THE WORLD BANK GROUP ARCHIVES

PUBLIC DISCLOSURE AUTHORIZED

Folder Title: Project Completion Report - - Industry Credit - Credit 598 - June 23, 1986

Folder ID: 1099201

Project ID: P009706

Dates: 6/23/1986

Fonds: Records of the South Asia Regional Vice Presidency

ISAD Reference Code: WB IBRD/IDA SAR

Digitized: 5/15/2019

To cite materials from this archival folder, please follow the following format: [Descriptive name of item], [Folder Title], Folder ID [Folder ID], World Bank Group Archives, Washington, D.C., United States.

The records in this folder were created or received by The World Bank in the course of its business.

The records that were created by the staff of The World Bank are subject to the Bank's copyright.

Please refer to http://www.worldbank.org/terms-of-use-earchives for full copyright terms of use and disclaimers.

M THE WORLD BANK Washington, D.C.

@ International Bank for Reconstruction and Development / International Development Association or The World Bank 1818 H Street NW Washington DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org III'l' III ||||01 111II |I||II|iI Archw is 1099201 RI 986-051 Other #: E862, Box # 9990B Project Completion Report - India - Fertilizer Industry Credit - Credit 598 - June 3, 1986

DECLASSIFIED WBG Archives DECLASSIFIED The World Bank

JUL 18 2018 FOR O ICIAL USE ONLY Wi3 ARCHIVES

E[R Report No. 6297

PROJECT COMPLETION REPORT

INDIA - FERTILIZER INDUSTRY CREDIT

(CREDIT 598-IN)

June 23, 1986

Industry Department

This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. FOREIGN EXCHANGE RATES

Mo/Year

Appraisal 04/75 US$1 - Rupees 7.85 Board Approval 12/75 US$1 - Rupees 7.80 Credit Closing 12/82 US$1 = Rupees 9.70 Project Completion Report 02/86 US$1 - Rupees 12.50

FISCAL YEAR

April 1 - March 31

ABBREVIATIONS

ASC - Administrative Staff College of India, Hyderabad CFL - Coromandel Ltd. DOA - Department of Agriculture FCI - Fertilizer Corporation of India GOI - GSFC - Gujarat State Fertilizers Ltd. HFC - Hindustan Fertilizers Corporations Ltd. HPCL - Corp. HSC - Hindustan Steel Corporation Ltd. IDBI - Industrial Development IFFCO - Indian Farmers' Fertilizers Cooperative Ltd. KFL - Ltd. NCAER - National Council of Applied Economic Research NFL - Ltd. NLC - Neyveli Lignite Corp. PDIL - Planning and Development India Ltd. RCF - Rashtriya Chemicals & Fertilizers Ltd. RITES - Railway Investigation Transport Engineering Services SAIL - , Rourkela (the new name of HSC) SPIC - Southern Petrochemical Industries Corp. ZAC - Zuari Agrochemicals Ltd. FOR OFFICIAL USE ONLY THE WORLD BANK Washington, D.C. 20433 U.S.A.

001ce tE Dtrctr-Ceewral Opewatims Evalation

June 23, 1986

MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT

SUBJECT: Project Completion Report: India - Fertilizer Industry Credit (Credit 598-IN)

Attached, for information, is a copy of a report entitled "Project Completion Report: India - Fertilizer Industry Credit (Credit 598-IN)" prepared by the Industry Department. Under the modified system for project performance auditing, further evaluation of this project by the Operations Evaluation Department has not been made.

Yves Rovani

By Otto Maiss

Attachment

This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. FOR OFFICIAL USE ONLY

PROJECT COMPLETION REPORT

INDIA-FERTILIZER INDUSTRY CREDIT (CREDIT 598-IN)

TABLE OF CONTENTS

Page No. PREFACE BASIC DATA SHEET ...... HIGHLIGHTS ...... -.. *- * -- - --.--...- -- . .--... v Is INTRODUCTION -- - - .-...... 0 .. 1

II. PROJECT BACKGROUND ...... 1

A. Project Origin, Preparation, Appraisal, Approval and Credit Effectiveness ...... I B. Project Description and Objectives ...... 2 C. Project Scope Revision ...... 4 D. Subprojects Characteristics -...... 55--. E. Project Cost ..... *.--..-.--.--...... 6 F. Credit Allocation ...... ,. 8 G. Sub-borrowers Caracteristics...... 8

