GOVERNMENT OF INDIA MINISTRY OF CHEMICALS & FERTILIZERS DEPARTMENT OF FERTILIZERS

Transcription

1 Designed & Printed at Brijbasi Art Press Ltd. pc-10/m of C & Fertilizers cover /fertilizer_cover/final Fertilizer Annual report cover GOVERNMENT OF INDIA MINISTRY OF CHEMICALS & FERTILIZERS DEPARTMENT OF FERTILIZERS

2 ANNUAL REPORT Government of India MINISTRY OF CHEMICALS & FERTILIZERS DEPARTMENT OF FERTILIZERS

3

4 Contents 1. Introduction Organisational Set up and Functions 6 3. Development & Growth of Fertilizer Industry Availability of Major Fertilizers During Plan Performance Measures of Support for Fertilizers Public Sector Undertakings and Cooperative Societies Fertilizer Education Projects Information Technology (IT) Vigilance Activities Right to Information Act, Progressive Use of Official Language Hindi Welfare of SCs, STs, OBCs and Physically Handicapped Persons Activities in the North-East Region Women Empowerment ANNEXURES I to XII 71-85

5 Hon ble Union Minister for Chemicals & Fertilizers and Steel Shri Ram Vilas Paswan addressing the First Conference of State Agriculture Ministers on Fertilizer Sector. 2 Department of Fertilizers, Ministry of Chemicals & Fertilizers

6 Chapter Agriculture, which accounts for one fifth of GDP, provides sustenance to two-thirds of our population. Besides, it provides crucial backward and forward linkages to the rest of the economy. Successive five-year plans have laid stress on self-sufficiency and self-reliance in food grains production and concerted efforts in this direction have resulted in substantial increase in agriculture production and productivity. This is clear from the fact that from a very modest level of 52 million MT in , food grains production rose to above million MT in In India s success in agriculture sector, not only in terms of meeting total requirement of food grains but also generating exportable surpluses, the significant role played by chemical fertilizers is well recognized and established Keeping in view the vital role played by chemical fertilizers in the success of India s green revolution and consequent self-reliance in foodgrain production, the Government of India has been consistently pursuing policies conducive to increased availability and consumption of fertilizers in the country. As a result, the annual consumption of fertilizers, in nutrient terms (N, P & K ), has increased from 0.7 LMT in to LMT in , while per hectare consumption, which was less than 1 Kg in has risen to the level of Kg (estimated ) in As of now, the country has achieved near selfsufficiency in production capacity of urea with the result that India could substantially manage its requirement of nitrogenous fertilizers through the indigenous industry. Similarly, adequate indigenous capacity has been developed in respect of phosphatic (P) fertilizers to meet domestic requirements. However the raw materials and intermediates for the same are largely imported. As for potash (K) since there are no viable sources/reserves in the country, its entire requirement is met through imports. Growth Of Fertilizer Industry The industry made a very humble beginning in 1906, when the first manufacturing unit of Single Super Phosphate (SSP) was set up in Ranipet near Chennai with an annual capacity of 6000 MT. The Fertilizer & Chemicals Travancore of India Ltd. (FACT) at Cochin in Kerala and the Fertilizers Corporation of India (FCI) in Sindri in Bihar ( now Jharkhand) were the first large sizedfertilizer plants set up in the forties and fifties with a view to establish an industrial base to achieve self-sufficiency in food-grains. Subsequently, green revolution in the late sixties gave an impetus to the growth of fertilizer industry in India and the seventies and eighties then witnessed a significant addition to the fertilizer production capacity The installed capacity as on has reached a level of LMT of nitrogen (inclusive of an installed capacity of LMT of urea after reassessment of capacity of which the non functional capacity is estimated of LMT) and LMT of phosphatic nutrient, making India the 3 rd largest fertilizer producer in the world. The rapid build-up of fertilizer production capacity in the country has been achieved as a result of a favourable policy environment facilitating large investments in the public, co-operative and private sectors. Presently, there are 56 large size fertilizer plants in the country manufacturing a wide range of 3 A n n u a l R e p o r t

7 nitrogenous, phosphatic and complex fertilizers. Out of these, 29 units produce urea, 20 units produce DAP and complex fertilizers, 7 units produce low analysis straight nitrogenous fertilizers. There are 9 plants that manufacture ammonium sulphate as by-product. Besides, there are about 72 medium and small-scale units in operation producing SSP. The sector-wise installed capacity is given in the table below: - Talcher (Orissa) and Ramagundam (Andhra Pradesh). These coal based plants have, however, been closed by Government w.e.f due to technical and financial nonviability. However, with natural gas becoming available from offshore Bombay High and South Basin, a number of gas based ammonia-urea plants have been set up since As the usage of gas increased and its available supply Sector-wise, Nutrient-wise Installed Fertilizer Manufacturing Capacity As On Sl. No. Sector Capacity (LMT) Percentage Share N P N P 1 Public Sector Cooperative Sector Private Sector Total: Self-sufficiency In Fertilizer Sector Out of three main nutrients namely nitrogen, phosphate and potash (N, P & K), required for various crops, indigenous raw materials are available mainly for nitrogenous fertilizers. The Government s policy has hence aimed at achieving the maximum possible degree of selfsufficiency in the production of nitrogenous fertilizers based on utilisation of indigenous feedstock. Prior to 1980, nitrogenous fertilizer plants were mainly based on naphtha as feedstock. A number of fuel oil/lshs based ammonia-urea plants were also set up during 1978 to In 1980, two coal-based plants were set up for the first time in the country at dwindled, a number of expansion projects came up in the last few years with duel feed facility using both naphtha and gas. Feasibility of making available Liquefied Natural Gas (LNG) to meet the demand of existing fertilizer plants and/or for their expansion projects, along with the possibility for utilising newly discovered gas reserves, is also being explored by various fertilizer companies in India In case of phosphates, the paucity of domestic raw material has been a constraint in the attainment of self-sufficiency in the country. Indigenous rock phosphate supplies meet only 5-10% of the total requirement of P2O5. A policy has therefore been adopted which involves a mix 4 Department of Fertilizers, Ministry of Chemicals & Fertilizers

8 Hon ble Union Minister for Chemicals & Fertilizers and Steel Shri Ram Vilas Paswan visits Buddha Vihar. of three options, viz, domestic production based on indigenous/imported rock phosphate and imported sulphur; imported intermediates, viz. ammonia and phosphoric acid; and third, import of finished fertilizers. During roughly 88% of the requirement of phosphatic fertilizers was met through the first two options In the absence of commercially exploitable potash sources in the country, the entire demand of potassic fertilizers for direct application as well as for production of complex fertilizers is met through imports Given the volatility in international market for fertilizers in general and urea in particular, marginal provision through imports could be used to the country s strategic advantage. This is also desirable as the international market, especially in case of urea, is very sensitive to demand supply scenario. Under the new pricing regime for urea units applicable from , for securing additional indigenous supply of urea, economically efficient units are being permitted to produce beyond their re-assessed capacity to substitute/minimise imports. 5 A n n u a l R e p o r t

9 Chapter The main activities of Department of Fertilizers (DOF) include planning, promotion and development of the Fertilizer Industry; planning and monitoring of production; import and distribution of fertilizers; and management of financial assistance by way of subsidy/concession for indigenous and imported fertilizers The Department is broadly divided into 4 Divisions dealing with (i) Fertilizers Projects and Planning (ii) Fertilizer Imports, Movement and Distribution (iii) Administration and Vigilance and (iv) Finance and Accounts. The work of these divisions is handled by two Joint Secretaries, one Economic Adviser & one Additional / Joint Secretary-cum- Financial Adviser. Joint Secretary (Fertilizers) is entrusted with the work pertaining to planning of fertilizer production and development of fertilizer industry, which includes pricing policy for urea units and issues relating to availability of raw materials such as natural gas, fuel oil and naphtha. In respect of PSUs the Joint Secretary (Fertilizer) is concerned with joint venture projects, external assistance for new fertilizer projects; revival/rehabilitation of sick fertilizer units; and company affairs The Joint Secretary in-charge of Administration and Movement looks after the work relating to Establishment & Administration matters, monitoring and assessment of production, import, movement and distribution of fertilizers, administration and management of concession scheme for decontrolled phosphatic and potassic fertilizers. The Joint Secretary (A&M) also attends to grievances of the public and the employees of the Department. Besides, he functions as the Chief Vigilance Officer (CVO) of the Department The Economic Adviser (EA), an officer of Joint Secretary level, advises the Department on various economic issues like creation of additional capacity, pricing and costing of fertilizers. EA also supervises the functions pertaining to bio- fertilizers, micronutrients, organic-manure, besides organizing quarterly review meetings (QRMs) The list containing the names of Minister-in- charge and the officers up to the level of Deputy Secretary who have worked in the Department during is given in Annexure-II. Fertilizer Industry Coordination Committee (FICC) The Office of Fertilizer Industry Coordination Committee (FICC) is an attached office headed by Executive Director of the rank of Joint Secretary to the Government of India. The FICC comprises of the Secretaries to the GOI in the Department of Fertilizers, Industrial Policy and Promotion, Agriculture and Cooperation, Expenditure, Ministry of Petroleum & Natural Gas, Chairman of Tariff Commission and two representatives of the urea industry. FICC, which was initially constituted w.e.f to administer and operate the erstwhile retention Price Cum Subsidy Scheme (RPS), has been replaced vide Resolution dated to administer and operate the New Pricing Scheme (NPS), which has come into existence w.e.f The Department has under its administrative control ten public sector undertakings (PSUs), one multi-state co-operative society and one Joint Sector Company. Annexure III. The list is given at Department of Fertilizers, Ministry of Chemicals & Fertilizers

10 Chapter - 3 Capacity Build-Up At present, there are 56 large size fertilizer units in the country manufacturing a wide range of nitrogenous, phosphatic and complex fertilizers. Of these, 29 units produce urea, 20 units produce DAP and complex fertilizers, 7 units produce low analysis straight nitrogenous fertilizers. There are 9 units that manufacture ammonium sulphate as by-product. Besides, there are about 72 small and medium scale units in operation producing single super phosphate (SSP). The total installed capacity of fertilizer production which was LMT of nitrogen and LMT of phosphate as on , has marginally increased to LMT of nitrogen and LMT of phosphate as on Production Capacity and Capacity Utilisation The production of fertilizers during was LMT of nitrogen and LMT of phosphate. The production target for has been fixed at LMT of nitrogen and LMT of phosphate, representing a growth rate of 0.83% in nitrogen and 14.19% in phosphate, as compared to the actual production in Production target for nitrogenous fertilizer is less than the installed capacity because of constraints in supply and quality of natural gas for Rashtriya Chemicals & Fertilizers (RCF), Trombay and Bramaputra Valley Fertilizer Corporation Ltd. (BVFCL), Namrup. Similarly, the production target for phospahtic fertilizer is less than installed capacity due to constraints in availability of raw materials/ intermediates which are substantially imported The production performance of both nitrogenous and phosphatic fertilizers during was less than the target. For nitrogenous fertilizers this was mainly due to constraints in supply and quality of natural gas, equipment breakdowns, and RCF Trombay-V & DIL Kanpur remained under unscheduled shutdown. In case of phosphate, production in DAP plants was low on account of shortage of imported phosphoric acid and ammonia. Production of complexes was higher than the corresponding period of last year. However, taken together, the production of N and P during the year was higher than that in the corresponding period of last year. 7 A n n u a l R e p o r t

11 UREA UNITS SET UP BETWEEN: WITH REASSESSED CAPACITY Year of Unit Feedstock and Capacity Comm. Sector Installed Capacity (lakh/mt) 1967 GSFC-Baroda Gas-Private SFC-Kota Naphtha-Private DIL-Kanpur Naphtha-Private MFL-Madras Naphtha-Public 1973 ZIL -Goa Naphtha-Private SPIC-Tuticorin Naphtha-Private MCFL-Mangalore Naphtha-Private NFL-Nangal FO/LSHS-Public IFFCO-Kalol Gas-Coop NFL-Bhatinda FO/LSHS-Public NFL-Panipat FO/LSHS-Public IFFCO-Phulpur Naphtha-Coop RCF-Trombay-V Gas-Public GNFC-Bharuch FO/LSHS-Private RCF-Thal Gas-Public KRIBHCO-Hazira Gas-Coop BVFCL-Namrup-III Gas-Public (Formerly HFC) 1988 NFL-Vijaipur Gas-Public IFFCO-Aonla Gas-Coop Indogulf-Jagdishpur Gas-Private NFCL-Kakinada Gas-Private SFC-Kota Gas-Private TCL-Babrala Gas-Private KRIBHCO SHYAM-Shahjahanpur Gas-Private (Formerly OCFL) 1996 IFFCO-Aonla expansion Gas-Cooperative NFL-Vijaipur expansion Gas-Public IFFCO-Phulpur expansion Naphtha-Cooperative NFCL-Kakinada expansion Naphtha-Private CFCL-Gadepan expansion Naphtha-Private BVFCL:Namrup-II Gas-Public 8 After revamp Department of Fertilizers, Ministry of Chemicals & Fertilizers

12 The following 9 urea plants of the companies are presently closed/under shutdown due to various reasons, inter-alia, on account of technological obsolescence, feedstock limitation, non-viability of unit/company and heavy financial losses. Sl. Name of the Date of closures Annual installed No. Company/Unit Capacity (In LMT) 1. FCI: Gorakhpur FCI: Ramagundam FCI: Talcher FCI: Sindri HFC: Durgapur HFC: Barauni RCF: Trombay-I NLC: Neyveli FACT: Cochin-I Total Note: Two urea units have suspended production for the last three years namely RCF-Trombay-V (3.3 LMT) due to shortage of natural gas and DIL-Kanpur (7.22 LMT) due to financial constraints The domestic fertilizer industry has by and large attained the levels of capacity utilisation comparable with others in the world. The capacity utilisation during was 94.1% for nitrogen and 74.6% for phosphate. The estimated capacity utilisation during is 93.6% of nitrogen and 82.0% of phosphate. Within this gross capacity utilization, the capacity utilisation in terms of the urea plants was 102.0% in and is estiamted to be 99.0% in As for phosphate fertilizers, apart from the constraints mentioned earlier, the actual production capacity utilisation has also been influenced by the demand trends The capacity utilisation of the fertilizer industry, particularly in respect of urea, is expected to improve further through revamping/ modernisation of the existing plants The unit-wise details of installed capacity, production and capacity utilisation during and (estimated) are given in Annexure-IV. Strategy for Growth The following strategy has been adopted to increase fertilizer production: Expansion and capacity addition/efficiency enhancement through retrofitting/revamping 9 A n n u a l R e p o r t

13 10 of existing fertilizer plants. Setting up joint venture projects in countries having abundant and cheaper raw material resources. Working out the possibility of using alternative sources like liquefied natural gas, coal gasification, etc., to overcome the constraints in the domestic availability of cheap and clean feedstock, particularly for the production of urea. Looking at possibilities of revival of some of the closed units by setting up brownfield units subject to available of gas. Projects Under Implementation Brahmaputra Valley Fertilizer Corporation Ltd. is implementing a major revamp of its Namrup unit in Assam in the North Eastern Region of the country, at an approved completion cost of Rs crore to increase urea production to 5.55 lakh tonnes per annum. Namrup-III unit and one stream of Namrup-1 were commissioned in March & May 2002, respectively. Namrup-II unit of BVFCL has been commissioned following the completion of revamp w.e.f November Feedstock Policy At present, natural gas based plants account for more than 66% of urea capacity, naphtha is used for less than 30% urea production and the balance capacity is based on fuel oil and LSHS as feedstock. The two coal based plants at Ramagundam and Talcher were closed down due to technological obsolescence and nonviability Natural gas has been the preferred feedstock for the manufacture of urea over other feedstocks viz. naphtha and FO/LSHS, firstly, because it is clean and efficient source of energy and secondly, it is considerably cheaper and more cost effective in terms of manufacturing cost of urea which also has a direct impact on the quantum of subsidy on urea Accordingly, the pricing policy, announced in January 2004, provides that new urea projects, expansion of existing urea units and capacity increase through de-bottlenecking/revamp/ modernization will be also allowed/recognized if the production comes from using natural gas/ LNG as feedstock. For the same reasons, a policy for conversion of the existing naphtha/fo/ LSHS based urea units to natural gas/lng as feedstock has also been formulated in January 2004, which encourages early conversion to natural gas/lng. Pursuant to formulation of policy for conversion of non-gas urea units to gas, three naphtha based plants namely, Chambal Fertilizers & Chemicals Limited (CFCL), Gadepan-II and IFFCO-Phulpur-I & II have already converted to NG/LNG and a fourth unit namely Shriram Fertilizers & Chemicals Limited (SFC-Kota) will convert by the end of current financial year In this context, the aspect of pricing of feedstock also becomes important considering that the cost of feedstock constitutes about 60 to 75% of the total cost of production of urea - in respect of gas based units, cost of feedstock accounts for 60% of cost of production, whereas for naphtha based and FO/LSHS based units, it accounts for about 75% of the cost of production. Steps Taken for Ensuring Adequate Availability of Gas and Pipeline Connectivity for Fertilizer Sector Although natural gas is the preferred feedstock Department of Fertilizers, Ministry of Chemicals & Fertilizers

