1. Hindustan Fertilizer Corporation Limited (HFCL) emerged as a separate company following reorganization of the erstwhile FCIL and NFL group of companies in early 1978. The newly formed Corporation under its ambit of control got the operating Units at Durgapur (W. Bengal), Barauni (Bihar) and Namrup. A fertilizer –cum – chemical project at Haldia (W. Bengal) was also annexed to HFCL. Namrup Unit has been demerged from HFCL and formed into a new Company, namely, Brahmaputra Valley Fertilizer Corporation Limited (BVFCL) w.e.f. 01.04.2002.
2. The Govt. of India declared closure of plants HFCL in September, 2002 and majority of its employees were released under VSS. HFCL, at present has three closed plants, one each at Barauni in Bihar and Durgapur and Haldia in West Bengal. Presently, HFCL has only 1 regular employee on roll.
3. The Company was declared sick and was referred to BIFR in the year 1992. In view of the continuing losses of the company, stemming from technical and financial viability of operations, the Government decided to close down HFCL Plants in September 2002. Consequently, a Voluntary Separation Scheme (VSS) was offered to all its employees. All the employees, who opted for VSS have since been released, except 1 employee who is engaged in discharging statutory obligations, including safety & security of properties/assets of the various units of the Company. BIFR bench in its order dated 12.12.2001 confirmed the winding up of HFCL. HFCL made an appeal to AAIFR. The Hon’ble AAIFR vide its order dated 29.11.2002 set aside the Board’s order dated 12.12.2001 and remanded the case to the Board.
4. Considering the shortage of domestic production of urea for meeting the growing demand in the country and availability of well-developed infrastructure in various closed units of the Company, the Cabinet decided in April 2007 to consider the feasibility of reviving the fertilizer Units of HFCL. Subsequently, Cabinet constituted an Empowered Committee of Secretaries (ECOS) on 30.10.2008 to consider various options of revival and further approved ‘in principle’ to consider waiver of GoI Loan & Interest, in case of availability of a viable fully tied up revival proposal. After detailed study and recommendations for a revival option, ECOS on 24.8.2009 selected a suitable Revival Model and recommended the same for seeking the approval of GoI. The ECOS recommended revival of three units of HFCL through bidding route.
5. The Cabinet Committee on Economic Affairs (CCEA) in August, 2011 approved recommendations of the ECOS with the stipulation that Board for Industrial and Financial Restructuring (BIFR) proceedings be expedited. The CCEA also approved the Draft Rehabilitation Scheme (DRS) for revival of HFCL. DRS was placed before BIFR for its approval. BIFR held various hearings where they directed the Government and the company to sort out pending issues with Govt. of West Bengal and to initiate process of formulation of Cabinet Note after arriving at settlement of land with Govt. of West Bengal.
6. CCEA while considering the proposal for revival of FCIL units in its meeting held on 9.5.2013 ‘Inter-alia’ approved that revival of HFCL Units will be taken up once the revival of FCIL units is on track.
7. Considering the above developments, Cabinet in its meeting held on 25.05.2016 considered Financial Restructuring of HFCL and transfer of 56 acres of Ash Dyke land of Barauni Unit to Bihar State Power Generation Company Limited (BSPGCL) to settle the dues of HFCL for faster revival of Barauni Unit and approved waiver of GoI loans of Rs. 1916.14 crores as on 31.03.2015 and the outstanding interest on GoI loan as on that date (the interest as on 31.03.2015 is Rs. 7163.35 crores).
On 12.7.2016, BIFR deregistered HFCL from its purview, as the net worth of HFCL turned positive after the financial restructuring approved by the Cabinet on 25.5.2016.
On 13.7.2016, Cabinet approved revival of Barauni Unit of HFCL along witth Sindri & Gorakhpur Units of FCIL on ‘nomination basis’ by a Joint Venture of CIL, NTPC, IOCL, FCIL & HFCL to set up a gas based Ammonia-Urea plant of 1.27 Million Metric Tons Per Annum.
Accordingly, Barauni Unit of HFCL is being revived by M/s. Hindustan Urvarak & Rasayan Limited (HURL), a JV of CIL, NTPC, IOCL, FCIL & HFCL. HURL has started construction of plant at Barauni Project. Concession Agreements as well as Lease Deeds have been signed between HFCL & HURL for Barauni Project. Substitution Agreement for Barauni has been signed amongst HFCL, HURL & Lenders’ Representative. Construction of the project is in full swing.