III. PROJECT IMPLEMENTATION AND MANAGEMENT ...... 9

A. Achievement of Project Objectives ...... 9 B. Project Management .. 10 C. Technical Assistance and Training ...... 11 D. Use and Performance of Engineering Contractors ...... 11 E. Transfer of Technology .-----...... 12 F. Procurement and Performance of Suppliers ...... 12 G. Implementation Schedule .- ....-..... --...... ass.... 12

IV. OPERATING PERFORMANCE ....-- ...... 13

A. Commissioning and Start-up ....--...... * 13 B. Production and Capacity Utilization ...... 13

V. FINANCIAL PERFORMANCE ...... ****...... 14

A. Financial Rates of Return ...... 14 B. Financial Performance ...... ,.... , . 15

VI. SECTORAL AND ECONOMIC PERFORMANCE ...... *...... 17

A. Economic Rates of Return ...... 17 B. Stability of Fertilizer Supply ...... 17 C. Environmental Aspects ...... 18

This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. TABLE OF CONTENTS (Cont'd)

Page No.

VII. ASSOCIATION PERFORMANCE ...... 18

VIII. LESSONS LEARNED ...... 19

ANNEXES

2-1 Revision of Project Scope ...... 21 2-2 Project Cost and Credit Allocation...... 22 2-3 Production Trends of India's Fertilizer Plants, 1981/82-1984/85 ... 23

3-1 Disbursement Schedule for the Credit ...... 24

5-1 Retention Price Formula...... 25 5-2 Financial and Economic Rates of Return for Select-d Subprojects .. 26 5-3 Summary of Financial Information for Selected Sub-borrowers 27

6-1 Hi torical Consumption, Production, and Import of Fertilizers in India, 1983/84 ...... 28 - i -

PROJECT COMPLETION REPORT

INDIA-FERTILIZER INDUSTRY CREDIT (CREDIT 598-IN)

PREFACE

1. The Association approved a credit of US$105.0 million equivalent (Credit 598-IN) on December 31, 1975 to the Government of India,(GOI) to assist India's fertilizer industry to modernize its existing production facilities, eliminate bottlenecks in production, improve pollution control systems, and install energy-efficient equipment. Under the Credit, thirty-six subprojects have been implemented by 13 subborrowers in the public, private and joint sectors, accounting for 65% of India's fertilizer manufactprers. The Credit was onlent to beneficiaries, partly through the Industrial Development Bank of India (IDBI) with funds earmarked. In addition, GOI sponsored three fertilizer industry related studies under technical assistance.

2. The Project was designed as a pilot project of a new type of program lending which is tailored for a specific industry with a number of firm subproject components. As compared with traditional program or sector loans whose subproject contents were selected and implemented under the initiative of governments, the Project was designed to enable the Association to establish direct relationships with subproject executing entities. Therefore, all the subprojects under the Project were appraised individually by the Association mission during appraisal, and included in the Project scope as firm components. In the course of Project implementa- tion, however, the original concept of the Project proved to be difficult to manage, as most of the subprojects were dropped and had to be replaced by others with similar objectives. Out of nineteen original subprojects, nine were dropped and replaced by twenty-six new subprojects. Against this background, this Project Completion Report (PCR) has been prepared partly following the line used in preparing the PCR for Development Finance Corporation (DFC) projects within the basic framework used for normal industrial projects.

3. In accordance with the revised project performance reporting procedures this report has been read in the Operations Evaluation Department (OED) but the project was not audited by OED staff. The draft Completion Report was sent to the Borrower for comments; however, none were received. - ii -

PROJECT COMPLETION REPORT

INDIA-FERTILIZER INDUSTRY CREDIT (CREDIT 598-IN)

BASIC DATA SHEET

KEY PROJECT DATA

Appraisal Actual and It em Estimate Final Estimates

ProJect Cost (US$ million) 238.7 169.2

Cost Underrun or Overrun () - 29.1

Number of Subprojects 22 a/ 39 a/

Credit Amount (US$ million)