14 for production of urea, but due to the dwindling supplies of natural gas, gas based units have been facing shortage of natural gas. Average actual supply of gas to fertilizer units during was MMSCMD against the requirement of MMSCMD. With the commissioning of LNG terminal of Petronet LNG Limited (PLL) and commencement of supplies of R-LNG to consumers w.e.f , the supply position of gas to urea units along the HBJ pipeline has improved as the shortfall was only 3.20 MMSCMD. However, shortfall of gas for urea units in Uran Region and KG Basin is very acute Furthermore the requirement of gas for the fertilizer sector will increase in next 3-4 years on account of new and expansion projects of urea, additional production of urea beyond 100% by existing urea units, conversion of non-gas based units to NG/LNG and revival of closed urea units of HFC and FCI In the context of preparing a credible plan of action for conversion of non-gas based units to NG/LNG and ensuring adequate availability of gas for the existing units as well as to take care of future requirement of Gas, a series of meetings have been held between the Ministry of Petroleum & Natural gas and the Department of Fertilizers and prospective suppliers of NG/LNG. As per the position emerging from the deliberations held with the Ministry of Petroleum & Natural Gas, it has come out that the domestic gas availability scenario will remarkably improve from and there should be no problem of general availability of NG/LNG from onwards On the issue of pipeline connectivity, it is stated that broadly 37 urea units (28 functional units, 2 units under shutdown and 7 closed units of HFC and FCI) can be placed in 5 categories, namely (a) 13 gas based units on the HBJ pipeline (b) 9 gas based units on other pipelines (c) 5 naphtha based units (d) 3 fuel oil/low sulphur heavy stock (FO/LSHS) based units (excluding GNVFC-Bharuch, which currently uses FO/ LSHS as feedstock for urea but has gas connectivity) and (e) 7 closed units of HFC and FCI While connectivity already exists for the units in the first two categories, it is likely to be available in the next 3 to 4 years, in respect of other units too, except in respect of units at Goa, Mangalore and Tuticorin. These three units will have to explore alternative feedstock like Coal Bed Methane (CBM) and Coal Gas. Adequate gas supply would be available to all the functional units by and for 7 closed units by Joint Ventures Abroad Due to constraints in the availability of gas, which is the preferred feedstock for production of nitrogenous fertilizers and the near total dependence of the country on imported raw materials for production of phosphatic fertilizers, the Government has been encouraging Indian companies to establish joint venture production facilities, with buy back arrangement, in other countries, which have rich reserves of natural gas and rock phosphate The joint ventures already established have given the Indian sponsors an assured source of supply of phosphoric acid, a vital input for manufacture of DAP and other phosphate and complex fertilizers. The details of the existing joint ventures in the fertilizer sector are : 11 A n n u a l R e p o r t

15 ICS Senegal The Government of India (GOI), Indian Farmers Fertiliser Cooperative Ltd. (IFFCO) and Southern Petrochemicals Industries Corporation Ltd. (SPIC) are equity partners in a joint venture company set up in Senegal. The initial equity contribution of the Indian consortium in the venture in 1980 amounted to Rs crore, i.e. about 18.20% of its total equity. At present, the Indian sponsors together hold 27.28% equity (GOI-6.97%, IFFCO-19.09% and SPIC-1.22%), in the Joint Venture Company in Senegal named Industries Chimiques du Senegal (ICS). The company has a capacity to produce 6.60 lakh tonnes of phosphoric acid per annum and finished phosphate fertilizers in its plants in Senegal. A major portion of the phosphoric acid produced in the ICS plant is being utilized for production of phosphate fertilizers in the country through long term buy back arrangements with IFFCO. On account of the financial crunch, the performance of ICS has been affected recently. The Government is making efforts to restructure the company to improve its performance. JV with Jordan 3.9 SPIC, Jordan Phosphates Mines Company Ltd. (JPMC) and Arab Investment Company (AIC) have set up a joint venture project in Jordan to produce 2.24 lakh tonnes of phosphoric acid per annum % of the equity of the joint venture named Indo Jordan Chemicals Company Limited is held by SPIC, 34.86% by JPMC and 12.97% by AIC. The plant had been commissioned in May Also, the Phosphoric Acid from this venture is imported by SPIC and few other fertilizer units. JV with Morocco 3.10 A Joint venture IMACID (Indo Moroc Phosphore SA) between Office Cherifien Des Phosphates (OCP), Morocco and Chambal Fertilizers & Chemicals Ltd. (CFCL) to produce 3.30 lakh tonnes of phosphoric acid per annum was commissioned in Morocco in October After completion of first phase of revamp / debottlenecking project during 2004, the capacity has been increased to 3.65 lakhs tonnes per annum. The equity of US$ 65 million in the venture was held by OCP & CFCL equally. Subsequently in May 2005, both OCP & CFCL have sold one-third of their equity stake in IMACID to TATA Chemicals Limited. JV with Oman 3.11 IFFCO & KRIBHCO along with Oman Oil Company have set up a joint venture urea project in Oman for production of LMT of urea and 2.48 LMT of surplus ammonia per annum. The US$ 278 million equity of Oman India Fertilizer Company (OMIFCO) is held by the Oman Oil Company (50%) and IFFCO & KRIBHCO (25%) each. The implementation of the project was commenced on and the commercial production has started w.e.f. 14 th July The plant was formally inaugurated on 28 th January OMIFCO is supplying its urea to the Government of India at fixed Long Term Prices, for a period of 15 years and ammonia to IFFCO for 10 years at a fixed price under long term buy-back agreement. OMIFCO produced 14.3 LMT of Urea and 2.34 LMT of surplus Ammonia during the year The Company posted a profit of US$ 45 million during the year ended 31 st December, Department of Fertilizers, Ministry of Chemicals & Fertilizers

16 Overseas Joint Ventures Under Implementation/ Consideration: JV in UAE 3.12 SPIC is in the process of setting up a gas-based JV in Egypt nitrogenous fertilizer plant at Dubai in United Arab Emirates to produce 4.00 LMT of urea per annum at an estimated cost of US$ 170 million. The joint venture company by name SPIC Fertilisers and Chemicals Limited, incorporated in Mauritius is promoted by SPIC with equity participation of US $ million and Emirates Trading Agency of UAE with equity holding of US $ 6.4 million. The project is under implementation and is expected to be commissioned by the 2 nd quarter of 2008 and urea produced is proposed to be imported by SPIC through a firm buy back arrangement Indian Farmers Fertiliser Cooperative Ltd (IFFCO and El Nasr Mining Co. (ENMC) have formed a Joint Venture Company, the Indo Egyptian Fertiliser Company on 15 th November 2005 for setting up a Phosphoric Acid plant in Egypt with an installed capacity of 0.5 million tones of P per annum. The estimated cost of the Project is US$ 325 million, which is expected to be financed with a debt:equity ratio of 67:33. IFFCO and its Affiliates would hold the majority equity shareholding of 76% while ENMC and Affiliates would hold the balance equity of 24% in the Joint Venture Company. ENMC, the largest Rock Phosphate Mining Company of Egypt will supply Rock Phosphate, the basic raw material of the Project and IFFCO will buy back the entire Phosphoric Acid production. The target date for the financial closure is April The Project construction period is estimated at 36 months. The project is expected to achieve commercial production by the year JV in Tunisia 3.14 Gujarat State Fertilizers & Chemicals Ltd (GSFC) and Coromandel Fertilizers Ltd (CFL) alongwith Group Chimique Tunisien (GCT) & M/s Compagnie Des Phosphates De Gafsa (CPG) are setting up a joint venture project in Tunisia for production of 3,60,000 MTs of Phosphoric Acid per annum. The name of the JV Company is M/s Tunisian Indian Fertilisers S.A. (TIFERT). The JV will sell its full production to both the Indian parties viz GSFC and CFL. An MOU to this effect was signed in October, 2005 between GSFC & GCT/CPG. The cost of the project is approx. US $ 165 million + 5% with equity of US$66 million and borrowings of US $99 million. The project is expected to be commissioned by mid 2009 or latest by December, A n n u a l R e p o r t

17 Chapter Controlled Fertilizer-Urea The availability of urea, which is the only fertilizer under price and partial movement control of Government, remained satisfactory throughout the Kharif 2006 season and so far during Rabi Kharif The field opening stock of 8.80 LMTs as on coupled with indigenous production of LMTs and imports of LMT helped in progressively ensuring adequate availability to the States throughout the season. The cumulative availability of urea at the end of the season was nearly LMTs against the assessed requirement of LMTs. The sales of MTs urea during Kharif 2006 were higher by about 5.55% over LMTs of sales in Kharif Rabi The requirement of urea for Rabi has been assessed at LMTs envisaging a growth of about 11.25% over the sales of LMTs in Rabi The requirement would be met from the opening stocks of about LMTs and estimated production of LMTs and imports of about LMT during the season. Thus the cumulative availability of urea for Rabi has been estimated to be about LMTs by the end of 31 st March, Allocation of urea was restricted to 50% of production of installed capacity of each manufacturer during Kharif 2006 and Rabi The manufacturers are free to sell the remaining quantity of urea to the farmers anywhere in the country at notified maximum retail price. Decontrolled Fertilizers DAP & MOP Kharif In case of fertilizers other than the urea, which are decontrolled, no allocation is made under E.C. Act by the Central Government. Assessment of requirement of Urea, DAP and MOP is being made by the Department of Agriculture & Cooperation to enable better monitoring of availability at the national level DAP and MOP are the two major decontrolled and decanalised fertilizers, which are freely imported. In Kharif 2006, LMTs of DAP and 8.76 LMTs of MOP were imported The imports of DAP coupled with indigenous production of LMTs and the opening stock of 6.15 LMTs of DAP as on 1 st April, 2006 resulted in satisfactory availability of about LMT DAP during Kharif 2006 season. Sales of DAP and MOP in Kharif 2005 were LMTs and 9.99 LMTs, respectively. Rabi The production of DAP during Rabi is estimated to be about LMTs. Stocks of LMTs DAP as on coupled with imports will be adequate in meeting the country s requirement of DAP assessed at LMT during Rabi Department of Fertilizers, Ministry of Chemicals & Fertilizers

18 4.2.5 Stocks of 7.07 LMTs MOP as on coupled with adequate imports till October, 2006 will ensure that the country s requirement of MOP during Rabi is fully met Following table summarizes the season-wise position in respect of the availability and sales of the major fertilizers i.e. Urea, DAP and MOP during the last three seasons: urea is made keeping in view the requirements of each of the States The major share in transportation of fertilizers is of the Railways. During , Railways had moved about 73% of the fertilizers produced and/or imported in the country. During April- September 2006, about LMTs of fertilizers was moved by the Railways as against (Figures in LMTs) Crop Season Demand Assessment Cumulative Availability Cumulative Sales % age of availability to assessed demand Kharif 2005 Urea DAP MOP $ 36.81$ 22.81$ Rabi Urea DAP MOP $ 49.47$ 32.44$ Kharif 2006 Urea DAP MOP $ 48.67$ 20.47$ Rabi Urea DAP MOP * 50.37* 26.31* 95.06** 30.03** 10.07** * Estimated ** Up to January, $ Excluding silo stock & stock at shipment Movement of Fertilizers Under the Allocation of Business Rules, the Department of Fertilizers has been entrusted the responsibility of ensuring movement, distribution and allocation of controlled fertilizer, i.e. urea, from various fertilizer plants and ports in accordance with the State-wise assessment made by the Department of Agriculture & Co- operation (DAC). The distribution of imported LMTs in the corresponding period of Judicious management of the demand-supply balance has helped in reducing the average lead of fertilizer movement by rail. During the average lead was 824 KMs. During the current year the average lead for the period April-September, 2006 is 808 KMs. 15 A n n u a l R e p o r t

19 Chapter The installed capacity and production of fertilizers in the country at the end of Eighth Five Year Plan, in the terminal year of the Ninth Plan and at the beginning of 5 th year of Tenth Plan ( ) are indicated below: respectively, during the fifth year of the Tenth Plan The production of fertilizers in nutrient terms during was LMT of nitrogen and LMT of phosphate. Sector-wise targets and Sr. No. Installed Capacity and Producton of Nitrogenous and Phosphatic Fertilizers in Eighth, Ninth and Tenth Five Year Plans Particulars End of Eighth Five Year Plan End of Ninth Five Year Plan ( ) Beginning of 5th year of Tenth Five ( ) (In LMT) 1 Capacity i ) Nitrogen ii) Phosphates Production i ) Nitrogen ii) Phosphates } Estimated The installed capacity of nitrogen and phosphate in the terminal year ( ) of the eighth plan was LMT and LMT, respectively. Three major phosphatic fertilizer plants were commissioned during the Ninth Five Year Plan period, namely, Oswal Chemicals & Fertilizers Ltd.-Paradeep (since taken over by IFFCO), Indo-Gulf Corporation-Dahej and Gujarat State Fertilizers Company Ltd.-Sikka-II. Consequent upon reassessment of urea capacity on the basis of Dr. Y.K. Alagh Committee report, and DAP capacity by Tariff Commission, despite phasing out of 10 urea units due to closure, the installed capacity of nitrogen and phosphate increased from LMT at the end of Eighth Plan to LMT and LMT to LMT, achievements in respect of production and capacity utilization from onwards are given in Annexures-VI & VII. Plan Outlays For the Tenth Five Year ( ), Planning Commission has approved an outlay of Rs crore consisting of Rs crore as Domestic Budgetary Support Rs crore as External Aid routed through Budget and Rs crore to be met out of Internal & Extra Budgetary Resources (IEBR) For the year , a plan outlay of Rs crore was approved by the Planning Commission, with Rs crore to be met out of IEBR and balance amount of Rs crore Department of Fertilizers, Ministry of Chemicals & Fertilizers

20 as budgetary support. The details of Plan outlays are given in Annexure IX The outlays for is Rs crore, of which an amount of Rs crore will be met from the internal and extra budgetary resources and the balance amount of Rs crore will be provided by way of budgetary support. The gross outlay of Rs crore is for FCI- FAGMIL (Rs.0.14 crore), Fertilizers and Chemicals Travancore Ltd. (Rs crore), Brahamputra Valley Fertilizers Corporation Ltd. (Rs.4.50 crore), Madras Fertilizers Ltd., (Rs.9.00 crore), National Fertilizers Ltd. (Rs crore), Project and Development India Ltd., (Rs.2.50 crore), Rashtriya Chemicals & Fertilizers Ltd. (Rs crore). Krishak Bharti Cooperative Ltd. (Rs crore), Rs.1.00 crore each for M/.s. FCI and M/s. PPCL and other Departmental schemes (Rs crore) Of the total outlay, the budgetary support of Rs crore is for Fertilizers & Chemicals Travancore Ltd. (Rs crore), Madras Fertilizers Ltd. (Rs.9.00 crore) Brahamputra Valley Fertilizer Corporation Ltd. (Rs.4.50 crore) Rs crore each for M/s. HFC, M/s. FCI and M/s. PPCL and other Departmental schemes (Rs crore). Under other Departmental schemes, there is a provision of Rs.1.50 crore for Krishak Bharti Cooperative Ltd. For Rainfed Farming Project under Indo-UK Aid Programme, Rs.5.50 crore for S & T Programme; Rs.1.50 crore for Information Technology and Rs crore for capital subsidy for conversion of 4 existing FO/LSHS Plants into NG/LNG. Budgetary Support For the year , there was a net budgetary provision of Rs crore, Rs crore under Plan and Rs crore under Non-Plan. In the Revised Estimate (RE) for , the net provision is Rs crore, Rs crore under Plan and Rs crore under Non-Plan. For the year there is a net provision of Rs crore, Rs crore under Plan and Rs crore under Non- Plan. The details of Non-Plan and Plan Provision in (BE), (RE) and (BE) are given in Annexure X. 17 A n n u a l R e p o r t

