The Hindu Business Line : Delay in FACT revival creates unrest among employees

CONTRARY to the expectations of over 4,000 employees, the revival of the ailing Fertilisers and Chemicals Travancore Ltd (FACT) at nearby Udyogamandal is being delayed inordinately, causing "anxiety and tension."

"When the government at the Centre changed, we expected that there would be a more positive approach for the revival of this premier fertiliser company," senior officials told Business Line.

They said the revival package of the company had been lying in Delhi for over two years. When the Board of Reconstruction of Public Sector Enterprises (BRPSE) was constituted, it was expected that it would clear the proposal on priority. But even 18 months after its constitution, this issue had not come up on its agenda so far, they said.Official sources said the revival package of the company was submitted the union Finance Ministry long ago with the recommendations of the Ministry of Fertilisers and Chemicals. The FM, having doubts about the viability of the proposal, wanted it to be reviewed by a consultant, for which a firm, Deloitte, was appointed.

With its review report the proposal is lying in the BRPSE for its recommendations. The officials, who were expecting that the proposal would come up for review in the September 19 or the subsequent meetings, are still optimistic that it would come up in its next meeting in November.According to them, though the company has been doing well this year, it is confronted with a serious working capital problem, especially in the wake of the spiralling naphtha price that has gone up to Rs 28,000 a tonne from Rs 4,000 a few years ago.

The company management had resubmitted its earlier proposal trimming it as desired by the BRPSE, they said. The Fertilisers and Finance ministries were convinced of the future prospects of the company, especially after the commissioning of the LNG terminal here by September 2009, the officials claimed.

FACT had requested the Centre to write off 50 per cent of the total outstanding loan amounting to Rs 574 crore as on March-end and convert the balance 50 per cent into equity of the government in the company. Besides, it had sought waiving of Rs 81 crore outstanding towards interest as on March 31 last.

They said the fertiliser pricing policy, coupled with a high cost of the raw material naphtha, had driven the company into the red. Once the revival package was approved and the company was put back on track, it would be able to break even in two years' time, they said.However, some technocrats and employees have expressed pessimism regarding the revival of the company, which they apprehend might not take place due to opposition by the Left parties in the UPA to the disinvestment of profit-making PSUs. According to them, the revival of the loss-making PSUs has to be financed with funds available from the disinvestments and that is unlikely to happen.

However, they maintained that modernisation schemes with low investment and easy payback facility would ensure sustained profits.

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