CALLING FORMER UNION CARBIDE CHIEF MR. ANDERSON AS CRIMINAL IS INCORRECT

Mr. Warren M. Anderson , former Chairman of Union Carbide Corporation was in charge when the toxic gas in the pesticide plant of Union Carbide at Bhopal in India  leaked out in 1984. This accident resulted in death of hundreds of persons and  is considered as one of the worst industrial accidents in the world.  Mr. Anderson died unsung and unheard on September 29,2014 in USA at the age of 92.

Mr.. Anderson  visited the site of accident at Bhopal in India  from USA  within  four days from the date of accident  and he was immediately arrested in India . Later on, he was released on bail and was allowed to leave India.   Union Carbide  paid 470 million USD to Government of India   to compensate the victims who suffered in the accident. The case took place in USA for prolonged period .  However,  the environmental activists in India and the Government of India were not satisfied with the compensation  amount   paid. The government of India wanted to extradite Mr. Anderson and went to the extent of calling  him a fugitive . Political parties, activists and Indian media liberally heaped abuse on Mr. Anderson and called him as absconder, criminal and murderer.

Now that Mr. Anderson has died at the ripe age after spending several years almost in isolation in USA, it is time to introspect  as to whether Mr. Anderson sinned or was sinned against. Perhaps, history will be more kind to him than the government of India and Indian media.

The accident that took place in Bhopal was an extremely sad event, which caused  death of 3787 persons  as per the statistics of Government of India. Most of the persons who died belonged to lower income group and many others suffered heavily and died later on due to the after effects of inhaling  toxic gas.  While this was an extremely disturbing event , the question is as to whether it would be appropriate  to call Mr. Anderson as murderer and criminal  for this accident.

It would be justified  to call a person as criminal or murderer if he had carried out the heinous act wilfully and deliberately. This was not the case in the case of Mr. Anderson.   While , no doubt, Mr. Anderson was the Chief of Union Carbide Corporation at the time of accident, the accident was not due to him but in spite of him. He was staying in USA at the time of accident   and the plant was operated  not by Mr. Anderson  personally but by the executives in India who were  Indians.  The detailed enquiry later on revealed that it was an accident,  perhaps caused by inadequate maintenance management and poor shop floor practices.

Hundreds of accidents have taken place in the world in various areas and all such accidents take place due to lack of care and inadequate safety precautions..  No accidents take place anywhere without reasons.  India is no exception to this. As a matter of fact, the number of industrial accidents that take place in countries like India and China are far more than the accidents taking place in other countries.  The coal mine accidents in China are too many and too frequent resulting in death of many persons. Such coal mine accidents have taken place in India also,  apart from rail accidents and accidents in the fireworks factories in states like Tamil Nadu etc.,  which have also resulted in the death of workers , most of whom are poor and belong  to deprived section of society.  While enquiries take place after such accidents and causes are fixed, it is not the practice to call the chief executive  of these establishments as criminals. Why make an exception for Mr. Anderson ?

It is not the intention to say that Union Carbide was not guilty .The  fact was that the company accepted the responsibility and paid compensation,  though it was not to the satisfaction of government of India  and activists in India.  The quantity of compensation was a matter  to be settled in courts. India is unhappy that Mr. Anderson could not be extradited to face trial in India. The fact was that the US government refused to entertain such request  for extradition as per the US law.

While  government of India and the activists  in India are entitled  to take the view  that Union Carbide (now Dow Chemical ) has been unfair to the victims and did not act responsibly , it would be incorrect to hold Mr. Anderson personally responsible.  Mr. Anderson as an individual was different from Union Carbide . After all, in 1986 at the age of 65, Mr. Anderson retired from Union  Carbide and had nothing to do with the company after his retirement.

The emphasis  stressed in  this article is only to  disapprove the practice of Indian government, Indian media and activists to call Mr. Anderson as criminal . Mr. Anderson  must have spent his 27 years of life after retirement in sorrow , regret and anguish for the accident that killed innocent people while he was in charge of Union Carbide along with thousands of others in the company all over the world and several  colleagues  in India.