21 Chapter For sustained agricultural growth and to promote balanced nutrient application, it is imperative that fertilizers are made available to farmers at affordable prices. With this objective, urea being the only controlled fertilizer, is sold at statutorily notified uniform sale price, and decontrolled phosphatic and potassic fertilizers are sold at indicative maximum retail prices (MRPs). The problems faced by the manufacturers in earning a reasonable return on their investment with reference to controlled prices, are mitigated by providing support under the New Pricing Scheme for urea units and the Concession Scheme for decontrolled phosphatic and potassic fertilizers. The statutorily notified sale price and indicative MRP is generally less than the cost of production of the respective manufacturing unit. The difference between the cost of production and the selling price/mrp is paid as subsidy/ concession to manufacturers. As the consumer prices of both indigenous and imported fertilizers are fixed uniformly, financial support is also given on imported urea and decontrolled phosphatic and potassic fertilizers. Measures of Support for Urea Until , the subsidy to urea manufacturers was being regulated in terms of the provisions of the erstwhile Retention Price Scheme (RPS). Under RPS, the difference between retention price (cost of production as assessed by the Government plus 12% post tax return on networth) and the statutorily notified sale price was paid as subsidy to each urea unit. Retention price used to be determined unit wise, which differed from unit to unit, depending upon the technology, feedstock used, the level of capacity utilization, energy consumption, distance from the source of feedstock/raw materials, etc. Though the RPS did achieve its objective of increasing investment in the fertilizer industry, and thereby creating new capacities and enhanced fertilizer production along with increasing use of chemical fertilizers, the scheme had been criticized for being cost plus in nature and not providing incentives for encouraging efficiency Given the importance of fertilizer pricing and subsidization in the overall policy environment, which has direct implications with reference to the growth and development of agriculture and sustainability of the fertilizer industry, the need for streamlining the subsidy scheme in respect of urea producing units had been felt for a long time. A High Powered Fertilizer Pricing Policy Review Committee (HPC) was constituted, under the chairmanship of Prof. C.H. Hanumantha Rao, to review the existing system of subsidization of urea, suggest an alternative broad-based, scientific and transparent methodology, and recommend measures for greater cohesiveness in the policies applicable to different segments of the industry. The HPC, in its report submitted to the Government on 3 rd April 1998, inter-alia, recommended that unit-wise RPS for urea may be discontinued and, instead, a uniform Normative Referral Price be fixed for existing gas based urea units and also for DAP and a Feedstock Differential Cost Reimbursement (FDCR) be given for a period of five years for non-gas based urea units. Department of Fertilizers, Ministry of Chemicals & Fertilizers

22 6.2.3 The Expenditure Reforms Commission (ERC), headed by Shri K.P. Geethakrishnan, had also examined the issue of rationalizing fertilizer subsidies. In its report submitted on 20 th September 2000, the ERC recommended, inter-alia, dismantling of existing RPS and in its place the introduction of a Concession Scheme for urea units based on feedstock used and the vintage of plants The recommendations of ERC were examined in consultation with the concerned Ministries/ Departments. The views of the fertilizer industry and the State Governments/Union territories, and economists/research institutes were also obtained. After due examination of all these views, a New Pricing Scheme (NPS) for urea units for replacing the RPS was formulated and notified on The new scheme took effect from It aims at inducing the urea units to achieve internationally competitive levels of efficiency, besides bringing in greater transparency and simplification in subsidy administration The NPS is being implemented in stages. Stage-I was of one year duration, from to Stage-II commenced from for a two years duration, from to The modalities of subsequent stages were to be decided by the Department of Fertilizers after review of implementation of Stage-I and Stage-II. Under NPS, the existing urea units have been divided into six groups based on vintage and feedstock for determining the group based concession. These groups are: Pre-1992 gas based units, post-1992 gas based units, pre-1992 naphtha based units, post-1992 naphtha based units, fuel oil/low sulphur heavy stock (FO/LSHS) based units and mixed energy based units. The mixed energy based group shall include such gas based units that use alternative feedstock/fuel to the extent of more than 25% as admissible on Under NPS, escalation/de-escalation is given in respect of variable cost related to changes in the price of feedstock, fuel, purchased power and water. Under the scheme, no reimbursement is allowed in respect of investment made by a unit for improvement in its operations nor are the gains as a result of operational efficiencies to be mopped up It has also been provided under the scheme that the concession rates during Stage-II shall be adjusted for reduction in capital related charges and enforcement of efficient energy norms. Preset energy norms for urea units during Stage-II of NPS have already been notified and intimated to urea units. Reduction in rates of concession during Stage-II of NPS for urea units on account of reduction in capital related charges have also been notified and intimated to urea units. Phased Decontrol of Urea Distribution As per the New Pricing Scheme for urea units, it was also envisaged that decontrol of urea distribution/movement will be carried out in a phased manner. During Stage-I, i.e. from to , the allocation of urea under the Essential Commodities Act 1955 (ECA) was restricted up to 75% and 50% of installed capacity (as reassessed) of each unit in Kharif 2003 and Rabi , respectively. It was further envisaged that during Stage-II commencing from , urea distribution will be totally decontrolled after evaluation of Stage-I and with the concurrence of the Ministry of Agriculture. 19 A n n u a l R e p o r t

23 The total decontrol of urea distribution was deferred initially for a period of six months w.e.f i.e., up to Kharif 2004, which has been subsequently deferred up to Rabi i.e., up to The existing system of 50% ECA allocation and 50% outside ECA allocation has now been extended to Stage-III of NPS. Policy for Urea Units for Stage-III of NPS The Government has approved the pricing policy for urea units for Stage-III of New Pricing Scheme(NPS) w.e.f to The policy has been formulated keeping in view the recommendations of the Working Group set up under the Chairmanship of Dr. Y.K. Alagh. The salient features of the proposed Stage-III Policy which is aimed at promoting further investment in the urea sector, are to maximize urea production from the Urea units including through conversion of non-gas based Units to gas, incentivising additional urea production and encourage investment in Joint Venture(JV) projects abroad. It is also aimed at establishing a more efficient urea distribution and movement system in order to ensure availability of urea in the remotest corners of the country The Stage-III policy seeks to promote usage of most efficient and comparatively cheaper feed stock Natural Gas/LNG for production of urea in the country. The policy lays down a definite plan for conversion of all non-gas based urea units to gas. At present, there are 9 urea units (MFL, SPIC, ZIL, MCFL, SFC, GNFC, NFL-Nangal, NFL-Bhatinda, NFL-Panipat) which are based on naphtha or FOL/LSHS as feed stock. All these 9 units are required to switch over to Natural Gas/ LNG within a period of next three years. In order to incentivise conversion of non gas based units to gas, the policy provides for a regime where there will be no mopping up of energy efficiency for a fixed period five years for naphtha based as well as FO/LSHS based units to gas and provides for one time capital investment assistance to these units for conversion to gas during the next three years. A specific policy to this effect will be announced separately by the Government Considering the likely growth in consumption of urea in the years to come, the policy seeks to encourage the existing urea units to produce beyond 100% of their installed capacities by introducing a system of incentives for additional urea production subject to merit order procurement. The units increasing production beyond 110% will be compensated at their concession rate subject to the over all cap of Import Parity Price (IPP). The policy also encourages setting up of Joint Venture projects abroad where gas is readily available at reasonable prices The policy seeks to rationalize distribution and movement of urea and the system of freight reimbursement with the objective of ensuring availability of urea in all parts of the country. The Government will continue to regulate movement of urea up to 50% of production depending upon the exigency of the situation. The State Government will be required to allocate the entire quantity of planned urea arrivals including both regulated and de-regulated urea in district-wise, month-wise and supplier-wise format. The monitoring of movement and distribution of urea throughout the country up to the district level will be done by an On line web based monitoring system. To facilitate movement of fertilizers to far flung area, the reimbursement of freight will Department of Fertilizers, Ministry of Chemicals & Fertilizers

24 be based on actual leads for rail and road movement NPS Stage-III seeks to forward the principles of uniformity and efficiency in urea production as enunciated during Stage-I and Stage-II of NPS and also aims at bringing in more transparency in distribution of fertilizers across the country. The Department of Fertilizers will continue to endeavour to promote the growth of fertilizer industry in the country and ensure adequate availability of fertilizers to the farmers. Expenditure on Urea Subsidy The financial support to indigenous and imported urea from the year onwards is indicated below: - of imported fertilizers from time to time. The cost of various inputs/ utilities, such as coal, gas, naphtha, rock phosphate, sulphur, ammonia, phosphoric acid, electricity, etc., as also the cost of transportation went up significantly during the eighties. The gas-based fertilizer units commissioned during this period also involved higher capital investment per tonne of installed capacity, necessitating constant upward revision in the retention prices. The selling prices of fertilizers to the farmers, however, remained almost at the same level between July, 1981 and July The Government effected an increase of 30% in the issue prices of fertilizers in August, 1991 after a gap of a decade. The selling price of urea, which was reduced by 10% in August Rs in Crore Period Amount of subsidy disbursed on Total subsidy Indigenous urea Imported urea on urea (BE) (RE) (BE) The steady increase in fertilizer subsidies over the years has largely been the result of increasing production / consumption and increases in the costs of inputs of indigenous fertilizers and prices 1992, was revised upwards by 20% in June 1994 followed by another increase by 10% with effect from The prices of urea were again revised in February 2002 by 5% and by Rs A n n u a l R e p o r t

25 PMT of urea w.e.f The price increase made effective from was, however, later withdrawn w.e.f The current price is Rs per tonne exclusive of local levies. However, the hikes in prices of urea have not materially altered the position in terms of the absolute outgo in the form of subsidy, because of the steady growth in production to meet the growing demand and rise in the costs of inputs. Concession Scheme for Decontrolled Fertilizers Phosphatic and Potassic fertilizers were decontrolled w.e.f Consequent upon this, the prices of these fertilizers registered a sharp increase vis-à-vis the price of urea, and also led to imbalance in fertilizer usage in terms nutrient application. In order to cushion the impact of increase in prices of these fertilizers, the Ministry of Agriculture introduced a scheme of concession on sale of decontrolled fertilizers. In a major policy initiative taken by the Government on , the scale and coverage of the scheme was substantially increased to give impetus to the stagnating demand for these fertilizers and to ameliorate the nutrient imbalance in the soil, which is essential for sustaining the desired growth in agricultural productivity. Again in , the concession on these fertilizers was increased w.e.f vis-à-vis the uniform indicative maximum retail prices (MRPs) for these fertilizers except Single Super Phosphate (SSP). These measures were calculated to induce the farmers to optimize the balanced use of the three major plant nutrients The Department of Fertilizers is administering the concession scheme for extending financial support to decontrolled P&K fertilizers on sales w.e.f Under the concession scheme, base rates of concession are announced annually after the approval of Government. The final concession rates, except for SSP, are calculated and announced quarterly after taking into account the average price of raw material & intermediates of the preceding quarter and the average exchange rate of the current quarter The concession rates for complex fertilizers were derived from the concession rates of indigenous DAP and MOP till However, the Government accepted the recommendations of Tariff Commission s cost price study on complex fertilizers with effect from and, based on the same, the complex manufacturers have been divided in two groups. The base and the final quarterly rates for both the groups of the complex fertilizers are being calculated and announced separately w.e.f Based on the recommendation of the Tariff Commission (TC) and the Inter Ministerial Group (IMG) Government has implemented a revised methodology of working out concession rates for DAP (indigenous & imported) and MOP w.e.f The Country is almost fully dependent on imported raw material/intermediates (i.e. rock phosphate, sulphur and phosphoric acid) for the production of phosphatic fertilizers in the country. The prices of these commodities, both finished fertilizer and intermediates, have shown a rising trend in the international market during last two years. The prices of finished fertilizers / fertilizer inputs prevailing in the international market have a direct bearing on the total subsidy outgo on phosphatic and potassic fertilizers. In view of 22 Department of Fertilizers, Ministry of Chemicals & Fertilizers

26 the difficulties arising from the situation, both in terms of the procurement and pricing of the raw materials/intermediates and finished phosphate fertilizers, it was considered necessary to work out an alternative methodology of pricing, linking the price of phosphoric acid with the international price of DAP. An Expert Group under the chairmanship of Prof. Abhijit Sen, Member, Planning Commission was set up to examine the issues related to pricing of phosphatic fertilizers. The Expert Group has submitted the report and has suggested a methodology for working out concession rates for indigenous DAP based on prices of imported DAP. The report is under examination of the Department of Fertilizers As regards SSP, the Department of Fertilizers pays an ad-hoc concession. The MRP of SSP is fixed by State Governments and varies from State to State. This ad-hoc dispensation and the low rates of concession, coupled with the progressive increases in the input cost, not only led to a sharp decrease in SSP consumption, which is often referred to as the poor farmers fertilizer, but also had a serious adverse impact on the SSP industry. Keeping this in view, it was decided to increase the ad-hoc concession rate of SSP from Rs. 650/- to Rs. 975/- PMT w.e.f The State Governments have also been requested to maintain the present MRP of SSP in their States The base rates of concession for making on account payment on the sales of decontrolled P&K fertilizers during the year ( to ) announced by this Department are as under: (In Rs. / MT ) Product Base rate of concession w.e.f DAP ( Indigenous ) Group - I 6173 Group - II 6355 DAP (Imported ) 5206 MOP 5972 SSP w.e.f Complexes Group - I Group - II The actual expenditure under the concession scheme was Rs crore during the year and Rs Crore during The budget estimate (BE) for the year is Rs Crore, which has gone upto Rs Crore in RE The amount of concession disbursed on sale of decontrolled P&K fertilizers since is given below: 23 A n n u a l R e p o r t

27 24 Year ( BE ) (RE) (BE) (Rs. In crore) Amount Of Concession Disbursed Rationalizing and Streamlining of Concession Scheme Since 1992, Government of India is administering Concession Scheme on decontrolled Phosphatic & Potassic (P&K) fertilizers i.e. DAP, NPK, MOP and SSP. The basic objective behind this Scheme is to provide these fertilizers to the farmers at affordable prices. For this purpose, Department of Fertilizers fixes the indicative MRP at which the manufacturers/importers are required to sell decontrolled fertilizers. The delivered normative cost price of these fertilizers is generally higher than the MRP. The manufacturers/importers are provided the difference between the normative cost and MRP in the form of concession. Accordingly, the benefit of subsidy on fertilizers is passed on to the farmers by making the fertilizers available to them at the subsidized selling price. This scheme was implemented by Department of Agriculture & Cooperation upto 2000 and it was then transferred to Department of Fertilizers. After the transfer of the Scheme, Department of Fertilizers framed fresh guidelines and now the guidelines dated are in operation. Under the concession Scheme, the on account payment i.e. 85% of the concession is released to the manufacturers/importers on submission of details of sales in the prescribed Proforma-A. The balance payment of concession is released to the manufacturers/importers after the State Governments certify the sales. The idea behind releasing on account payment of concession is to ensure the availability of liquidity with the manufacturers/importers in the event of delay in the certification of sales. The role and responsibilities of the State Governments in certification of sales have been clearly defined laying down the time frame for the same. Under the guidelines dated , the fertilizer sold by the manufacturers/importers to the dealers registered under Fertilizer Control Order (FCO), the Government agencies and the NPK mixture manufacturers is eligible for concession. In order to facilitate the manufacturers to make the fertilizer available far and wide, the Department has been permitting marketing arrangements whereby the manufacturers use the dealers network of the other manufacturers/importers In addition to provisions under FCO, to ensure supply of quality fertilizers, especially standard SSP, a Technical Audit & Inspection Cell (TAC), under the aegis of Projects & Development India Ltd., (PDIL), was constituted. Accordingly, the Department of Fertilizers, Ministry of Chemicals & Fertilizers