Disbursement 105.0 101.9 Cancelled - 3.1

Project Cost and Credit Allocation by Sub-borrower

Credit Project Credit Project Allocation Cost Allocation

FCI ) ) 3.4 2.2 RCF ) ) 19.9 13.0 HFC ) 79.0 ) 38.5 b/ c/ 35.4 20.9 NFL ) ) 4.5 3.4 PDIL ) ) 0.4 0.4 NLC 19.5 12.0 21.1 10.9 HSC (SAIL) 26.1 15.5 22.2 16.2 GSFC d/ 20.6 9.0 17.1 4.5 SPIC 7/ 46.2 14.0 12.3 8.1 HPCL 25.9 4.0 - - ZAC d/ 10.2 6.0 13.6 10.5 CFL e/ 8.5 4.0 3.1 1.7 MFL e/ 1.7 1.0 0.8 0.5 IFFCO d/ - - 17.1 10.2 DOA 1.0 1.0 0.4 0.4 Total 238.7 105.0 169.2 101.9 a/ Three fertilizer related studies are included. / This amount was allocated to FCI before its restructuring into five companies. c/ Equipment procured by PDIL, which was FCI's engineering department prior to its restructuring, has been allocated to other operating companies. d/ Credit proceeds were onlent to these subborrowers through IDBI. j/ Credit proceeds were sold by the Borrower to these two companies. - iii -

Cumulative IDA Loan Disbursement

FY76 FY77 FY78 FY79 FY80 FY81 FY82 FY83

Appraisal Estimate 13.6 34.6 84.0 105.0 - - - - Actual 1.0 7.5 18.0 35.9 60.0 83.6 96.9 101.9

Stabilized Capacity Utilization of Major Plants under the Project (%)

After Project a/ Company Plant Before Project Appraisal Actual

FCI 54 80 59 RCF 76 80 89 Phosphoric Acid 61 80 78 HFC Uria 38 80 37 NLC Urea 56 80 76 SAIL Calcium Ammonium Nitrate 39 80 34 GSFC Urea 72 80 86 Phosphoric Acid 55 80 86 SPIC Ammonium/Urea 73 80 96 CFL Ammonia/Urea 76 80 84 ZAC Ammonia/Urea 87 80 89 IFFCO Ammonia 92 N/A 95

Appraisal Estimate Actual

Financial Rate of Return (%) 14-60% 2-12%

Economic Rate of Return (%) 18- 100% 12-100%

OTHER DATA

First Mention in Files 09/74 Preappraisal Mission 01/75 Appraisal Mission 04/75 Negotiations 11/75 Board Approval Date 11/16/75 Loan Signature Date 12/31/75 Effectiveness Date 03/01/76 Original Closing Date 06/30/80 Actual Closing Date 12/31/82 Borrower GOI Executing Agency 13 Fertilizer Companies and GOI a/ Average capacity utilization for four years after the Project. - iv -

MISSION DATA

Mission Mo/Yr. No. of Weeks Persons Report Date

Identification 11/74 1/2 1 12/05/74 Preparation/ Preappraisal 01/75 3 7 02/07/75 Appraisal 04/75 3 4 05/23/75 Supervision 05/76 2 4 05/25/76 Supervision 11/76 3 2 12/10/76 Problem Project Brief 03/77 - - 03/24/77 Supervision 07/77 2 2 08/09/77 Supervision 11/77 1 1 01/04/78 Supervision 03/79 1/2 1 05/29/79 Supervision 12/80 1/2 1 02/03/81 Supervision - - 1 07/12/82 v

PROJECT COMPLETION REPORT

INDIA-FERTILIZER INDUSTRY CREDIT (CREDIT 598-IN)

HIGHLIGHTS

1. In mid-1970, India's fertilizer industry operated at a level of capacity utilization below 60%, mainly due to bottlenecks in utilities supply, the use of old technology and process design faults. The Project was aimed at assisting India to remove the various obstacles to efficient operation of the fertilizer industry. The subprojects implemented under the Project include plant modifications, establishment of additional storage facilities, installation of captive power and energy saving equipment, and improvement of pollution control and testing facilities (paras. 1.01, 2.04-2.08). 2. The Project achieved most of its original objectives successfully. Rehabilitation/debottlenecking subprojects have contributed to an overall increase in capacity utilization at most of the existing production facilities, as anticipated at appraisal. After the Project, capacity utilization of the subproject entities, except for three companies which suffered from other unanticipated bottlenecks such as region-wide electricity interruptions, has increased substantially. The industry-wide capacity utilization has reached 74% for nitrogenous plants and 89% for phosphatic plants by 1984/85 as compared with the low level of below 60% in the mid-1970s (para. 3.01).