OFF SHORE WIND POWER PROJECT IN GUJARAT – WHY NOT IN TAMIL NADU TOO ?

It is gratifying to note that the government of India has announced signing of an initial agreement for setting up joint venture firm for setting up off shore wind power project in Gujarat. This is a very significant move of the government of India with far reaching implications for the better. But, it is surprising that such off shore wind power project has not been considered for Tamil Nadu.

With the domestic production of coal  and natural gas falling short of national requirements and India now emerging  as large importer of coal, crude oil and natural gas in the world, the fuel source for power projects has become a matter of great concern. Several power projects are now stranded due to want of natural gas and many power units are operating below capacity due to the coal stock position in the plant premises remaining at critical level. The price of such  fuel  are also subjected to frequent fluctuations creating an element of uncertainty in the economics of operating the thermal power projects.

Under the circumstances, it is now well recognised that India has to considerably use renewable energy as source of power generation. Government  of India has fixed the target as around 20,000 MW of solar power by 2022 and considering the present progress in the solar power front, it is extremely doubtful as to whether such target would be achieved.

In such scenario, off shore wind power project represents an ideal and appropriate option for India. India is blessed with long coastal line of around 7500 KM covering several states, providing excellent opportunity for setting up off shore power projects.

Europe has already shown the way  by building several off shore wind power projects with the present capacity of around 5500 MW already in operation. European Union has set the target of constructing off shore wind power projects of capacity one lakh megawatt in the next ten years and is forging ahead with this plan. The technology for the off shore  power project is now well established and  now only need to be appropriately schemed in tune with the Indian coastal conditions.

Off shore wind power projects offer several advantages compared to the on shore wind power projects. Apart from the fact that the wind speed in off shore is much higher , the availability of wind throughout the year is also assured. As against this, on shore wind power projects operate at optimum capacity levels hardly for four months in a year. The cost of off shore wind power project is likely to be one and half times more than that of on shore wind power project of same capacity . However, in view of the better wind speed  and wind availability, the economics of off shore wind power project would be better.

In Gujarat state , government of India has now announced  demonstration off shore wind power project of capacity of around 100 MW. While  the concept of installing demonstration project is appropriate in view of lack of similar project in India so far, the government of India ought to have announced such demonstration project in Tamil Nadu also, which has appropriate coastal areas such as  in Tuticorin.  Since there may be variable coastal conditions in different locations, it is necessary to set up such demonstration plants in Tamil Nadu also  to establish the design and operating parameters and set up larger capacity projects later on.

As a matter of fact, today there is greater need for off shore wind power projects in Tamil Nadu, which is  passing through severe power shortage scenario compared to Gujarat state. There is little time to lose and Tamil Nadu  should not be made to wait till the completion and commissioning of the demonstration project in Gujarat , for taking up off shore wind power project in the state.

CLEAN INDIA CAMPAIGN NEED INTEGRATED APPROACH

Till now, the country has been largely focussing on garlanding Mahatma Gandhi’s statue and singing bhajans on Gandhi Jayanthi Day throughout the country. By launching clean India campaign on Gandhi Jayanthi Day, Mr. Narendra Modi has certainly given a new purpose for this national  celebration.  However, declaring an objective and goal must be matched by  strategic action plans to achieve the end results  in tune with the ground realities.  Apart from urging the country men to work atleast two hours a week for the cleaning campaign, Mr. Modi has not taken the country men  into confidence yet as to how he would execute this national campaign to lead to the logical end.

Many people, who  would strive to keep their households , office premises and surroundings clean by carefully collecting the wastes and dumping it into the  bins provided nearby by the civic authorities , would wonder as to how such waste material would ultimately be handled . The problem confronting the country today is the lack of adequate waste treatment and disposal facilities in an optimum manner. In the absence of such facilities, the present situation of  the waste collected in one area being  transported  to some centralised dump yard, that remain there or being burnt in crude manner would continue , causing pollution around. The immediate case study is the Perungudi and Kodungaiyur  dump yards in Chennai  city , where one can see the condition of the dumped waste, emanating  nauseating smell around and remaining as  breeding ground for mosquitoes, apart from being an eyesore.

