Fact Engineering & Design Organisation (Fedo), the consultancy organisation under the department of fertilisers, has proposed a fresh investment of Rs 512.77 crore to revive Hindustan Fertiliser Corporation (HFC). It has also sought a 20 per cent reduction in the work-force of the corporation.
An earlier revival package, prepared by Industrial Credit & Investment Corporation of India, had estimated the required investment at Rs 464.73 crore.
The Fedo proposal has taken into account the suggestions made by ICICI. It includes a foreign exchange component of Rs 151.75 crore.
Fedo has estimated the cost of rehabilitating the Barauni unit at Rs 141.4 crore, Durgapur Rs 112.96 crore and Namrup Rs 258.41 crore. Under the ICICI proposal, the revival of Namrup required less than Rs 100 crore.
All HFC units were referred to the Board for Industrial & Financial Reconstruction in 1992. The board appointed ICICI as the operating agency. ICICI was asked to prepare a unit-wise revival package. It submitted a package involving fresh infusion of funds worth Rs 464.93 crore. However, the agency also raised doubts on the viability of reviving the units. Hence, Fedo was appointed to prepare a fresh proposal.
The Fedo report has pointed out that the total production of urea in all HFC units in 1994-95 was only 17 per of the rated production level. Of this, 69 per cent came from the Namrup unit, 30 per cent from the Barauni unit and the rest from Durgapur. The report states that the chief reasons for the shortfall in production were non-availability of gas, hardware breakdown and shortage of utility. Oil companies, including Oil & Natural Gas Corporation and Oil India Ltd, have refused to supply gas due to the mounting dues of HFC.
It was found that the energy consumed for each tonne of ammonia produced at the Barauni and Durgapur units was nearly double the consumption by the units of Indian Farmers Fertilisers Corporation and Rashtriya Chemicals & Fertilisers.
In the case of Barauni, the report states that inherent design deficiencies in the steam system and frequent equipment failure, along with unstable power and gas supply, affected its performance. The average capacity utilisation for the ammonia plant was only 30.67 per cent and for urea 29.09 per cent. It suggested that the plant load factor should be 77 per cent for the ammonia plant and 87 per cent for the urea plant, while the annual production of ammonia should be 1.3 lakh tonnes after the revamp.
The report also states that the Barauni unit had not carried out any safety audit since its inception. Fedo pointed out that 20 per cent of the manpower at the unit was surplus, while, at the same time, there was a drain of qualified and skilled manpower.
In the case of the Durgapur plant, the report states that due to design deficiencies and frequent equipment failure, the average capacity utilisation had been only 23.95 per cent for ammonia and 21.48 per cent for urea. According to Fedo, the existing manpower was higher by at least 24.8 per cent.
The average capacity utilisation was 23.16 per cent for the ammonia plant and 21.68 per cent for the urea plant.
The report suggested that the achievable plant load factor should be 79 per cent for the ammonia plant and 88 per cent for the urea plant, while the annual achievable production of ammonia should be 1.2 lakh tonnes after the revamp.
In the case of the Namrup plant, the first unit was found to have a good record, while the production performance of units two and three were found extremely unsatisfactory. The manpower was also in excess by 12 per cent, the report said. After the revamp, the report has suggested, the plant load factor of Namrup-I should be 66 per cent for ammonia, 80 per cent each for ammonia and urea units of Namrup-II, and 93 per cent for the ammonia unit and 90 per cent for the urea unit of Namrup-III. It has suggested an annual achievable production of 2.2 lakh tonnes of urea for Namrup II and 2.89 lakh tonnes of urea for Namrup III.
Fedo has also pointed out that the revival scheme will be meaningless unless the availability of feed-stock gas for the plants in required quality and quantity is ensured.
In case the gas supply is doubtful, it has suggested that Namrup-III should be revamped for multi-feed (naphtha and gas) use.