3. Besides the improvement in capacity utilization, the Project also contributed to the upgrading of the industry's management efficiency and financial situation. Following IDA's recommendation, the giant public sector company, Fertilizer Corporation of India (FCI), which had been operating several large scale fertilizer plants throughout India with inadequate management controls, was restructured into five smaller and more manageable regional corporations. Also, fertilizer prices which stayed at an extremely low level in the mid-1970s, not sufficient for even efficient fertilizer manufacturers to generate positive cash flow, were substantially raised to allow efficient fertilizer manufacturers to become financially sound. The retention price formula, which was introduced in 1977 at IDA's recommendation, was designed to enable efficient operators to realize a 12% after tax return on investments (paras. 7.03-7.04).

4. Even though the Project has ultimately achieved most of its original objectives, it encountered considerable difficulties in implementation. The Project scope changed substantially several times: nine subprojects in the original subproject list of 19 were dropped and replaced by 26 other subprojects; the Project was completed 52 months behind original schedule; and a portion of the credit (US$3.1 million out of US$105 million) had to be cancelled because GOI could not prepare in time the needed replacement subprojects (paras. 3.11-3.13). - vi -

5. From the problems experienced in Project implementation, three major valuable lessons have been learned. One lesson was that a project involving various types of small subprojects by a number of entities should be coordinated by a central unit within the country charged with the responsibility for monitoring and coordinating the Project, preferably at the government level. Even though this was envisaged in the Project, it was not put into effect. The other lesson was that the Project should have been designed to include a smaller number of relatively large subprojects if the original approach were to be workable. Another lesson was that a project involving a number of subproject entities requires a good progress and completion reporting system using a standardized format and content. Due to the inefficient reporting system, the Ministry of could not consolidate the subproject data and prepare its draft Project Completion Report (PCR) (paras. 8.01-8.04). - 1 -

PROJECT COMPLETION REPORT

INDIA-FERTILIZER INDUSTRY CREDIT (CREDIT 598-IN)

I. INTRODUCTION

1.01 The dramatic fertilizer price increase in the early 1970s hit fertilizer importing countries, including India, presenting a major threat to the exploitation of the full potential of high yielding varieties, and thus the food self-sufficiency programs of these countries. In 1974/75 India was importing 48% of its total nitrogen (N) fertilizer requirements, 52% of its phosphate (P) consumption, and 100% of potash (K) requirements. Fertilizer imports had been far bigger than previously expected mainly because actual domestic production had fallen short of expectations due to low capacity utilization of installed fertilizer capacity. Major reasons for the low capacity utilization were: (i) use of old technologies; (ii) process design faults; (iii) shortage of electric power and other utilities; (iv) shortage of raw materials; (v) management/labor problems; (vi) financing gaps; and (vii) technical limitations. Because of these constraints, the target of reducing its dependence on imports down to 30% during the Fifth Five-Year Plan (1974/75-1978/79) appeared difficult to achieve.

1.02 Against this background, India prepared an investment program in collaboration with the Association aimed at expansion of its domestic fertilizer production base by enhancing the capacity utilization of existing facilities through rehabilitation/debottlenecking. At GOI's request, IDA provided assistance to implement the program. Under the Project thirty-five subprojects have been implemented to modernize technology, eliminate bottlenecks, improve efficiency of energy use and reduce the level of polluting effluents. The Project was initiated in September 1974, appraised in April 1975, approved by the Board in November 1975, and completed in April 1984, 52 month. behind schedule.

II. PROJECT BACKGROUND

A. Project Origin, Preparation, Appraisal, Approval and Credit Effectiveness

2.01 Since 1967 the Association had been involved in the Indian fertilizer sector by financing the establishment of several grassroot fertilizer production facilities in India. To meet the increasing needs of the agriculture sector, 001 initiated a program in 1974 to expand domestic fertilizer production under the Fifth Five-Year Plan. The program consisted of two parts: (i) expansion of grassroot fertilizer production capacities; and (ii) improvement of capacity utilization of existing plants which then were operating at below 60% of their designed capacities. In September 1974, 001 reviewed the possibility of Bank Group assistance in - 2 - implementing the latter part of the program in a meeting with a Bank mission then visiting India, and subsequently requested an IDA credit of US$105 million for its financing. Following an identification mission in November 1974 to assist in the preparation of subprojects to be implemented under the Project, a preappraisal mission visited India in January 1975, agreed with GOI on the project scope, capital cost estimates, and IDA role. The Project was appraised in April/May 1975. The IDA Credit was negotiated and approved by the Board of the Association in November 1975. It became effective on March 1, 1976.