Even while launching this clean India campaign, the  government of India ought to have asked the state governments and local municipal bodies all over India about their plans for treating the municipal solid waste and sludge in optimum manner and the investments required and the time schedules to implement the scheme. While some isolated schemes have been launched in the country, there is no indication that such steps have been taken in all nooks and corners of India. In such circumstances, there is the threat of the clean India campaign ultimately proving to be a non starter and such situation should be avoided.

There are several technologies available for treating the municipal solid waste materials and sludge in an eco friendly manner and even with an element of profitability.

Of course,  the obvious method is to use the combustible solid waste material  as fuel for power generation in small power plants located near the centralised dump yards. Such schemes have been under discussion by Chennai  Corporation  for many years now.

The solid waste materials can also be subjected to composting and fermentation for generation of biomass, which can be used as organic manure for agricultural operations.

The fermentation of solid waste materials can lead to the production of important and value added chemicals . For example, plants are now in operation abroad for producing  synthetic gas mainly consisting of carbon monoxide and hydrogen, by municipal solid waste sludge gasification process and the synthesis gas in turn is converted into methanol. India imports  around one million tonne of methanol per annum and the municipal solid sludge can be an excellent source for the production  of methanol.

Using sewage water, algae crop can be cultivated and algae is an excellent source for generation of bio fuel as well as  methane gas for power generation and ethyl alcohol, by subjecting algae bio mass to  anaeorobic digestion and  fermentation.

There are several other possibilities such as recycling of the waste materials to useful products. For example, the plastic waste materials can be recycled   by converting  them into plastic  granules for reuse.

Converting sewage water by treating them into useful water is a well proven technology and already plants are in operation at Manali in Chennai and other cities.

Technologies for treatment of municipal solid waste are well developed around the world and what is needed is proper systems for collecting the wastes , segregating them and treating them usefully in tune with the local conditions in different places.

Asking the country men to involve themselves in cleaning everywhere without providing facilities for treating the waste materials or converting  them into useful products may be viewed as similar  to the act of putting the cart before the horse.

Certainly, government of India would  be aware of the various possibilities. The clean India campaign would be more assured of success if the government had taken an integrated approach, without giving an impression that it is launching this  campaign in a hurry.

HOW MANY MORE LNG TERMINALS?

Indian Oil Corporation  (IOC), plans to set up another liquefied natural gas (LNG) terminal on the country’s eastern coast. IOC said in its annual report 2014-15 that “to meet the gas requirement of upcoming Paradeep refinery and other potential customers, setting up  LNG terminal is under consideration at eastern coast in near future”.

In eastern coast, Petronet LNG has also announced that Petronet LNG Ltd. and Gangavaram port signed a firm and binding agreement for developing a land based LNG terminal at Gangavaram Port, Andhra Pradesh with capacity of 5 million metric tonne per annum.

IOC is also currently setting up its 5  million metric tonne per annum LNG terminal at Ennore near Chennai for import, storage and regasification of LNG. The terminal, which is being developed at cost of around Rs 4,500 crore, is targeted to be completed by 2015-16. However, the project is likely to be delayed further, considering the present pace of progress.

Proposed LNG terminal at Mangalore

Oil & Natural Gas Corporation  (ONGC) and its partners Mitsui of Japan and Bharat Petroleum Corporation Ltd ( BPCL )have signed an agreement to conduct feasibility study for  setting up 500-750 million US$ LNG import terminal at Mangalore. Of initial capacity of 2-3 million metric tone per annum, which can be expanded to 5 million metric tonne per annum later.

The following is the LNG terminal capacity for the projects that are operating or firmly under implementation. The above new proposed projects at Gangavaram,  Mangalore  and the  proposed project of IOC in east coast are  in the preliminary stage.

LNG terminal capacity (In MMSCMD)

LNG terminal 2012-13 2013-14 2014-15 2015-16 2016-17
Dahej 10 12.5 12.5 15 15
HLPL Hazira 3.6 5 5 7.50 10
Dabhol 1.2 5 5 5 5
Kochi 5 5 5 5 5
Ennore 0 0 0 0 0
Mundra 0 0 0 5 5
East Coast(Gangavaram) - - - - 5
Total capacity (MMTPA) 19.80 27.50 27.50 37.5 50

 

Kochi LNG terminal

LNG terminal  built at Kochi in Kerala, which was  commissioned after several years of delay, is now facing distress scenario.