28 TAC is assigned the task of examining various grades of Rock Phosphate (both indigenous and imported) and recommend the grades of Rock Phosphate with source of origin, alongwith technical parameters such as consumption norms of each grade, for manufacture of SSP as per FCO specifications. The TAC is also mandated to conduct six monthly technocommercial audits of SSP plants and to confirm to whether the SSP units are using the specified/ notified grades of Rock Phosphate. The objective behind the constitution of TAC is to put a curb on the sale of non-standard SSP to the farmers and to cross check the concession claimed by the industry In the wake of shortage of Rock Phosphate of the specified/notified grades, Department of Fertilizers modified the existing guidelines pertaining to the use of Rock Phosphate and issued fresh guidelines on , whereby the use of grades/sources of Rock Phosphate were liberalized. As per the modified guidelines, the manufacturers of SSP can procure the Rock Phosphate from the sources other than the notified ones. In addition to the existing grades, Department has also notified three other grades/ sources of Rock Phosphate thereafter by virtue of which the supply of the Rock Phosphate has increased for the manufacture of SSP. Fertilizer Monitoring System (FMS) FMS is a path breaking IT initiative undertaken by Department of Fertilizers (DOF). FMS monitors movement of urea and decontrolled fertilizers at various stages in their value chain. It also facilitates subsidy payment in case of decotrolled fertilizers and soon will do the same for urea. FMS consists of 3 modules: Company Module Subsidy Payment Module and Public Domain Module Company Module The Company Module captures data at the company end, starting from import of raw materials/finished fertilizers and ending with the generation of subsidy claim. Access to company module is only to authorized personnel of respective companies. Payment Module Once the claim is generated at the company end, the payment module gets activated. Access to payment module is to concerned DOF officials only. The payment Module deals with subsidy payment based on the claims generated by the different companies. FMS provides for a module enabling the respective State Department of Agriculture to enter the variant quantity which will then be processed in Department of Fertilizer for subsidy payment. Further, the State Government Official can also view the updated district-wise dispatch and sales as well as stock position in their state. Public Domain The Public Domain module is a website ( based interface with the public, wherein some dispatch and sales based reports are available for viewing. In addition, updated data like concession rates, MRP etc. is also provided. 25 A n n u a l R e p o r t

29 The various important reports currently available on the website are State-wise/District-wise/FG-wise/Companywise Dispatch Report. State-wise/District-wise/FG-wise/Companywise Dispatch Report Sales Report. Distributor-wise report. Fertilizer Movement summary. The company module has been functioning since December 2005 and the companies have been keying data in it. Several changes have been made in it based on user requirement and user testing from time to time. The payment module has been functioning since May Parallel run of the payment module has been currently going on starting with the On Account claims of April During the parallel run, claim for each company are generated simultaneously from the current system and FMS. Both are being processed on the same file. The Public Domain Module has been functioning since 26 th January, Newer and more informative reports are presented on it from time to time. The formal launch of the application was done by the Hon ble Minister (C&F) s on Balanced use of Fertilizers: A Task Force on the Balanced use of Fertilizers constituted by Department of Agriculture & Cooperation submitted its report in The task force recommended for nutrient based subsidy instead of the present product-based regime of subsidy. In addition to it, the Task Force recommended for encouragement to the usage of organic manure, bio-fertilizers and NPK mixture fertilizers and their judicious use with chemical fertilizers. It impressed upon the application of nutrients, which are soil specific and crop/climate specific. The Task force recommended that the basket of the fertilizers subsidy may be extended to other fertilizers such as those covering secondary and micronutrients to ensure to its optimal use by the farmer for mitigating the deficiencies and sustaining balanced fertilization. It also recommended for strengthening the soil testing laboratories, fertilizers quality control laboratories and to prepare soil fertility maps in the country. Further, it recommended for fortification of the major fertilizers with the appropriate grade of secondary/micro nutrients, customized and value added fertilizers An Inter Departmental Group under the chairmanship of Secretary (Agriculture) was set up to look into the recommendations of the Task Force and comment on its relevance, suitability and implementability by Department of Fertilizers, Department of Agriculture & Cooperation and other concerned Ministries/ Departments of Government of India. So far, the Group has held its two meetings. The first meeting was held on under the chairmanship of Secretary (Agriculture) and the second was held under the chairmanship of Secretary (Fertilizers) on The report of the Inter Departmental Group is awaited. 26 Department of Fertilizers, Ministry of Chemicals & Fertilizers

30 Chapter There are 10 public enterprises and one multistate co-operative society namely Krishak Bharati Cooperative Limited (KRIBHCO) under the administrative control of the Department. The Fertilizer Corporation of India Limited Introduction Incorporated on 1 st January, 1961, FCI was reorganized along with National Fertilizers Ltd. (NFL) with effect from into five companies namely, FCI, NFL, Hindustan Fertilizer Corporation Ltd.(HFC), Rashtriya Chemicals & Fertilizers Ltd. (RCF) and Projects & Development India Ltd. (PDIL). Following reorganisation FCI comprised four units located at Sindri (Jharkhand), Gorakhpur (Uttar Pradesh), Ramagundam (Andhra Pradesh) and Talcher (Orissa), with a total annual capacity of 5.87 LMT of nitrogen beside an abandoned project at Korba (Chhattisgarh). As on , FCI had an authorized share capital of Rs.800 crore and paid up share capital of Rs crore. The accumulated losses as on were Rs. 12, crore. Reference to BIFR The Corporation was declared sick in November, 1992 by the Board for Industrial and Financial Reconstruction (BIFR), and on the BIFR ordered winding up the FCI in terms of Section 20(1) of the Sick Industrial Companies (Special Provisions) Act, The Appellate Authority for Industrial and Financial Reconstruction (AAIFR) on upheld BIFR s order dated Closure of the Company In view of the continuing losses of the Company, stemming from technical and financial nonviability of operations, the Government decided to close down FCI in September Consequently, a Voluntary Separation Scheme (VSS) was offered to all its 5712 employees. All the employees, who opted for VSS have since been released, except 60 employees who are engaged in discharging statutory obligations including safety and security of properties/assets of the various units of the Company However, on appeals filed by the Government and the Company against the orders of AAIFR and BIFR for winding up of FCI, the High Court of Delhi on directed the BIFR to reconsider their order dated to the extent of hiving off the Jodhpur Mining Organisation for forming a new company and revival of other units if any proposals are received within a reasonable time. BIFR in their meeting held on sanctioned the scheme of arrangement of de-merger between FCI and FAGMIL with effect from and confirmed their prima facie opinion regarding winding up of the company. BIFR vide their orders dated conveyed their opinion to High Court of Delhi. This reference was registered as Company Petition (C.P.) No.183/2004 in the High Court. Pursuant to the prayer of the Department of Fertilizers, the High Court has, inter-alia, granted further time to the company and the Department for submission of a viable proposal for revival of the FCIL. The matter is pending before the High Court. 27 A n n u a l R e p o r t

31 28 Production / Sales Performance In view of the closure of the Company, the operations have remained suspended as per details given below: Name of Unit Year of stoppage Gorakhpur 1990 Ramagundam 1999 Talcher 1999 Sindri 2002 Korba (*) : The project was never commissioned. Financial Results During the year the company incurred a net loss of Rs crore which includes Rs crore as interest on GoI loan and Rs.0.32 crore towards depreciation. During the year , the company is expected to incur a loss of Rs.1300 crore with an interest component on GOI loan at Rs.1290 crore and 0.32 crore towards depreciation. Hindustan Fertilizer Corporation Limited Introduction The Hindustan Fertilizer Corporation Limited (HFC) was incorporated on 14 th March, 1978 as a result of the reorganization of the erstwhile Fertilizer Corporation of India Limited (FCIL), and NFL Group of Companies. The HFCL comprised Barauni unit (Bihar), Durgapur unit and Haldia Project (West Bengal) and Namrup Unit (Assam). The Namrup Unit was hived off with effect from to form a separate entity with the name of Brahmaputra Valley Fertilizer Corporation Ltd.(BVFCL). As on 31 st March 2006, HFC had an authorized capital of Rs crore and a paid up capital of Rs crores. Closure of the Company The Company was declared sick by B.I.F.R. in November Subsequently, the Government decided to close the Company on account of techno-economic non-viability. Almost all employees have opted for Voluntary Separation Scheme (VSS) and as on , only 44 employees were on the rolls of the company to carry out post-closure activities. BIFR Status During the course of proceedings before BIFR, the Namrup units of the Company were demerged with effect from and the residual Company comprising three units at Barauni, Durgapur and Haldia and the Fertilizer Promotion & Agricultural Research Division (FP&ARD) was ordered to be closed. The AAIFR through its order on had permitted hiving off the Namrup units of HFC into a new company under the name of Brahmaputra Valley Fertilizer Corporation Limited w.e.f and remitted back the matter to BIFR for reconsideration of its decision regarding revival of Durgapur, Barauni units and the Research Division. The case registered as Case No.516/1992 is pending before the BIFR. The Department of Fertilizers has conveyed the intention of the Government for exploring possibilities of revival of the HFCL, to the BIFR. In the hearing held on , the BIFR has appointed IDBI as the Operating Agency (OA) under section 17(3) of the Sick Industrial Companies (Special Provisions) Act and has, inter-alia, directed the OA to take further necessary action and submit report within one month. The Government, as the promoters of the Company, have also been permitted to Department of Fertilizers, Ministry of Chemicals & Fertilizers

32 submit their fully tied up offer in response to the advertisement to be issued by the OA. The matter is pending before the BIFR. Operating Performance The operational activities of the Company have been suspended due to the decision taken by the Government for closure. During the year , HFC has incurred a net loss of Rs crore and during , the company has projected a net loss of Rs crore, out of which the loans from GOI, PSUs and cash credit constitute Rs crore. Due to suspension of operations of Barauni unit since January, 1999 and of Durgapur unit since July, 1997, the production performance has been nil. The Haldia Project was never commissioned. Pyrites, Phosphates & Chemicals Ltd. Introduction Pyrites, Phosphates & Chemicals Ltd. (PPCL) was set up in It was entrusted the responsibility of exploiting the country s pyrites deposits. The company had three production units located at Amjhore (Bihar), Dehradun (Uttaranchal) and Saladipura (Rajasthan). The company was also engaged in trading of indigenous fertilizers. As against the authorized capital of Rs. 100 crore, the paid up capital of the company was Rs crore as on The Government approved closure and hiving off of the Dehradun and Saladipura units in July, 2002 and the Amjhore unit including all other establishments in June 2003, implementation of the Voluntary Separation Scheme (VSS) for its employees, and disposal of the assets as per due procedure. Accordingly, the company has relieved 1211 employees till December, 2006 retaining 7 employees for all the three units, the Registered Office and the Corporate Office. The company has so far spent Rs crore on implementation of VSS from the funds provided by the Government for the purpose The company s winding up proceedings are pending before the Patna High Court in the Case C.P. No.14/2002. The intention of the Government for exploring possibilities of revival of the company has been conveyed to the High Court and further time has been sought for submission of a concrete proposal for the revival The net loss for the year was Rs crore. The loss for is projected at Rs crore. The accumulated loss of the company as on was crore. Revival of Closed Units of FCI, HFC, and PPCL Pursuant to the Common Minimum Programme (CMP) of the UPA Government, the possibilities of revival of the closed fertilizer Public Sector Undertakings (PSUs) namely, FCIL, HFCL and PPCL are being explored, based on market demand and techno-economic feasibility. In respect of FCIL and HFCL, a proposal for obtaining in-principle approval of the Government for revival was considered by the Cabinet. Pursuant to the direction of the Cabinet, the proposal was submitted to the Bureau for Reconstruction of Public Sector Enterprises (BRPSE). The BRPSE has found merit in the rationale for exploring the options for revival of the closed 7 units of FCIL/HFCL having regard to (i) demand-supply gap of urea, (ii) availability of natural gas, (iii) utilization of their infrastructure thereby reducing 10% of the investment in the new units and (iv) cost of urea proposed to be 29 A n n u a l R e p o r t

33 30 produced in these units from natural gas being cheaper than the price of imported Urea. The Board also agreed with the views of Department of Fertilizers that the earlier decision of the Cabinet for closure of the units of FCIL/HFCL therefore needs to be reversed in order to enable the Department to explore various options for the revival of the seven units. In view of the above, the Board has recommended that Government may accord in-principle approval for reversal of its earlier decisions The Board has further recommended that Department of Fertilizers may prepare a comprehensive and fully tied up proposal for revival of FCIL/HFCL and vetted by an independent Consultant and brought before BRPSE as soon as possible In the case of PPCL, the feasibility of revival of the company is also being explored. A proposal in this regard is being finalized for submission to the BRPSE. After the recommendations of BRPSE are received, the requisite proposal will be submitted to the Cabinet for obtaining necessary approvals. Rashtriya Chemicals and Fertilizers Limited (RCF) Introduction Rashtriya Chemicals and Fertilizers Limited (RCF) was incorporated as a separate company on 6th March 1978 as a result of reorganization of the erstwhile Fertilizer Corporation of India Limited. At the time of its formation, the company had only one operating unit at Trombay (near Mumbai) and two major projects under implementation viz.; Trombay IV and Trombay-V expansion. The gas based Thal- Vaishet fertilizer complex about 100 Kms from Trombay, was also later implemented by RCF and it commenced commercial production on June 1, As on 31st March 2006, the company had an authorized share capital of Rs. 800 Crore and a subscribed and paid up capital of Rs Crore. Production Performance The annual installed capacity of all the units of RCF is about LMT of nitrogen and 1.17 LMT of phosphate. The production during was 8.84 lakh tonnes of nitrogen and 1.09 lakh tonnes of phosphate. Production during the year was severely affected due to feedstock/ natural gas short supply. Besides fertilizers, the company also produces a number of industrial products such as Methanol, Concentrated Nitric Acid, Methylamines, Ammonium Bicarbonate, Sodium Nitrate, Sodium Nitrite, Dimethyl Formamide, Dimethyl Acetamide, Ammonium Nitrate, Argon, etc. During April 2006 to January 2007, RCF produced 7.88 lakh tonnes of industrial nitrogen as against 7.65 lakh tonnes during the corresponding period of the previous year and 0.68 LMT of phosphate as against the production of 0.88 lakh tonnes in the corresponding period of the previous year. During the year , the company is likely to produce 9.03 LMT of nitrogen and 0.77 LMT of phosphate. Capacity utilization during the present year has been affected mainly due to suspension of ANP production after detonation on the Prilling Tower Top on followed by severe gas cut. Continued feedstock constraint has been limiting the production performance of the Company. Department of Fertilizers, Ministry of Chemicals & Fertilizers

34 RCF among Top Ten PSUs to receiv MOU Excellence Award for outstanding performance in Trombay Urea-V unit is shut down due to nonavailability of associated gas. Sales Performance The sale of fertilizers (including bought-out products) during the year was of the order of lakh tonnes, which corresponds to 9.31 lakh tonnes of nitrogen and 1.05 lakh tonnes of phosphate. During the period April-October 2006, RCF sold 5.43 lakh tonnes of nitrogen and 0.66 lakh tonnes of phosphate as against 5.19 lakh tonnes of nitrogen and 0.61 lakh tonnes of phosphate for the corresponding period last year. The Company also produces and sells biofertilizers, micronutrients, and 100% solid soluble fertilizers. The sales turnover of industrial products division of the Company was Rs. 421 crore for the year During the current year, sales of industrial production division till October, 2006 was Rs. 283 crore. The company continued with its Fertilizers Promotion Programmes to educate the farmers in the scientific and balanced use of fertilizers. RCF has two Farmer Training Institutes, one at Nagpur and other at Thal to impart training to farmers and farm labourers in integrated development and new farming techniques, etc. Financial Results During the year , the Company reported a net profit (after tax) of Rs Crore. During the period April October 2006, the Company has made a net profit (before tax) of Rs Crore and net profit (after tax) of Rs crore. Disinvestment Government of India disinvested about A n n u a l R e p o r t

