crore in 2000-01 as per budget estimates.

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