Around Rs.4000 crores  was spent on building this LNG terminal. Due to lack of pipeline connectivity, the terminal’s capacity utilisation is merely 1.4 percent.  Only 0.66 trillion British thermal units of natural gas is  regasified and was sold from the terminal during the first quarter of fiscal 2014-15. The gas was sold to the Kochi refinery.

The terminal is now operating at very low capacity utilization level, due to delay in implementation of pipeline project  that would take the gas to Kerala ,Tamil Nadu and Karnataka. The Tamil Nadu  government appears to be  remaining unconcerned about the delay in the pipeline project in the state  due to agitation by farmers which would result in the  loss of investment opportunities for setting up several gas based projects, that may involve in investment of more than Rs.15000 crores and providing significant economic benefits for the region. No worthwhile efforts have been made to find amicable solution to the project for laying pipeline in Tamil Nadu.

Now, the helpless management of the Kochi LNG terminal is planning to rent out the terminal  as a storage  facility for international LNG players!

How many more LNG terminals?

India is becoming increasingly dependent on import of natural gas for its requirement and LNG terminals are being planned or built with the objective of facilitating the import of natural gas to meet  India’s future needs.

However, the fact is that no clear cut plans have been evolved as to what extent the import of natural gas  should increase in India in future and whether so many LNG terminals would be necessary .

Extensive and increasing dependence on natural gas import may expose Indian  consuming sector to uncertain situations in future, from the point of view of availability, cost and delivered price. Such huge import of natural gas may also disturb the current account financial scenario in the country.

New LNG terminal  projects are being announced by the companies , without their decisions being coordinated and guided by Government of India.

Since LNG terminals are highly capital intensive projects  and take long years for implementation, investment in LNG terminals should be planned with clarity and based on India’s long term natural gas import strategies. It appears that no such strategies exist at present.

PRECARIOUS COAL SCENARIO HITTING INDIAN POWER PLANTS ; LOOK AT THE OFF SHORE WIND POWER OPTIONS

It is highly disturbing to know that around 25% of power  capacities in Gujarat  (a reasonably well administered state ) have to be shut in recent days  due to non availability of coal. This is more than a quarter of the state’s total installed  capacity of 18,510 MW  . Such power shortage constitute around 7563  MW ,which is an alarming level.

It is well known that most of the power projects in India have been operating with low coal inventory and sometimes as low as  2 to 3 days of the requirement. Such conditions  have forced many power plants to operate at low capacity utilisation level to ensure that the  thermal plants will be  kept running until fresh arrival of coal.

Though India has  large reserves of coal deposits, India  is importing around   110 million tonne of coal every year and the import level is likely to go up in the coming years , since there is no feasibility of substantially increasing the production of coal in the next one or two years. The international price of coal is also increasing due to the robust global demand.

The Union Power Minister has correctly observed that the only solution for the problem is to open more coal mines  and improve efficiency in the existing ones  as early as possible. This calls for  significant improvement in  managerial  and technological  efficiency  in Coal India .

Dubious allotment of coal blocks

While the earlier Manmohan  Singh government anticipated this problem  of impending coal shortage  and took steps to award number of new coal blocks to expedite opening of new mines and increase coal production, the entire plans came to nought as the procedure for coal allocation was not done in a transparent manner and many undeserving organisations and individuals secured allotment of coal blocks due to political connections , involving  corruption.  Many of the coal block allotees did not even commence the work  and probably were  scheming to mint money by selling the coal block itself  at high margins by circumventing the law.

To this extent, Manmohan  Singh should accept responsibility for the present precarious coal scenario faced by the country. Now, there is no doubt that Narendra Modi government is facing an extremely critical coal scenario and it remains to be seen as to how it would tackle this grim situation.

To add to the uncertainty, Supreme Court has now observed that allotment of several coal blocks in the past  were illegal.