35 Hon ble Union Minister of Chemicals & Fertilizers and Steel Shri Ram Vilas Paswan is inaugurating the NFL Stall. Also seen is Shri G.S. Mangat, CMD, NFL. 32 percent of the equity Share Capital of the Company during Further disinvestment of about 1.57 percent and about 0.27 percent was effected during October 1992 and December 1994 respectively. Thus, the total disinvestment has been of the order of 7.48 percent of the equity. Modernisation / Expansion Schemes Ammonia-V plant at Trombay, commissioned in 1981, is being technologically upgraded at an estimated cost of Rs. 249 Crore, to reduce energy consumption. Concentrated Nitric Acid Plant at Trombay is being modernized at an estimated cost of Rs. 14 Crore to improve the longevity of plant. An Argon plant is being set up at Thal to recover argon from purge gas of the ammonia plant. The project is estimated to cost Rs. 94 Crore. RCF envisages an expansion project at Thal (Thal-III Expansion) by setting up 2200 MTPD ammonia plant and 3500 MTPD urea plant at an estimated cost of Rs Crore. The Technoeconomic Feasibility Report of the project has been submitted to the Government for examination. Methanol plant at Trombay, commissioned in 1965, is being technologically upgraded at an estimated cost of Rs. 108 crore to reduce energy consumption. `Rapidwall plant is proposed to be set up at Trombay using Gypsum as a raw material which is a by-product of Phosphoric Acid Plant. The Project is estimated to cost Rs. 71 crore. Grievance Redressal The Company has a good grievance address and redressal system, with complaints/ suggestion boxes placed at convenient locations in the Area Offices/ Administrative Building at Department of Fertilizers, Ministry of Chemicals & Fertilizers

36 Trombay and Thal. Any aggrieved customer/ dealer or other citizen can approach the Company for any failure of the quality/price charged/conduct of any officer/employee to a special officer of the Company not below the rank of General Manager who will act as the Nodal Officer for redressal. The name, address and telephone No. of the officers is available on Company s website It is assured that the Nodal Officer will immediately take up the issue with the concerned department and appropriate action will be taken within seven days from the date of receipt of the complaint or an appropriate reply is sent within seven days as the case may warrant. A similar grievance address and redressal system/procedure is followed by the Company in respect of issues related to staff also. Employment of SC/ST, Ex-Service Men, Physically Handicapped Persons & Other Backward Classes The guidelines regarding reservation in Recruitment and Promotion for SC, ST, OBC, Ex-Servicemen and Physically Handicapped Persons are being followed. Out of total strength of 4152 (as on 1 st November, 2006), there are 557 SCs, 266 STs, 211 OBCs, 10 Ex-Servicemen and 21 Physically Handicapped Persons in the Company. Reservation in Dealership The Company has been giving emphasis to appoint SCs/STs dealers. Priority is always given to SC/ST dealers by giving them special exemptions like no security deposit, preference in supply of material for the first three years of operation and during peak seasons, providing training to SC/ST dealers to acquire the knowledge of business. The company has also launched special drive for appointment of SC/ ST dealers. A press advertisement has been released in local newspapers on Welfare of Minorities RCF as a policy includes a representative of the minorities in the recruitment selection boards to ensure that the minorities get their rightful share in the services and benefit of developments. National Fertilizers Limited (NFL) Introduction National Fertilizers Limited (NFL) was incorporated on 23 rd August, 1974 for setting up two nitrogenous plants, at Bathinda (Punjab) and Panipat (Haryana) with LSHS as feedstock, each having Urea production capacity of 5.11 LMT per annum. Consequent upon the reorganization of the FCI, the Nangal Unit (including Nangal Expansion Project) of FCI was also transferred to NFL w.e.f A gas based ammonia and urea fertilizer project on the HBJ pipeline at Vijaipur in Guna District of Madhya Pradesh, with an annual installed capacity of 7.26 lakh tonnes Urea commenced commercial production on The urea capacity was doubled from 7.26 LMT to LMT per annum on commissioning of its expansion unit on The production capacity of gas based plants in the country has been re-assessed w.e.f. 1 st April, 2000 resulting in capacity revision from 7.26 lakh tones to 8.64 lakh tones for both Vijaipur-I and Vijaipur-II. A revamp of urea plant at Nangal was successfully completed three months ahead of 33 A n n u a l R e p o r t

37 The dividend cheque of Rs crore for the financial year presented to Hon ble Union Minister for Chemicals & Fertiilizers and Steel Shri Ram Vilas Paswan by Shri G.S. Mangat, CMD, NFL. schedule and commercial production commenced w.e.f. 1 st Feb With this, the installed capacity of urea at Nangal Unit increased from 3.30 lakh tonnes to 4.78 lakh tones per annum raising the company s total installed capacity to LMT of urea corresponding to LMT of N (Nitrogen) in terms of fertilizer nutrient. The company also produces various industrial products like nitric acid, ammonium nitrate, sodium nitrite/nitrate, sulphur, methanol, liquid nitrogen, liquid oxygen etc. besides bio-fertilizers. The company commissioned an Argon gas plant designed to produce 120 NM 3 /hr. of Argon gas at the Panipat Unit in October A Methanol Augmentation Scheme at Nangal Unit was commissioned in October 1998 thereby enhancing the daily production capacity of Methanol from 50 tonnes to 67 tonnes. The company s biofertilizers plant at Indore produces three strains of biofertilizers with an installed capacity of 100 MT per annum. The authorized capital of the company as on stood at Rs.500 crore and the paid up capital at Rs crore, comprising Government of India s share of Rs.479 crore (97.64%) and the remaining Rs crore (2.36%) held by financial institutions and others. Production Performance During the year , the company produced LMT of urea and tonnes of industrial Nitrogen ( N ). The percentage share of NFL in Urea production in the country is estimated at 14%. During the year Department of Fertilizers allowed production of additional Urea of 1.13 MT from Vijaipur over and above the 100% capacity. Production above 100% capacity at Bathinda and Nangal could not be taken due to economic non-viability vis-à-vis lower import parity price 34 Department of Fertilizers, Ministry of Chemicals & Fertilizers

38 and increased cost of production owing of steep hike in LO/LSHS prices. Production of 175 MT of Bio-fertilizers was the ever best performance as comparable to the previous best of 173 in Similarly, dispatch of MT of Neem Coated Urea during the year was also the ever-best performance. Panipat Unit recorded the ever-best production and dispatch of sulphur of 5307 MT and 5273 MT respectively. Upto January, 2007, the company has produced LMT of urea thereby achieving a capacity utilization of 106.9% (pro-rata basis) in respect of urea production. The CAN production at Nangal unit has been stopped w.e.f 1 st April 05 due to its non-viability. Marketing Despite the fact that there is a tremendous untapped potential and great need for fertilizer use in the sectors like waste land, rainfed agriculture, horticulture, etc., present fertilizer use is quite low. Country s future need of food security and balance diet can be met only by expanding the base and quantum of fertilizer use in addition to use of organic, bio-fertilizers, etc. Demand of Fertilizers in non-traditional sector is bound to increase. The company achieved sales turnover of Rs crores compared to Rs crores for the previous year. In terms of quantity, LMT of urea was sold against LMT sold during the previous year. Company has been making continuous efforts to contain the marketing expanses, especially, warehouse handling, rake handling, inventory carrying cost. Products movements are continuously monitored to achieve the highest level of efficiency. Financial Performance During the year , the company recorded MoU a post-tax profit of Rs crores, and disbursed a dividend of Rs crore which is 8.30% of the paid up capital NFL received Excellent rating under MoU system for the year , and for on the basis of provisional data. Employment of SC/ST, Ex-Servicemen and Physically Handicapped Persons as on The details in this respect are given in the following table: Group Total SC ST Ex- Physically OBC Employees Serviceman Handicapped A B C D Total A n n u a l R e p o r t

39 Hon ble Union Minister for Chemicals & Fertilisers and Steel Shri Ram Vilas Paswan visits NFL Plants. Also seen is Shri G.S. Mangat, CMD, NFL. 36 Public/Staff Grievance Redress Machinery Based on the model grievance procedure notified by DPE, the company has framed a Grievance Redressal Procedure for staff and officers of NFL. The objective of the Grievance Redressal Procedure is to provide easily accessible machinery for expeditious settlement of grievances of staff and officers with the aim of providing satisfaction and in improved productivity and job efficiency of the organization. For systematic monitoring and supervision of Public Grievances, Head of Corporate HR Department has been nominated as Director (Grievance) as per the directives of the Government. In addition to this in-built system, the company has also set up Public Grievances Centres at the Units, whose working is supervised by respective Heads of the Unit/ Marketing Division with the help of the Grievances Redressal Mechanism. Reservation in Dealership Appointment of Dealers is governed by NFL s Marketing Manual and reservations for SC/ST, Ex-serviceman, Physically handicapped etc. are governed by guidelines issued by Deptt. of Fertilizers, Ministry of Chemicals & Fertilizers. Projects & Development India Limited Introduction Projects & Development India Limited (PDIL) was registered as a separate company in March 1978 after hiving off from FCI. The company has its registered office at Noida, Uttar Pradesh. The authorized share capital of the company is Rs.60 crores and paid up capital is Rs crores as on Restructuring Scheme The Government of India approved a Revival Package for PDIL on , which included Department of Fertilizers, Ministry of Chemicals & Fertilizers

40 closure of E&C and R&D Division at Sindri, besides various reliefs and concessions to make the company viable on a long term basis. The Revival Scheme was approved by BIFR on The Govt. of India has extended all the reliefs and concessions envisaged in the approved revival scheme, and the net worth of the company has become positive. Major restructuring in terms of manpower has also been done and 1227 employees have been released under VRS/VSS. The regular manpower strength has come down to 449. Operating Results The Company has earned a net profit of Rs crore for the year During the period April to November 2006, a profit of Rs 7.12 crore has been earned. The estimated profit for the financial year is Rs crore. Engineering & Consultancy Division The company is mainly engaged in Design, Engineering, Procurement, Inspection, Store Management and Supervision during construction and commissioning of fertilizer and chemical plants. It has played a pivotal role in establishing fertilizer plants in India from concept to commissioning, besides the trouble shooting and NDT services for health maintenance of the plants. Projects/assignments in fertilizer sector under execution in Energy Saving Schemes: Phase I Scheme for Ammonia Plants of IFFCO viz MTPD Ammonia Plant at Kalol, 1520 MTPD Ammonia Plant at Aonla-I, 1520 MTPD Ammonia Plant at Aonla-II, 977 MTPD Ammonia Plant at Phulpur I and 1520 MTPD Ammonia Plant at Phulpur II has been completed. The Phase II Scheme of the same plants is also nearing completion. Ammonia: Technology Upgradation project of Rashtriya Chemicals & Fertilizer Limited for providing Design, Engineering Consultancy services for Trombay V Ammonia Upgradation Project is scheduled for commissioning shortly. Engineering services for revamp of hydrogen plant in Kalyan of National Peroxide Limited is at start up and commissioning stage. Engineering consultancy services for debottlenecking project for capacity enhancement of IFFCO Ammonia and Urea Plants at Aonla I & II and Phulpur I & II; revamp activities of Paradeep DAP complex of IFFCO. Engineering and project execution services for energy saving project of Vijaipur-I Ammonia Plant of National Fertilizer Ltd. Revamp of Urea Plant at Bharuch of GNFC. Revamp of Methanol Plant at Trombay Of RCF. Techno Economic Feasibility Report and detailed project reports for various clients in the fertilizer sectors. Foreign Assignments PDIL has proved its engineering excellence and contribution not only in Indian fertilizers industry but also leaped forward in establishing its credentials in fertilizer and diversified sectors abroad. The following assignments have been completed/under execution: The Design and Detailed Engineering activities for 2200 MTPD Ammonia Plant at Karatha in Australia for M/s Burrup Fertilizers Pty Ltd has successfully been commissioned. 37 A n n u a l R e p o r t

41 A view of site plant project. 38 Preparation of ITB and consultancy & engineering services for site development and water intake facilities for the 1500 TPD Phosphoric Acid and 4500 TPD Sulphuric Acid Project of Indo Egyptian Fertilizer company, SAE, Egypt. Preparation of Initial Feasibility and Bankable Feasibility Reports for a JV Ammonia/Urea Project in Nigeria. Preparation of ITB for execution on EPC basis an Ammonia/Urea Project in Pursian Gulf. Engineering services for Cooling Water System for OMIFCO Fertilizer Plant in Oman. Preparation of ITB Document for an Ammonia Plant in Iran has recently been secured and executed. Jobs in Diversified Sectors PDIL under diversification efforts, is concentrating for jobs in Refineries and Infrastructure. Success has also been achieved and few jobs have been secured under stiff (i) (ii) competition from established players in Refinery sector and it is expected that PDIL shall be getting many jobs from various Refineries in near future. Some of the major jobs executed / being executed by PDIL in the diversified sector are : Oil, Gas & Refinery The engineering and site supervisory services job for modernization of Effluent Treatment Plant at Guwahati Refinery of IOCL is progressing well. Project management consultancy services for city gas distribution and compressed natural gas project for National Capital Territory of Delhi was secured from Indraprastha Gas Ltd. PDIL secured EPCM services for modification in gas Sweetening United Gas processing unit of GAIL (India) Ltd. Infrastructure Sector PDIL achieved a major breakthrough in the Infrastructure Sector in the year by securing major jobs from Ministry of Defence for Department of Fertilizers, Ministry of Chemicals & Fertilizers

42 Project Management Consultancy Services and Review Consultancy job for Married Accommodation Project at various locations. The jobs are progressing well. Further, the PMC service contract has been extended for construction supervision of additional accommodation at Chandigarh. SSP Audit Department of Fertilizers assigned the job of Techno Commercial Audit of SSP plants, DAP Plants and NPK Plants in India. The Audit has been completed upto March 2006 and physical audit for the half year September 2006 is under progress. Inspection & NDT Credentials as Third Party Inspection (TPI) and Non-Destructive Testing (NDT) Agency are firmly established. Statutory inspection, testing and certification of Spheres, Mounded Storages & Bullets for LPG & Ammonia Storage Tanks continue to be a specialized activity for PDIL. A major TPI Rate Contract for two years by Bharat Heavy Electricals Ltd. (BHEL) for third party inspection of all bought out equipment and supplies sourced from within India for the various Projects being executed by all Divisions of BHEL. Inspection to the tune of equipment valued about Rs 200 Crore has been carried out during the year and the quantum of inspection in the next year is envisaged to be of the order of Rs 400 Crore of equipment. PDIL continued to receive Inspection jobs from M/s Snamprogetti, spa, Itlay during the year for supplies ordered on Audco, Chennai and L&T, Hazira for Projects abroad executed by them. PDIL has been awarded NDT services job of inspection and certification of Ammonia Storage Tanks/Horton Spheres by IFFCO for their Kandla and Kalol Units and Bathinda Unit of NFL. Also carried out statutory testing of many LPG Bullets and Horton Spheres for BPCL & IOCL at their various installations. AUS (Automatic Ultrasonic Scanning) of Reformer Tubes for fertilizer plants and refineries continues to be a specialized activity. Catalyst Division Production of main catalysts i.e. Super Methanation, Low Temperature CO Shift Conversion and Vanadium Pentoxide Sulphuric Acid during the year under review was 59 MT as compared to 302 MT last year. During the year, orders executed for Madras Fertilizers, Chennai (for SR Catalyst); RCF Trombay V (Super Methanation and LT Guard Catalysts) and Thal (HTS Catalyst); and for V2O5 Sulphuric Acid Catalyst to SAIL, Bokaro & Rourkela, Ankur Fertilizers, Rama Phosphates, and Krishna Industrial Corporation. Orders obtained for HTS Catalyst for the Vizag Refinery of HPCL, Vishakapatanam and for Low Temperature Shift Co-Conversion Catalyst for NFL, Vijaipur. MOU for For the first time PDIL has signed MOU for the year with the Department of Fertilizers, Ministry of Chemicals & Fertilizers. Facilities to SC/ST/OBC Employees PDIL continues to extend facilities to SC/ST/OBC employees as per guidelines issued by Government from time to time. A Liaison 39 A n n u a l R e p o r t

