Funds to revive Barauni fertiliser unit

Interestingly, the Barauni unit, shut down on January 1, 1999, is the only unit in Paswan’s home state Bihar. Retaining its public sector character and generating employment by pumping Central funds into the unit will give the minister great political mileage ahead of general elections. In late 1970s and 1980s, the unit employed over 2,500 people. Though it had a capacity of three lakh metric tonnes, the utilisation never crossed 30-40 per cent.

The finance ministry has recommended that the department of fertilisers must try and revive the other five units of HFCL and FCI — Talcher, Ramagundam, Gorakhpur, Durgapur and Sindri — by roping in the private sector. It has pointed to the constraints arising out of the government’s commitment to the Fiscal Responsibility and Budget Management Act, in expressing its inability to spare funds for reviving all the units. The department of fertiliser had demanded that loans and interest of Rs 24,168 crore be written off besides extending additional budgetary support of Rs 7,200 crore for facilitating the revival of the six units of the two state-owned fertiliser companies.

The only advantage that Barauni offers is its good infrastructure and proximity to a refinery. The unit has sufficient land and colonies built by the PSU in the 1970s and 1980s have done the region a lot of good, said a former top executive of HFCL. “However, HFCL will need to sell the old equipment at Barauni as scrap and install completely new machinery. Further, the employment potential cannot be more than 500 (compared with 2,500-plus earlier) since today’s technology is not labour intensive,” he said. In 2002-03, the government had decided to close these units owing to their accumulated losses of a staggering Rs 14,854 crore. But subsequently, the UPA government had last year decided in-principle to examine the feasibility of reviving these subject to confirmed availability of gas.

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