Poor capacity utilisation of power plants :

During the last several  years, there has been emphasis in the country on building power capacity . However, there have not been equal emphasis on operating the existing power plants at optimum capacity utilisation level and avoiding loss of power in transmission etc. Apart from the  coal shortage as a reason , the power production in the past have also been curtailed due to frequent breakdowns in the power plants due to poor maintenance practices.

The power ministry should immediately set up a task force to study the state of power plants in India and assess their overall performance efficiency in the last two or three years in comparison with the established international standards. Such careful study would reveal many disturbing facts with regard to operating efficiency and perhaps enable the government to learn one or two lessons to work out the future course of action.

Options of off shore wind power and algae bio fuel :

While striving to  sort out the complex issues due to lack of availability of coal stock for running power plants, Narendra Modi government should work very fast in utilising the potentials of the non conventional  energy source. While the government is talking about the  importance of solar power though the pace of progress at ground level  is still inadequate, it is sad that it is ignoring the huge potentials of off shore wind power projects in India. Europe has taken a big lead in this field  and India can emulate the initiatives of Europe, particularly since India has long coastal belt. While the developed countries are working at feverish pitch to produce algae bio fuel that can be used for power generation, India’s efforts in this direction are very poor.

It is good that the departments of coal , power and renewable energy have been brought under one ministry. The minister has a great opportunity to take an integrated look at the option of coal vis a vis  renewable energy and forge ahead  to fulfil the needs of the time.

INDIAN OIL CORPORATION CANCELS ACETIC ACID PROJECT; UNWISE AND PANICKY MOVE

In the last few years, India has emerged as one of the large importers of acetic acid in the world. Indian import of acetic acid has nearly doubled during the last five years. In 2014-2015 import of acetic acid is likely to be in the region of 0.7 million metric tonne.

 Import of acetic acid in India

Year

(From April to March)

Quantity in tonnes
2009-2010 389650
2010-2011 466096
2011-2012 570040
2012-2013 646737
2013-2014 664796

All ethyl alcohol based acetic acid plants were closed in the last few years due to non availability of ethyl alcohol, which is largely diverted for human drinking purpose. The price of ethyl alcohol has also gone up, making it uneconomical  for ethyl alcohol based acetic acid plants.

At present, GNFC is the only unit producing acetic acid in the country by methanol route.GNFC is operating the plant at high capacity utilization level.

Obviously, the above situation calls for immediate step to build acetic acid project based  on methanol route.

 Indian Oil cancels plan  for acetic acid  project

Indian Oil Corp. and BP have abandoned plans for an acetic acid joint venture in India, citing high capital costs.

The proposed 50-50 jv would have built a one million metric tonne per year acetic acid plant at Vadodara, Gujarat State, based on BP’s Cativa XL technology.

The project also would have included gasification facilities, consuming petroleum coke supplied by IOC, to produce synthesis gas. Start-up had been originally scheduled for 2015 but was postponed until 2017.

 Unwise and panicky move

Acetic acid project is highly relevant to India’s industrial and economic growth pattern. Strong case exists to build large capacity for acetic acid in India. Decision of Indian Oil Corporation to cancel the acetic acid project is surprising. Certainly the decision is not in India’s interest.

While India does not have enough methanol production , methanol can be imported to produce acetic acid, in view of the comfortable global supply scenario.

The project will have good economics under well thought out configuration. If the joint venture with BP would not be possible due to any reason such as the demand made by BP to be a joint venture partner, then the alternate options should have been examined.

In such circumstances, one tends to think that the decision of Indian Oil Corporation to cancel the acetic acid joint venture is unwise and a panicky move. It should reconsider it’s decision.

UNRELATED DIVERSIFICATION PLANS OF ONGC, INDIA

ONGC’s proposed unrelated diversification plans

It is reported that ONGC is looking for joint venture partners to set up 6000 MW of solar and wind energy projects  It is said that the joint venture would invest Rs.3750 crores and would target to set up atleast 2000 MW of capacity by 2020.  In this, 1500 MW would be wind power while 500 MW would be solar power capacity.