43 40 Committee is functioning to protect and safeguard the interests of SC/ST/OBC in the matter of recruitment and for SC/ST employees in the matter of promotion. The company has managed to execute the various jobs apart from regular employees with the help of Consultants and Technical manpower on contract basis. During the year , 34 nos. of engineers have been engaged on contract basis for 3 years. The Manpower position as on including SC/ ST & OBC is as follows:- Total No. of Employees SC ST OBC A B C D On contract Total The Fertilizers And Chemicals Travancore Limited (FACT) Introduction The Fertilisers And Chemicals Travancore Limited (FACT) was incorporated in In 1947 FACT started production of Ammonium Sulphate with an installed capacity of 50,000 MT per annum at Udyogamandal, near Cochin. In the year 1960, FACT became a PSU and towards the end of 1962, Government of India became the major shareholder. From a modest beginning, FACT has grown and diversified into a multi-division/multi-function organisation with basic interest in manufacture and marketing of fertilisers and petrochemicals, engineering consultancy and design and in fabrication & erection of industrial equipments. In , the Government of India approved a financial relief package for the Company consisting of the following: Waiver of all outstanding interests as on amounting to Rs crore and penal interest there on. Conversion of 50% of the outstanding GOI loan of Rs crore as on i.e Rs crore into equity capital. Write off of the non-plan loan of Rs.60 crore given for Voluntary Retirement Scheme. Write off of the balance outstanding GOI loan of Rs crore as on (Rs crore). The above relief to be made effective as on 31 st March Financial Performance Consequent to the implementation of the financial relief package and with maximization of capacity utilization, the Company has registered a net profit of Rs crore during the financial year ended 31 st March 2006 as against a loss of Rs.168 crore during the previous year. At the end of the financial year the net worth of the company is Rs crore. The abnormal increase in the prices of Petroleum products during the year has severely affected the profitability of the Company. The additional impact on account of increase in prices during over is Rs crore in the case of raw materials and Rs crore in the case of furnace oil. Department of Fertilizers, Ministry of Chemicals & Fertilizers

44 The loss during April 2006 to October 2006 was Rs crore as against the loss of Rs crore during April 2005 to October Production Performance Udyogamandal Division: During the year the production of Factamfos 20:20 and Ammonium Sulphate was MT and MT, respectively, as compared to MT and MT, respectively, during Production of Factamfos and Ammonium Sulphate during April, 2006 to January, 2007 is 1.10 LMT and 1.44 LMT, respectively, as against 1.13 LMT and 1.36 LMT respectively during the corresponding period in the previous year. Petrochemical Division: The production of Caprolactam for the year was MT as against MT during the year The production was lower due to high stock of Caprolactam and poor off take leading to plant shutdown for 48 days during December 2005-January Production of Caprolactam for the year upto October 2006 is MT as against MT during the corresponding period of the previous year. Cochin Division: Production of Factamfos 20:20 during the year was 6.02 LMT as against 4.56 LMT in Production of Factamfos for the year upto January 2007 is 4.66 LMT as against 4.85 LMT during the corresponding period in the previous year. Marketing Division: Fertiliser sale during was 9.83 LMT as against 7.84 LMT during last year. It registered an increase of 25% over the last year. During the year marketing division created new performance records in marketing fertilizers. Sale of Factamfos Category of Dealership during the year was tonnes as compared to tonnes during the year achieving 48% increase over previous year. The sale was mainly on cash and carry basis and against trade advances. Total Sales of fertilizers during the year upto October 2006 is MT as against MT during the corresponding period of the previous year. FEDO & FEW: During the year FEDO has orders on hand worth Rs.1230 lakh compared to Rs.1000 lakh in FEDO has considerably improved its financial performance in comparison to the previous year. The turnover of FEW for the year was Rs.362 lakh as against Rs.300 lakh for the year During the year FEW has bagged orders for a value of Rs.538 lakh. On the shop floor front, FEW has doubled its turnover by registering jobs worth Rs.300 lakh compared to Rs.152 lakh in the previous year. Redressal of Public Grievances and welfare measures A Public Grievance Cell is functioning in the Company, as per norms laid down by Government of India. At present, no grievance received from public is pending for redressal. Reservation in Dealership: FACT has always followed a policy of encouraging Institutional Dealers ST/SC Dealers ST/SC candidates to take up dealership. Details of Dealership allotted are as follows:- Private Dealers Total Dealership As on As on Increase Nil A n n u a l R e p o r t

45 Special Campaign was carried out in earlier years to enlist ST/SC Dealership. No security deposit is collected from ST/SC dealers and they are encouraged to do business by constant follow up. This policy is being continued. Employment of SC/ST, Ex-Servicemen, Physically Handicapped & Other Backward Classes (OBCs) The break-up of manpower as on Group A B C D Total is as under: Total number of employees Number of employees belonging to SC ST EX PH OBC Welfare of Minorities: The Company had provided facilities for the Welfare of Minority Communities such as Land for Mosques at Ambalamedu and Udyogamandal, Land for Christian Cemetery in Udyogamandal, construction of Pathway to St. Joseph s Church near JNM Hospital, Udyogamandal, Lands for SCI, Catholic, Marthoma, and Jacobite Syrian Churches at Ambalamedu, four separate cemeteries for the above 4 Christian Churches in Ambalamedu and Burial grounds (Kabristan) for Muslims at Ambalamedu Expansion and Diversification Projects FACT has formulated certain proposals for the long term sustenance of the organization. These are aimed at establishing own facilities for production of intermediates, which are at present being outsourced; expansion of production capacities of end products; and diversification into other areas. FACT had invited Expression of Interest (EOI) from reputed organizations for participation in the above projects either on a Build, Own, Operate and Transfer basis or as a Joint Venture. Response has been good and the offers are in the preliminary stages of evaluation. Some of the important proposals are given below: M/s. Dutch State Mines (DSM), suppliers of the know-how and basic engineering for the existing Caprolactam Plant (through Stamicarbon) for Capacity Enhancement of Caprolactam Plant as a Joint Venture between FACT and DSM. They would also undertake marketing the product in the International Market. Detailed discussions on the proposal have been held. The proposal is being studied to confirm its technical and economic viability. M/s. Adi Establishment, Syria, has put forward a proposal for setting up an Ammonia/Urea Complex in Egypt as a Joint Venture between FACT and Adi Establishment. A Memorandum of Intent (MOI) has been signed between FACT and Adi Establishment. Proposals for augmenting the production capacities of Sulphuric Acid and Phosphoric Acid in Cochin Division with and without enhancement of production capacity of Complex Fertilizers are in various stages of discussion. Food Processing Park: FACT is planning to set up a Mega Food Processing Park at Udyogamandal. Detailed Project Report for the Park is in various stages of discussion. 42 Department of Fertilizers, Ministry of Chemicals & Fertilizers

46 Madras Fertilizers Limited (MFL) Introduction Madras Fertilizers Limited (MFL) was incorporated in December 1966 as a Joint Venture between GOI and AMOCO India Incorporation of USA (AMOCO) with GOI holding 51% of the equity share capital. In 1985, AMOCO disinvested their shares, which were purchased by GOI and NIOC in their respective proportions on The revised share holding pattern was GOI 67.55% and NIOC 32.45%. The share holding pattern upto May 11, 1997 was GOI 69.78% and NIOC 30.22%. On May 12, 1997, MFL made its maiden Public Issue of 2,86,30,000 shares of face value of Rs 10 at a premium of Rs 5 per share. Of these, 2,58,09,700 shares were subscribed. After the Public Issue, the shareholding pattern is as follows: Shareholder Rs. Cr. % GOI NIOC Public Total The company has an authorised share capital of Rs 365 Cr comprising of Rs.175 Cr as equity and Rs 190 Cr as preference share capital. The preference share capital is yet to be subscribed. As on , the paid-up equity was Rs Cr MFL commenced commercial production in 1971, with an annual installed capacity of 1.7 lakh tonnes of Nitrogen (N) and 1.12 lakh tonnes of Phosphate (P). A major revamp/expansion was carried out in 1998 at a cost of Rs. 601 crore, enhancing the annual installed capacity to 2.54 lakh tonnes of N and 1.42 lakh tonnes of P, corresponding to 4,86,750 MT of urea and 8,40,000 MT of complex fertilizers. However, certain problems were also experienced in the revamp process which led to frequent shut downs, low capacity utilization and resultant financial difficulties and liquidity problems. In the wake of this, there were also problems of adjusting to the Urea Pricing Policy and the norms of determination of concession on decontrolled fertilizers which came into effect in Over a period of time, despite two rounds of financial restructuring, financial difficulties and problems of capacity utilization etc., have, therefore, continued. Keeping this in view the Company has submitted a financial restructuring proposal, which is under consideration of the Government. Production Performance The annual installed capacity of MFL is as follows: Product Annual Capacity (MT) Pre-Revamp Post-Revamp Ammonia 2,47,500 3,46,500 Urea 2,92,050 4,86,750 NPK 5,40,000 8,40,000 During the year , the company produced thousand tonnes of Urea and thousand tonnes of NPK-Complex fertilizers with capacity utilisation of 76% and 25%, respectively. During the period April 2006 to January 2007, 43 A n n u a l R e p o r t

47 the company produced thousand tonnes of Urea and 37.0 thousand tonnes of NPK- Complex fertilizers. During the year , the company is likely to produce thousand tonnes of Urea and thousand tonnes of NPK-Complex fertilizers with capacity utilisation of 101% and 20% respectively. Further during the year , the company produced 235 tonnes of Bio-fertilizers. The company is likely to produce 220 tonnes of Bio-fertilizers during the year Sales Performance The sales performance of the company is given below: MFL is likely to post a loss of Rs crore for the year Reservation In Dealership State-wise, Region-wise SC/ST dealer strength is as bellow: States SC/ST Dealers Tamil Nadu 504 Pondichery 6 Andhra Pradesh 388 Karnataka 444 Kerala 134 Maharastra 1 Total 1477 Product Urea NPK Imported Potash Bio Fertilizers Total Sales Actual ,85,965 2,04, ,91,869 (in MT) Estimates of ,14,883 1,73, ,88,763 The following special terms are allowed for the above category: Waiver of security deposit of Rs 5000/- Exemption from seasonal minimum sales norms Brahmaputra Valley Fertilizer Corporation Limited Introduction 44 Financial Performance : During , the Company ended up with a net loss of Rs crore and the total accumulated losses went up to Rs crore. The total accumulated loss as of was Rs crore as against the peak net worth of Rs crore resulting in complete erosion of net worth as on As the Company has become sick, the matter has been reported to BIFR and the formalities have been complied with during February For the period April to Oct 2006 the company has reported a provisional loss of Rs crore Brahmaputra Valley Fertilizer Corporation Limited (BVFCL) with its Corporate Office at Namrup, Assam, was incorporated after being hived off from the Hindustan Fertilizer Corporation Ltd. (HFCL) w.e.f It owns Units at Namrup (Assam). The other establishments of the company are Marketing Division, Liaison Offices at NOIDA and Kolkata. The authorised and paid up share capital of the company as on was Rs.510 crore and Rs crore respectively. The Namrup revamp proposal, which aimed at achieving a higher production level of 5.5 lakh Department of Fertilizers, Ministry of Chemicals & Fertilizers

48 meteric tonnes per annum (LMTPA) of urea compared to the actually achieved level of 1.5 LMPTA in the pre-revamp period against the original designed installed capacity of 7.15 LMTPA was approved by the Government in October, 1997 at a total cost of Rs. 350 crores. Originally, zero date of the project was and was to be completed by However, the commissioning of the project got delayed and the first Revised Cost Estimate (RCE) was approved by the Government revising the cost estimate of the project to Rs crore (completion cost of Rs crore) and the date of commissioning as However, out of the three units at Namrup, Namrup-III unit re-started production from March, 2002 and one stream of Namrup-I (which is basically an ammonia unit) was commissioned in May, The revamp of Namrup-II was delayed due various reasons resulting in cost and time overrun. The Public Investment Board (PIB) approved second revised cost estimates of BVFCL s Namrup Revamp Project of Rs crore, with a target of commissioning of Namrup II by 31 st December, On account of various problems, this target could not be achieved, and Namrup-II unit was commissioned on Physical Performance Namrup III unit produced 2.19 LMT of urea during as against 2.06 LMT in In the current year, the actual production of Namrup-III unit for April 2006 to January 2007 is 1.88 LMT of Urea, and the projected production for the Year is 2.43 LMT. Namrup II Unit produced 32,391 MT of Urea in From April 2006 to January 2007 the production was 0.47 LMT with projected production of 67,256 MT for Financial Performance BVFCL has incurred a loss of Rs crore during against loss of Rs crore in The loss upto October 2006 was Rs crore and projected loss for is Rs crore. Sales Performance The Company sold 2.13 LMT of Urea during as against 2.48 LMT during The projected sales for are 3.20 LMT. The company has made efforts towards adopting cost effective marketing strategies, i.e. maximising sale in economic marketing zone, economic mode of movement, reduction in warehousing cost, freight etc. resulting in savings in marketing cost. Public /Staff Grievance Redress Machinery and Welfare Activities Grievance Redressal Cell is functioning in BVFCL Namrup for quick disposal of the grievances of the employees/public/customers. The company is shouldering social responsibilities, such as helping local educational and socio cultural institutions. Meritorious children of employees are given awards from Employees Amenities Fund. Apart from these, Company also provides medical facilities to local population at nominal cost and conducts medical camps in nearby villages. Piped drinking water is provided to local population. Besides, financial grant to the extent possible is provided to local socio-cultural and sports activities to promote these activities among the Namrupites. The 45 A n n u a l R e p o r t

49 Company maintains a big playground, one indoor stadium, one mela ground apart from Hindi and English medium schools. The Company financially helps to clubs belonging to employees/ workers and their families. Sufficient tree plantation is done on continuous basis to maintain the eco-system and aesthetic beauty of the Township. The corporation is also maintaining public roads in association with local Members of Legislative Assembly (MLA). With these activities and participations, the Company s status is well established and recognized in the entire State. Employment of SC/ST, Ex-servicemen, Physically Handicapped & Other Backward Classes Persons The matter of employment of persons belonging to SC/ST, Ex-servicemen, Physically handicapped & other backward classes are taken care of during recruitment process. Reservation policy is being followed as per Government guidelines. Category wise manpower strength is as under: Group Total SC ST Ex- Serviceman PH OBC Officers Workers Total Reservation in dealership As per the scheme for appointment of SC/ST candidates as dealers formulated by the Government of India, 25% of the appointment of dealers are to be reserved for SC/ST category. Category-wise details of which are as follows : General : 418 ST : 44 SC : 17 Total : 479 Steps have been initiated for achieving the target of 25% of reservation in dealership for SC/ST candidates as per directives given by Department of Fertilizers. Consequent to lack of response from SC/ST candidates, in spite of advertisement exclusively for appointment of SC/ ST dealers, SC/ST commission as well as Director of Agriculture of the respective States have been approached for their help in identifying suitable applicants from SC/ST community for BVFCL dealership. All the applications received from SC/ST category have been considered for BVFCL dealership. FCI Aravali Gypsum & Minerals India Limited, Jodhpur Introduction The FCI Aravali Gypsum & Minerals India Limited (FAGMIL) was incorporated under the Companies Act 1956 as a Public Sector Undertaking on after hiving off the Jodhpur Mining Organisation (JMO) of Fertilizer Corporation of India Ltd. (FCI). The authorized share capital of the Company was Rs.10 crore as on and the paid up capital was Rs.7,32,98,000/- as on Production Performance The Production/Sale of gypsum in was 8.54 LMT as against the target of 7.75 LMT. The target of production/sale for the year is 8.70 LMT. 46 Department of Fertilizers, Ministry of Chemicals & Fertilizers

50 Financial Performance The Company has earned a net profit of MOU Rs Lakh during the year as against Rs lakh during the year Company paid a dividend of 20% on paid up capital, amounting to Rs lakh, and a dividend tax amounting to Rs lakh thereon. The provisional profit (pre-tax) up to October 2006 was Rs lakh, which is projected at Rs lakh for The company has entered into an MOU with the Department of Fertilizers on , and has been striving hard to meet the targets enunciated in the said MOU. Employment of SC/ST, Ex-servicemen, Physically Handicapped & Other Backward Classes (OBCs) Information in respect of employment of SCs/ STs, Ex-Servicemen, Physically handicapped & OBCs as on 30 th below:- Oct is as furnished Total SC ST Ex- PHC OBC employees Service men NIL 8 Krishak Bharati Cooperative Limited (KRIBHCO) Introduction KRIBHCO was incorporated as a Multi State Cooperative Society on to implement the Ammonia/Urea fertiliser project at Hazira, based on natural gas from Bombay High/South Bassein. The Society commissioned its Ammonia/Urea Plant in The Hazira complex has two ammonia plants and four streams of Urea. The annual capacity of Urea Plants is reassessed as LMT. KRIBHCO installed a Bio-fertilizer unit at Hazira in The capacity of this Unit was enhanced from 100 MTPA to 250 MTPA in Two more Bio-fertilizer units of 150 MTPA capacity each have also been installed one at Varanasi, U.P in September 2003, and another one in Lanja, Maharashtra in March As on the paid up share capital was Rs crore which includes Rs crore (68.4%) of Government of India and remaining Rs crore (31.6%) of Cooperative Societies. The total membership as on was As on the authorised share capital of the Society is Rs.500 crore and the paid up share capital is Rs crore which includes Rs crore(68.1%) of Government of India and remaining Rs crore (31.9%) by Cooperative Societies. The total membership as on was Production Performance During the year KRIBHCO produced LMT of Urea (8.31 LMT in terms of nitrogen) achieving capacity utilization of 104.5% and LMT of Ammonia achieving capacity utilization of 112.5% based on re-assessed capacity. Society has also produced MT of Bio-fertilizers during the year. During the year (up to January 2007), the Society has produced LMT of Urea (6.45 LMT in terms of nitrogen) achieving 47 A n n u a l R e p o r t

