Hindi Fertiliser May Be Splite Into Two Companies

The Union ministry of chemicals and fertilisers is planning to restructure Hindustan Fertiliser Corporation Ltd into two companies - one comprising the ailing units like Durgapur, Barauni and Haldia, and the other the viable Namrup plant. Sources in the government said that the ministry officials are considering this proposal despite the Board for Industrial and Financial Reconstruction's (BIFR) order to prepare a revival package for the Durgapur and Barauni units. "The Namrup plant is a viable unit and the government has also earmarked Rs 350 crore for its revival. However, there are little hopes for the other three. So, clubbing the three together as a separate company makes a lot of sense," sources said. Meanwhile, BIFR has already recommended the government to wind up the Haldia unit of the Hindustan Fertiliser Corporation in March this year. The board also asked the company and its operating agency ICICI Ltd to prepare a revival plan for the Durgapur and Barauni unit and submit it by June 30 this year. "No such revival plan has been prepared and submitted to the board. No follow-up action has been taken on the winding up of the Haldia unit too. The government has taken up dilly-dallying tactics," sources said. However, for the Namrup unit a Rs 350-crore modernisation-cum-expansion plan has been worked out. Under this plan the second unit of the plant would be revamped and the capacity of the third unit would be increased from 1.65 lakh tonnes to 3.30 lakh tonnes. "Considering the political scenario of the north eastern India, it would be difficult for the Union government to take any harsh decision against the Namrup unit, which is located in Assam. Closure and winding up of the three others units is comparatively easier," sources said. The Haldia and Durgapur units are located in West Bengal and the Barauni unit is located in Bihar. Though BIFR has ruled out any future for the Haldia unit, it had some hope for the other two but the cost of reviving would not been funded from the government exchequer. Four avenues were identified for the revival of these two units. First, a complete takeover by another public sector fertiliser company. Second, it can be a private party. Third, could be a workers' cooperative like Kribhco and the fourth alternative could have been by selling off the assets. "However, none of these seems viable and so restructuring is on the cards, which also means that the Durgapur and Barauni units will face same fate like that of Haldia," sources clarified. On March 31, 1999, Hindustan Fertiliser Corporation had a cumulative loss of Rs 3,400 crore. During 1999-2000, Union government gave a non-plan support of Rs 107 crore and another Rs 65 crore was earmarked for the current fiscal.