Unmet targets of ONGC

ONGC,  a Government of India undertaking,  has the task of working on gas exploration projects and increase the domestic production of natural gas.ONGC  has huge task before it, as India is highly deficient in natural gas production. Present import of natural gas in the country is around 13 billion cubic metre which is likely to go up substantially, if adequate gas exploration efforts would not be stepped up to increase the production of natural gas in India.

ONGC has still a long way to go to achieve its objectives and meet the needs and expectations of the country. It’s gas exploration efforts have to be increased to a very great extent.

A June 2013 report by Barclays Equity Research notes that ONGC has missed production targets for the last five years due to endemic project delays with its 40 large projects costing $14 billion running 22 months late on an average. The report adds that.  further delays are expected; for example, the 13 projects that ONGC expects to come on stream by end FY14.

Will ONGC bite more than what it can chew?

Under such circumstances, it is not clear as to why ONGC want to diversify  in setting up solar and wind power projects. While, no doubt, solar and wind power projects are of vital national importance, the question is whether ONGC should get into such areas, in which it has no particular specialization, particularly when its main task of stepping up natural gas production itself remains considerably incomplete.

While there is no logic for indulging in such unrelated activities, ONGC will bite more than what it can chew by taking up such projects and divert its management time and attention.

Coal India’s unrelated ambition

A few weeks back, we heard about Coal India , which is involved in mining of coal, planning to enter into business of fertilizers and chemicals using coal gas. Similar to ONGC, Coal India is also planning for unrelated diversification, while its objectives of stepping up production of coal in the country remains considerably unfulfilled  causing huge import of coal, inspite of the availability of large reserves  of coal in the country.

India imported over 80 million metric tonne of coal last fiscal. Nearly 50 million metric tonne of the imports went to meet shortfall in supplies from state run monopoly Coal India, which produced less than the target.

Need for focus on core areas of activities

Diversification of activities by large public sector companies involved in vital fields should be stopped forthwith and they should be told firmly by Government of India to focus on core areas of activities for which they have been set up.

Government of India should immediately ask ONGC  and Coal India not to venture into new and uncharted areas, which would  make them pay divided attention to the much needed efforts in the  core areas of their functions.

Avoidable gas pipeline explosion in Andhra Pradesh , India

The  natural gas pipeline explosion  in Andhra Pradesh on 27th June ,2014  is an unfortunate occurrence . Many other accidents that have happened in India  in recent times including the repeated accidents in the match / fire works factories in Virudhunagar, Sivakasi region in Tamil Nadu are all avoidable . Certainly , such accidents indicate that the top administration in the establishments have  not  been adequately alert and have  not enforced  efficiency in adequate measure to ensure that proper safety measures would be adhered to and implemented.

While it is a fact that this is not the first time that explosion in natural gas pipelines have taken place in the world , every enquiry after the incident across the world have pointed out to deficiency in management of maintenance practices and lack of care on the part of the persons at the shop floor who handle the equipment immediately.

In the case of the gas pipeline,  there are well established procedures to ensure safety in the pipeline such as periodical hydro static  testing of the piping system, use of smart pigs technology (equipped with rhobotic cameras and sensors to check pipe thickness and welds).  If such  testing procedures and safety practices are scrupulously followed , such accidents would  become very rare.

Obviously,  GAIL management must accept responsibility for the accident which resulted in death of several innocent persons and it should accept blame ,  without pointing fingers  at  some other target. Such explanations  given by some quarters  , as per the press report,  that fire was caused by some one lighting a stove are ridiculous.

While , no doubt the government has ordered an enquiry , many enquiries conducted in the past have not resulted in any improvement. The fact is that those who have failed to perform duties  at adequate standards at various levels have not been taken to task.

In the wake of  this natural gas pipeline explosion , some  NGOs  have now started saying that gas pipeline project in Tamil Nadu should be given up. It is necessary to understand clearly  that such accidents occur not due to engineering and technology issues but only due to lack of care in enforcing the safety guidelines.

The public should not get confused with an impression that natural gas is harmful and gas transportation should be given up , which would amount to counter productive reaction.