51 The dividend cheque of Rs crore for the financial year presented to Hon ble Union Minister for Chemicals & Fertilizers and Steel Shri Ram Vilas Paswan by Shri B.D. Sinha, Managing Director, KRIBHCO. Also seen in the picture are Dr. J.S. Sarma, Secretary (Fertilizer), Shri Vijay Chhibber, Joint Secretary (Fertilizer), Dr. V.P. Singh, Marketing Director and Shri R. Kamra, Finance Director, KRIBHCO. 48 capacity utilisation of 97.31%. The production during August/September 06 was less due to shutdown of total plant on account of gas supply restriction/stoppage from GAIL caused by unprecedented flood in Hazira in August 06. For the full , the Society is likely to produce LMT of Urea (7.78 LMT of nitrogen). Society has also produced 441 MT of Biofertilizers during the year (upto October 2006) with projected production for at 790 MT of Bio-fertilizers. Sales Performance Urea In the year , the Society sold a total of LMT Urea. In the year (upto October 2006) overall sales of LMT of Urea had been achieved. Own Urea In the year , the Society sold LMT of own Urea. In the year (upto October 2006) the Society has sold 9.21 LMT of own Urea. OMIFCO Granular Urea During the year the Society sold 5.65 LMT OMIFCO Granular Urea. During the year (upto October 2006) Society sold 5.11 LMT OMIFCO Granular Urea. KSFL Urea The Society sold a quantity of 1.59 LMT Urea of KRIBHCO Shyam Fertilizers Ltd. (KSFL) ( to ). During the financial year ( upto October 2006) Society has sold 4.73 LMT of KSFL Urea. BVFCL Urea The Society has sold a quantity of 2.13 LMT of BVFCL Urea during the financial year During the financial year Department of Fertilizers, Ministry of Chemicals & Fertilizers

52 ( upto October 2006) Society has sold 1.39 LMT of BVFCL Urea. Ammonia The Society also sold 0.82 LMT of surplus Ammonia during the year. During the financial year (upto October 2006) the Society has sold 0.31 LMT of surplus Ammonia. Bio-fertilizers During the year , the Society sold 714 MT of Bio-fertilizer. This is the highest ever sale so far. During the year (upto October 2006) the sale of Bio-fertilizer was 393 MT. Financial Results During the financial year , the Society earned a net profit of Rs crore (post-tax) and paid a dividend Rs During the financial year (upto October 06) the Society has made a provisional profit (pre-tax) of Rs crore. The Society envisages a profit( pre-tax) of Rs.163 crore and net profit (post-tax) of Rs.116 crore during the financial year Expansion and Diversification Plans Joint Ventures KRIBHCO, IFFCO and Oman Oil Company have set up a joint venture fertilizer complex in Oman with equity participation of 25%, 25% and 50% each, respectively, in the Joint Venture Oman India Fertilizer Company (OMIFCO). The complex has annual capacity of LMT Urea and 2.48 LMT of surplus Ammonia. Government of India is off-taking the entire Urea production. The project achieved commercial production on 14 th July KRIBHCO and IFFCO are handling the distribution of OMIFCO urea in India. The project was completed in July 2005 at a cost of US$ 892 million against the approved cost of US$ 969 million achieving a rare distinction of saving of US$ 77 MM (7.9%) in cost. Due to savings in the project cost, sponsors equity worth US$ 42 million has been repatriated. Till 31 st October 2006, the plant has produced more than 25 LMT Urea and 18 LMT ammonia since inception. OMIFCO paid a Dividend of US$ MM for the first year of operation in 2005 at the rate of 5.6% on US$ 320 million original equity. For the first semester of 2006, OMIFCO has declared an interim dividend of 18.7%. KRIBHCO Shyam Fertilizers Limited ( KSFL) KRIBHCO has acquired Shahjahanpur Fertilizer Complex (with annual capacity of 8.64 LMT Urea) of Oswal Chemicals & Fertilizers Ltd. through its Joint Venture Company KRIBHCO Shyam Fertilizers Limited (KSFL), as part of its strategic investment plan on January 18, KSFL was promoted by KRIBHCO and Shyam Basic Infrastructure Projects Pvt. Ltd, and was registered under Companies Act 1956 on 8 th December KRIBHCO has invested Rs crore being 60% equity and rest 40 % is held by Shyam Basic Infrastructure Projects Pvt. Ltd. KRIBHCO has management control and marketing rights of entire urea production. In the short duration of 73 days plant operations by KSFL during Year , Ammonia and Urea plants achieved all time record capacity utilization of 111% and 109%, respectively. KSFL has posted pre-tax and post-tax profit of Rs. 597 lakh and Rs. 392 lakh, respectively. 49 A n n u a l R e p o r t

53 Equity Participation Gujarat State Energy Generation Limited (GSEG) KRIBHCO has diversified to Power Sector and has invested Rs crore being 30.2% equity in Gujarat State Energy Generation Limited (GSEG), a Joint Venture Company promoted by Gujarat State Petroleum Corporation and other companies of Government of Gujarat. GSEG has set up 156 MW Combined Cycle Power Plant based on natural gas at Mora District Surat, Gujarat. For GSEG posted pre-tax profit of Rs lakh and post tax profit of Rs lakh. It declared 5% dividend. Nagarjuna Fertilisers & Chemicals Limited ( NFCL) Society has an equity participation of Rs crore in NFCL, which is 2.15% of NFCL s paid-up share capital of Rs crore. Future Plans KRIBHCO is pursuing Hazira Fertilizer Project Phase-II consisting of State-of-the-art mega size ammonia plant of capacity 1850 MT/ 2000 MT and urea plant of capacity 3200MT/3500 MT based on natural gas/r-lng at its existing Fertilizer Complex at Hazira. Plant will be based on natural gas/r-lng. KRBHCO will be pioneer to set up mega size ammonia-urea plant. There will be saving in project cost due to availability of infrastructure and offsite facilities. Agricultural Promotion and Rural Development KRIBHCO continued to organize programmes for the benefit of farmers such as kisan melas, farmers meetings, block demonstrations, field days, agriculture campaigns like free plantations, animal and human health check-ups, farmers study visits, cooperative conferences, group discussions, cooperative societies and village adoption programme, technical wall painting and distribution of technical literature, etc. The Society organized 1800 agricultural and rural development programmes during the financial year directly benefittting more than 8.0 lakh farmers. During kharif 2006, 584 agricultural and rural development programmes directly benifitting more than 2.50 lakh farmers. During the year , the society had adopted 61 cooperative societies and villages and continued the above mentioned programmes. Besides, Analysis of soil and water samples were done through its six mobile soil testing vans and fertilizer application recommendations were given. The Society adopted villages for their over all development. 117 storage-cum-community centres have also been built till date. The other important activities include the following;- Krishak Parivar Sangam Programmes organized to promote National integration. The Society has also set-up a high-tech farm advisory center known as KRIBHCO Krishi Pramarsh Kendra at NOIDA to provide latest information to farmers of all states. The facilities are free and include testing of soil samples and advise farmers regarding balanced fertilizer use aimed at higher production and quality. During the 4.5 thousand soil samples were tested for micronutrients and during Kharif thousand soil samples were tested for micro nutrients from mobile soil testing van. Society 50 Department of Fertilizers, Ministry of Chemicals & Fertilizers

54 has tested 17.5 thousand soil samples for major nutrients during and during Kharif 2006, 5.1 thousand soil samples tested by Mobile Soil Testing for major nutrients(n.p.k.) Other than facilities include KRIBHCO Kisan Helpline Phone No and for answering queries from farmers. KRIBHCO also provides through its website, information about happenings in DoF and other agencies to the farmers by means of useful weblinks. Agri-market and weather information are similarly made available to farmers through website. Seed Multiplication Programme KRIBHCO also initiated Seed Production Programme in to provide quality/ certified seeds of main crops to the farmers which has had a very encouraging response from farmers and cooperative societies. The seeds are made available to the farmers through KBSKs, Cooperative Societies and State Cooperative Federations in different states. The Society stepped up production of seeds from 2928 quintals in to 1.60 lakh quintals in This is the highest ever production of seeds so far. During the financial year , the Society has sold 1.53 lakh quintals of seeds. During the financial year , (upto October 2006) KRIBHCO has already produced 1.12 lakh quintals of seeds and sold 1.17 lakh quintals. Official Language KRIBHCO has sufficient staff to implement Official Language Policy. An Official Language Implementation Committee (OLIC) has been constituted in KRIBHCO. Four Hindi workshops were organized at KRIBHCO NOIDA. Dual language support Office Automation packages have been implemented in KRIBHCO. Hindi word Processor facility has been provided in computer systems of the society. To motivate the employees for doing official work in Hindi, a running trophy has been introduced in KRIBHCO Head Office. Parliamentary committee on Official Language inspected the progressive use of Hindi of KRIBHCO s Area Office Varanasi. The Committee highly appreciated the area office Varanasi and KRIBHCO Management as 100% official work is done in Hindi in Area office Varanasi. KRIBHCO won First prize (Rajbhasha) for the year introduced by Department of Fertilizer. The Society has been among the prize winners over the last three consecutive years ( : First; :Second and :First). The prize was awarded by Hon ble Union Minister for Chemicals & Fertilizers and Steel, Shri Ram Vilas Paswan to Shri B. D. Sinha, MD KRIBHCO in the Hindi Advisory Committee meeting held on 11 th November, 2006 at Port Blair. KRIBHCO also organized an essay competition for the school children located at NOIDA. Twenty nine students of different schools participated in this competition. Information Technology KRIBHCO has implemented customized integrated application software package adopting modern IT infrastructure through Local Area Network (LAN) and Wide Area Network(WAN) for computerization of Financial 51 A n n u a l R e p o r t

55 Dr. J.S. Sarma, Secretary (Fertilizer) visits NFL Plant. Also seen in the picture is Shri G.S. Mangat, CMD, NFL. Accounting, Inventory Management, Personnel Information Management System, Payroll, Share Accounting System, Hospital Management System, Provident Fund Management System, Time Attendance Management System etc and are being used at Head office, Central Marketing Office, Plant, State Marketing Offices and Area offices using Relational Database Management System. Extensive need based IT-Training is imparted to employees to improve computer literacy. KRIBHCO has also developed web based farmers information support system, which provides information dissemination to farmers about social infrastructure, agricultural practices, weather conditions and land & soil type information of the region. Under E-Governance initiatives, electronic transfer of funds to vendors and employees, remittance of income tax, service tax, transactions are thru electronic system. The Website of KRIBHCO ( has been upgraded to provide access to outside agencies, vendors, employees and customers to address their grievance and seek redress by sending electronic mail directly to Senior Executives. Public Tenders are also published in website. 52 Department of Fertilizers, Ministry of Chemicals & Fertilizers

56 Chapter - 8 Gramin Vikas Trust (GVT) Gramin Vikas Trust (GVT), an independent legal entity established by KRIBHCO through Department of Fertilizers has been managing two projects i.e. Eastern India Rainfed Farming Project and Western India Rainfed Farming Project with the technical and financial support from Department of Fertilizers and Department for International Development (DFID) of the British Government. The aim of the projects is to initiate a process of widespread and sustainable renewable natural resources development using flexible, cost effective and participatory approaches to improve the livelihood of poor men and women in the Western and Eastern India through farming systems development and participatory research The Eastern India Rainfed Farming Project was operating since 1995 and ended on 31 st March The Western India Rainfed Farming Project Phase-II (WIRFP) is working in seven districts of three States i.e. M.P. (Jhabua, Dhar and Ratlam), Rajasthan (Banswara and Dungarpur) and Gujarat (Panchmahal and Dahod). The project is operating in 202 core and 497 dissemination villages. All activities of WIRFP (Phase-II) have been ceased off from 31 st March 2006 except Migrant Labour Support Programme (MLSP) where DFID has granted no cost extension of WIRFP till 31 st March Under participatory planning and community development, different activities have been taken up involving the community. More than 4500 PRA exercises have been conducted, 3892 Self Help Groups (SHG) have been formed who made a savings of Rs.273 lakh, out of which the group members are utilizing the fund of Rs lakh is diversifying their activities. Under crop programme, 2487 MTs of seed of different crops were distributed in the project villages to conduct Farmers Managed Participatory Trials (FAMPAR). More than ergonomically designed farm implements and tools have distributed among the farmers to reduce the drudgery as well as increasing the work efficiency compost pits have been constructed. About 57 lakh saplings of fuel, fodder and fruit trees have been planted in 4,988- hectare wasteland as well as homestead area. More than hectare land was treated by bunding, gully plugging, anicut etc. for conservation of soil and moisture. More than 2527 wells, 39 check dams were constructed/ renovated and 929 pump sets were supplied for irrigation. GVT has started a programme as Migrant Labour Support Programme (MLSP) for providing services to migrants, facilitation for accessing basis entitlements, enhancement of migrant capacities, recommendation for migrant labour policy reform etc. and also to reduce migration in WIRFP area. 27,690 migrants have registered their names in 79 Palayan Save Kendras (PSK) and more than 25,000 identity cards have been issued to Migrants by GVT and State Governments migrants attended training for development of various skills and 7496 migrants covered under the insurance. GVT is implementing collaborative crop research programme with the Agricultural Universities of respective States and International Funding Agencies. GVT has developed new crop varieties 53 A n n u a l R e p o r t

57 through collaborative research and released to rice three maize and one chick pea varieties suitable for Rainfed areas. Potash Promotion Project (Correcting the Imbalance) This project was conceptualized after a Memorandum of Understanding (MOU) entered into between M/s International Potash Company (IPC), Moscow and M/s Indian Potash Limited (IPL), New Delhi on 17 th February The project was operationlised on 1 st April 2003 for a period of three years and extended for another six months up to September The project comprises of a comprehensive programme for correcting the imbalance in fertilizer application in India by increasing the consumption of Potash to achieve N: K ratio of 4:1 in the long run and at least 6:1 at the end of the 3 years of project period. Under this project, the approach is to propagate the existing recommendations for increasing potash consumption and achieve Nitrogen: Potash consumption ratio of 4:1 in the long run While all States in India are to be covered in this period eventually, the first phase of implementation is as follows:- (a) East Zone: Orissa and West Bengal (b) West Zone: Madhya Pradesh, Chattisgarh, Gujarat and Maharashtra (c) North Zone: Uttar Pradesh, Haryana, Punjab and Himachal Pradesh. (d) South Zone: Kerala and Andhra Pradesh. The State of Rajasthan was also included during A view of NFL Stall at Kisan Mela. 54 Department of Fertilizers, Ministry of Chemicals & Fertilizers