ALL INDIA ESSAY COMPETITION FOR COLLEGE STUDENTS ON “NATURAL GAS PRICE REVISION BY GOVERNMENT OF INDIA – IS IT NECESSARY OR AVOIDABLE?”

Nandini Chemical Journal , a renowned  online monthly journal dedicated to the cause of chemical and allied industries  and published from Chennai by a team of chemical engineers, announces  All India Essay Competition for  college students on “Natural gas price revision by Government of India – Is it necessary or avoidable?”.

Objective

Government of India notified price revision of  natural gas with effect from  1st May 2014, based on the recommendation of  the Rangarajan Panel. There are divergent  views in the country, as to whether it would be appropriate to increase the price of natural gas or whether it would be a counter productive move.

This essay competition is organized by Nandini Chemical Journal, to provide an opportunity to the college students all over India to introspect on this subject of great national importance and provide their views.   The views of the students would be forwarded to the Prime Minister of India.

The essay should consist of maximum of 2000 words and should be written in English.

Eligibility:-

All students studying   in Indian universities  at under graduate, post graduate and doctoral level  can participate in the essay competition.

Prize :  Five prizes would be awarded  to the best of entries.

Last date  & address details :

Last date for submission of essay is  5th June, 2014.  Essay should be sent either by post or email to the following address:

Nandini Chemical Journal, M 60/1, 4th Cross Street, Besant Nagar, Chennai-600090.         Email:- nsvenkatchennai@gmail.com     Tel.:  91-44-43540719 / 43511945,/24916037

DISTRESS CONDITIONS FACING F A C T IN KERALA (INDIA)

It is extremely disturbing to read  the statement of the Chairman of  FACT in Kerala  during  his interaction with media persons  at the Regional Committee Meeting of the Fertilisers Association of India   (media  report dated 1st May, 2014)  that the operations of   FACT  would come to a stand-still, if the Government  of India would  fail  to come out with the revival package immediately.

Several fertiliser units in South India, such as, SPIC and Madras Fertilisers in Tamil Nadu and FACT in Kerala, are facing critical financial conditions threatening their survival, due to their dependence on Naphtha as feed stock instead of natural gas, which is available  to several other fertiliser units in Northern and Western India but not to the fertiliser units in South India.

The cost of production of Ammonia based fertiliser from Naphtha  is not competitive with that of the natural gas based units and Government of India should recognise this fact while  taking steps to revive the three important fertiliser units in South India, viz. FACT, Madras Fertilisers and SPIC.   It is well known  that the problems faced by these units in South India  are not due to any  technological inadequacies  or inefficient operating parameters but only due to the feedstock issues (their dependence on Naphtha as feed stock) ,  which are beyond the control of these units. These companies over the last several years have accumulated huge losses, as the Government of India has failed to provide adequate and appropriate subsidy and other form of support for these companies earlier.

It takes at least three to four years to set up large urea and di-ammonium phosphate fertilizer plants involving thousands of crores of rupees of investment.  While the existing fertiliser plants in south India are withering away, new natural gas fertiliser projects are being planned   and the existing plants are sought to be expanded in other parts of the country. Any unfortunate closure of these fertiliser units in south India namely, Madras Fertiliser, SPIC and FACT would result in huge loss of production capacity in the country.

 

Thousands of crores of rupees are being spent every year in importing Urea and di-ammonium phosphate fertiliser and due to the fluctuating inter-national market price and rupee devaluation, the money spent in such imports are steadily increasing at alarming level.  Allowing the existing operating units to be closed and resorting to imports at huge cost or setting up new projects with huge investment is not a wise policy.

Careful calculations reveal that sustaining the operations of the existing fertiliser units in South India by providing them necessary fiscal support is a necessary decision  that would be pragmatic, considering the several obvious  long term and short   term benefits  for the region and the country as a whole .

Allowing the closure of these fertiliser units in South India would amount to an economic and social tragedy   for   the region and the country and that should be avoided.

It is hoped  that the next  Government of India would deal with these issues with foresight and vision by framing appropriate policies and programmes, to stabilise  the operations of  these fertiliser projects in South India.

Blog