58 8.2.4 Extension activities were further intensified in Sl. Activity No to effectively establish the need of applying K for enhancing crop production and thus farm income. Number of field activities organized under the project presented below:- Field demonstrations Field days/farmers meetings Crop seminars Intensive campaigns Hoardings Wall paintings ( 000 sq. ft.) Agri. Extension Officers Trainings Exhibitions April- Sept Besides field programme, mass media was also employed to create awareness about the balanced fertilizer application through enhancing the use of potassic fertilizers Technical information on the various aspects of potash in agriculture covering the topics such as rate of potash application, removal of potash by crops, potash fertility status, K deficiency symptoms on crops, method of K application etc. were published in the form of booklets, brochures, folders and posters. These were provided in the field in the language of the state. Result of crop demonstration were compiled, published and circulated for experience sharing. Agriculture magazines and periodicals were also used to create awareness about use of potash In all, four new mobile Audio-Visual Units were procured under the project, however, eleven mobile Audio-Visual units, including owned by IPL, were used all over the country to educate farmers through films and slides on balanced 9 4 fertilization, improved crop production and other related aspects A 30 second radio jingle was prepared and released from 36 stations of All India Radio. Similarly, 30 second TV jingle was also released in Krishi Darshan and other agricultural Programmes of Door Darshan from various stations Project has made definite impact in creating awareness about use of K, which can be noted from significant increase in K consumption from million tonnes during to million tonnes in N: K ratio also appreciably narrowed down to 5.2:1 in from the level of 6.9:1 in Integrated Nutrient Management To avoid discriminate use of fertilizers without scientific basis that could have an adverse impact on soil fertility, the Department of Agriculture & Cooperation is advocating to promote Integrated Nutrient Management (INM) by soil test based judicious and balanced use of chemicals fertilizers inducing micro nutrients in conjunction with organic manures, farm yard manure, green manure, compost, vermicompost, bio-fertilizers, etc. under Centrally Sponsored Scheme on Balanced And Integrated Use of Fertilizers. Under this scheme Government is promoting establishment of new facilities for soil testing laboratories and strengthening of existing soil testing laboratories along with training/orientation of soil testing laboratories staff. At present there are 609 soil testing laboratories out of which 487 are static and 122 are mobile laboratories. The total annual analyzing capacity of these laboratories is 6.72 million samples. However, still 208 districts in the country have no soil testing 55 A n n u a l R e p o r t

59 A view of Krishak Bharati Sewa Kendra (KRIBHCO). laboratory. Fertilizer companies are playing an active role in educating farmers through various programmes on the need to adopt soil testing and the application of balanced use all over the country. The national average consumption of fertilizers in terms of NPK was about kg/ ha during Fertilizer companies can play an important role in setting up more laboratories as the minimum annual requirement of soil testing in the country is millions samples. Stress may also be laid on establishing soil testing laboratories in the districts where there is no soil testing laboratory In pursuance of clause 20A of FCO (1985), Ministry of Agriculture, Department of Agriculture & Cooperation vide SO No.807 (E) dated permitted M/s National Fertilizers Limited, M/s Sri Ram Fertilizer Ltd. And M/s Indo Gulf Fertilizer Ltd. to manufacture Neem Coated Urea for a period of two years for commercials trial from the date of issue of notification. Also M/s Tata Chemicals and M/s Chambel Fertilizer Ltd. were also allowed to manufacturer Neem coated urea for commercial trial. All these manufacturers have been further permitted vided S.O. No.1258 (E) dated to manufacture Neem coated urea for a period of two years. ICAR has sanctioned an adhoc project entitled Standardization of nitrification in inhibitory principles in Neem Coated Urea at Indian Agricultural Research Institute, New Delhi. 56 Department of Fertilizers, Ministry of Chemicals & Fertilizers

60 Chapter - 9 E-Delivery for Fertilizer Management: Fertilizer Management On-line has been developed in close collaboration with National Informatics Centre to meet the national objective of making fertilizers available timely, adequately in good quality and at affordable price to the farmers by maintaining growth of fertilizer industry through subsidies/concessions. Proper planning and monitoring of various aspects like fertilizer production; quality control; distribution & movement; imports; sales & stocks; subsidies and concessions have been felt essential. In order to manage these effectively, following applications systems have provided support in decision making:- Web Based Fertilizer Distribution and Movement Information System: This system facilitates on-line data entry of despatches and sales of fertilizer products on fortnightly/ weekly basis by the fertilizer companies for monitoring and ensuring adequate & timely supply of fertilizers in the country. The system generates monthly movement orders for the companies to despatch the planned quantity to States/UTs. The system also maintains ECA plan, details of fertilizers imports and their allocation to different states. Web Based Fertilizer Production Monitoring System: This application system provides information support for planning and monitoring fertilizers production in the form of material as well as in nutrients. The system provides analysis in identifying micro and macro level factors responsible for deviations in production on plant basis in order to take corrective measures for enhancing fertilizers production in the country. The system covers various aspects viz., installed capacity; production targets; actual production; capacity utilization; requirement and consumption of raw materials/ intermediates for fertilizers plants. Web Based Fertilizer Concession Scheme Monitoring System: This computer based application system is the major integral process of Fertilizer Concession Scheme for timely release of Concessions payments to the fertilizers manufacturers and importers for the sales of indigenous/ imported phosphatic and potassic fertilizers in States/ UTs. The monthly claims at various stages i.e. On Account, Differential and Balance are processed using the software based on base/ final rates, registration for sales, bank guarantee, eligibility and sales certification. The computerized noting for approval and sanctions for payments to Pay and Accounts Office and various queries/ reports are generated for making and monitoring the concession payments easily. Web Based Fertilizer Import Management System: This system assists in monitoring the fertilizer Import Plan based on actual imports against targets, status of Free on Board (FOB) and Cost & Freight (C & F) import contracts for prilled urea on Govt. account under Essential Commodities Act demand and import of granular urea from Oman India Fertiliser Company (OMIFCO) under Urea Off-Take Agreement (UOTA). The system also maintains details of Department of Fertilizer s authorization to State Trading Enterprises (STEs)/ Handling & Marketing 57 A n n u a l R e p o r t

61 Agents for import of Urea during a scheduled period. Web Based Handling & Payments System for Fertilizer Imports: This application system provides decision support in selecting handling agents, fixation of handling rates and monitoring of expenditure. The system processes the claims from handling/ marketing agents towards making payments of inland freight and handling charges after adjusting the recovery of cost of cargo at Pool Issue Price (PIP) from handling/ marketing agencies, settlement of the port dues/icc/other charges and demurrage/despatch with handling/ marketing agencies. Web Based Import of Fertilizers Raw Material System: This application system provides decision support to monitor (i) Shipment and Despatch details of imported raw materials at discharge port, (ii) Raw Materials received by the plants and States from discharge Ports, (iii) fertilizer finished product despatched from plants to States, and (iv) Sales of fertilizers finished products/ raw materials to various States/ UTs in the country. Fertilizer Project Monitoring System: This system facilitates in monitoring monthly expenditure incurred through Internal and Extra- budgetary Resources (IEBR) and Budgetary Support on various Schemes/ Projects approved by DoF during Five Year Plans w.r.t. Plan outlays and Yearly outlays. Application System for Monitoring Energy Consumption Norms: This system is used to calculate the overall energy consumption in urea production by plants based on various inputs and their calorific values purchased from various sources and consumed in ammonia production. The system provides information support to monitor operational performance of the plants viz., daily reassessed capacity, average productive hours and daily production rate and capacity utilization of ammonia / urea. The system also maintains consumption and balance of ammonia for each quarter. Application System for Revision in Urea Concession Rates: This system facilitates in quarterly revision of concession rates for urea manufacturing units in each group under group concession scheme on account of escalation/ de-escalation in the variable cost of various inputs and utilities consumed in urea production. The software derives energy consumption proportions of various inputs w.r.t the total normative energy and computes input wise proportional costs. The total input energy cost, normative costs of various utilities and fixed cost are then summed to arrive at the rate of concession. The total financial impact is exercised w.r.t the previous rate of concession and despatched quantities. Fertilizer Equated Freight Fixation Information System: This system is used to fix the equated freight rate for each urea producing plant based on ECA allocation, despatches by rail/road, normative 58 Department of Fertilizers, Ministry of Chemicals & Fertilizers

62 rail/road distances, rail/road rates and secondary rates in various States/UTs for transporting urea from the plants to the consumption centers at block headquarters level. Fertilizer Subsidy Payment Information System: This application system is used for processing of monthly claims for timely subsidy payment to urea manufacturers for the despatches based on the subsidy rates, equated freight rates and sales tax rates notified by the Government. The system helps in monitoring various activities pertaining to the payment of subsidy by generating various periodic reports as well as query retrieval. Information & Communication Technology (ICT) Infrastructure For accessing the internet through RF link of NICNET, all the computers are connected through NIC s proxy server where built-in firewall capabilities are enabled. Web Site/ Web Applications Hosting: 9.3 The websites of DOF and fertilizer PSUs are hosted at Internet Data Center(IDC), NIC Hqrs. in a secured ICT environment to bring citizen interface and transparency in Government functioning. The web based applications for fertilizer production, movement, concessions payment; imports & handling are operational from IDC. The remote facility through secured Virtual Private Network (VPN) connection of NIC is being used in DoF and Fertilizer PSUs for instant updations in the websites. Intra-DOF Portal: 9.2 DoF s Intranet consisting of 270 nodes is spread 9.4 Intra DOF portal for employees of Department over Department s offices located in Shastri of Fertilizers is under development. The portal Bhawan, Udyog Bhawan, Janpath Bhawan and will provide a common information platform Sewa Bhawan in New Delhi areas. The intranet whereby, all office orders, circulars, critical newsnodes installed at Shastri Bhavan and Udyog updates, downloading of standard forms, Bhavan are secured as these are protected by telephone directory of DOF, electronic pay-slip firewall and antivirus software installed at NIC s generation, GPF details, leave details, income INOC (Integrated Network Operation Centre) in tax statement etc. and links to useful websites these buildings. As regards Sewa Bhavan, the will be available equally and instantaneously to INOC has been set up by NIC and will be all employees. This will virtually eliminate the operational soon. DOF s computers in Shastri requirement of personal visits to HR, Cash and Bhavan and Udyog Bhavan are configured with Administration Sections. internal IP addresses and hence the information stored on DOF s computers is secured from E-Governance: computers outside DOF s intranet. 9.5 As per the guidelines of Department of Administrative Reforms & Public Grievances The clients systems (240 nos.) in the Department (DARPG), Department of Fertilizers has taken have been provided upto LDC level with internet various measures to bring e-governance: connectivity to make wider use of IT services. 59 A n n u a l R e p o r t

63 service is being extensively used by the officials of Department of Fertilizers for information exchange with fertilizer companies and other agencies,. Office Automation Packages : Composite Payroll System for Central Government Offices, Web based File Tracking System, Application Monitoring System under RTI Act, Inventory Management System, Foreign Visit Tracking System, Board Level Appointment System and PGRAMS (Public Grievances Software Package) developed by NIC are operational in the Department of Fertilizers. Word Processing in Hindi is available for use on all the intranet nodes in the Department. 60 Department of Fertilizers, Ministry of Chemicals & Fertilizers

64 Chapter The ambit of the supervisory, vigilance activities of the Department extends not only to the Department but also to the supervision of the vigilance activities of the nine PSUs and the one multi state cooperative society. The departmental vigilance set up is headed by the Joint Secretary (Administration and Vigilance) who is the Chief Vigilance Officer designate of the Department assisted by Director (Vigilance), Under Secretary (Vigilance) and other vigilance staff. The Department supervises the vigilance activities in the PSUs and the Multi State Cooperative under its administrative control, within the framework provided by the Central Vigilance Commission. With the thrust on pre-emptive rather than remedial vigilance, pro-active role is played by the Department in ensuring not only the prompt disposal of vigilance cases but also in framing preventive guidelines based on which the occurrence of vigilance cases can be minimized A constant effort is made by the Department to streamline and simplify the procedure prevalent in the Public Sector Fertilizer Companies in order to make the working of these organisations more transparent thereby reducing the chances of corruption. By virtue of being the administrative Ministry for the fertilizer sector, the Department is entrusted with the duty of being the watch dog of the fertilizer PSUs and this is achieved by an energetic pursuance of the vigilance activities in these units coupled with frequent inter active sessions held with the Chief Vigilance Officers of these Companies.As per the framework provided by the CVC, a meeting of the Chief Vigilance Officers of the Fertilizer PSUs chaired by Secretary (F) was held on The meeting was also attended by CVO of the Department. During the course of the meeting an appraisal of the working/functioning and achievements of the CVOs was done along with initiatives taken by CVOs towards pro-active vigilance environment of the PSEs. Vigilance Activities during The number of pending disciplinary/vigilance cases in the PSUs was 27 as on 30 th Sept, 2006 as compared to 29 as on 31 st Oct, The Department has been regularly monitoring the pending complaints/investigations by having close inter action with the concerned CVOs of PSUs and a constant effort is being made to ensure the disposal of disciplinary proceedings within the time frame stipulated by the Central Vigilance Commission. Vigilance week celebrations The Vigilance Week was celebrated during the 6 th to 10 th of November A number of banners and posters were displayed in the Department to create vigilance awareness among the staff. A pledge was administered to the staff by Secretary (Fertilizers) and an essay competition on the topic Role of Vigilance in fighting corruption was held. There was active and enthusiastic participation from the officers and employees of the Department in this Essay Competition. The Vigilance week was also celebrated with great gusto in the fertilizers PSUs, including KRIBHCO and various competitions like slogan writing, Essay, Debate, Quiz, Workshops etc. were held. Surveillance and detection Agreed list of public servants as well as Public Servants of Doubtful Integrity are complete. Further, with a view to check corruption in the 61 A n n u a l R e p o r t

65 Department, the Rotational Transfer of Staff as per the norms/guidelines issued by CVC was implemented. Accordingly, a number of officials/ officers of the Department who were looking after sensitive nature of work on a particular seat for more than five years were transferred. Punitive action Forty complaints were received from various sources against the officials of PSUs, which were got investigated/examined and appropriate action was taken The Department had recommended two cases to the CBI for registration of regular case during the year against the officials of a PSU. Investigations in both the cases have been completed by the CBI and further action is being taken. 62 Department of Fertilizers, Ministry of Chemicals & Fertilizers

66 Chapter The Right to Information Act, 2005 (RTI) was assented by the President of India on and notified on Some of the Sections of the Act, namely, Sections 4(1), 5(1) &(2),12,13,15,16,24,27 & 28 relating to obligations of Public Authorities for maintenance and computerization of record/information, designation of Public Information Officers(CPIO), Constitution of Central Information Commission and State information Commission, exclusion of certain organization etc. came into force immediately. The remaining provision of the RTI Act came into force on the 120 th day of its enactment i.e. 12 th October In compliance of the RTI Act the Department has designated CPIOs and CAPIO. The respective PSUs under the administrative control of the Department have been directed to ensure compliance of the RTI Act. Some of the important steps taken by the Department in compliance of the Act are:- Created a separate link for RTI Act on its website placing a Handbook on RTI giving general information about the Department required under the Act. Orders designating PIOs, with required details, placed on website, which are up dated from time to time. Counter opened at Public Information Centre of DoF at Shastri Bhavan for applications as well as prescribed fee under RTI. Appointment of Nodal Officer intimated to Department of Post enabling providing of services by that Department as CAPIOs across the country. The Department has started registration of Requests and Appeals under the RTI Act on the Management Information System (RTI RAMIS) software available on the Web-Site of CIC During , 07 applications and 1 appeal were received of which 6 applications and 1 appeal were disposed of during the said year. Between April, 2006 to February, applications and 7 appeals have been received. Out of these 39 applications and 4 appeals have been disposed off. 63 A n n u a l R e p o r t

67 Chapter Department of Fertilizers continued its efforts towards greater use of Hindi in official work during keeping in view the Annual Programme issued by the Department of Official Language, Ministry of Home Affairs for implementation of the Official language policy of the Union. The work pertaining to the progressive use of Hindi in the Department is under the administrative control of Joint Secretary (Administration), assisted by a Deputy Director (OL). The Hindi Section consists of one Assistant Director (OL), a Senior Translator, three Junior Translators, One Assistant and two Lower Division Clerks All the 249 Computers (PCs) in the Department are equipped with bilingual facility. Adequate reading material in Hindi has been made available in the library of the Ministry of Chemicals & Fertilizers. Efforts are being made to promote the use of Hindi in the correspondence. Except one employee, all officers/employees of the Department are having working knowledge of Hindi. Similarly, all the stenographers and typists except one typist and one stenographer are trained in Hindi stenography and Hindi typing, respectively. Besides, a number of measures have been taken for the promotion of progressive use of Hindi in the Department, its attached office of FICC, PSU s and the multi-cooperative society namely KRIBHCO, under its administrative control. Details of these measures are summarized below:- 64 Shri B.D. Sinha, Managing Director, KRIBHCO is receiving award from Shri Ram Vilas Paswan, Hon ble Union Minister for Fertilizer & Chemicals and Steel. Department of Fertilizers, Ministry of Chemicals & Fertilizers