2.02 The subprojects in the original list of the Project were selected after detailed discussions with the concerned fertilizer companies and review with GOI to ensure their quick implementation. However, the subproject approval procedures within the companies and in the Government took a long time. In the process, almost half of the original subprojects were dropped and replaced with others having similar objectives. Because of substantial delays in the start of implementation, a Problem Project Brief was prepared in March 1977 delineating the problems facing the Project. The contents of subprojects were revised several times in order to substitute problem subprojects with new ones. As a result, the completion date of the Project which was originally set for December 31, 1979 was postponed three times. The cumulative delay in Project implementation was 52 months.

2.03 The Credit was made to GOI on standard IDA terms. About two-thirds of the Credit (US$67.0 million equivalent) was onlent by GOI directly to public sector companies; and the remaining one-third (US$33.3 million equivalent) onlent to private sector companies through the Industrial Development Bank of India (IDBI). The balance of Credit proceeds (US$2.2 million equivalent) was sold by the Borrower to two companies at the prevailing exchange rates.

B. Project Description and Objectives

2.04 The objectives of the Credit were to: (i) assist in removing various limitations facing the Indian fertilizer industry and thereby raise production in the existing facilities from the then industry-wide average level of less than 60% to about 80-90% capacity utilization; (ii) help several companies install pollution control facilities consistent with the agreed environmental standards; and (iii) provide technical assistance to facilitate fertilizer sector planning at the Government level.

2.05 Project components were selected after reviewing the needs of the Indian fertilizer industry with the Ministry of Petroleum and Chemicals (MPC) and the fertilizer producing companies. Nineteen original subprojects were selected to be carried out by nine companies; three fertilizer sector studies were included to help GOI in its sector planning.

2.06 The original subprojects under the Project, and their respective sponsors and objectives are summarized below: Original Project Sponsors and Subprojects

Subproject Sponsor Subproject Objective

1. Fertilizer Corporation - Boiler/power set Reduction of the plant's of India (FCI) at Gorakhpur dependence on outside power supply

- Boiler/power set at Durgapur

- Boiler at Trombay Additional steam generation - Ammonia tank wagons Increase in operational and storage at stability Trombay

- Pollution control Environmental protection and testing equip- ments

2. Neyveli Lignite - Feedstock conver- Conversion of feedstock Corpration (NLC) sion from lignite to fuel oil

3. Hindustan Steel - Feedstock conver- Conversion from coke gas Corporation (HSC) sion to naphtha

4. Gujarat State - Purge gas recovery Energy efficiency Fertilizer Corp. (GSFC) - Fluorine Recovery Recovery of fluorine from gaseous effluent - Phosphoric acid plant modernization plant debottle- necking

5. Hindustan Petroleum - Refinery debottle- Expansion of production Corp. (HPCL) necking capacity

6. Madras Fertilizers Ltd. - Urea debottleneck- Plant modernization (MFL) ing - Ammonia process Process computerization control unit

7. Southern Petrochemical - Fluorine recovery Recovery of fluorine Industries Corp. (SPIC) from effluent - Soda ash plant Conversion of excess ammonia

8. Coromandel Fertilizers - Boiler/power set Increase in reliability Ltd. (CFL) of power supply - Fluorine recovery For planned aluminum fluoride plant - 4 -

modernization 9. Zuari Agro Chemicals - Ammonia plant Plant (ZAC) debottlenecking - Urea plant pollu- tion control

on Fertilizer 10.001 (technical Assistance) - Various Fertilizer Study Related Studies demand projections, distribution, and transportation.

C. Project Scope Revision times as shown 2.07 The Project scope was substantially revised four in Annex 2-1, and summarized below.

Project Scope Change in Subprojects a/

1st 2nd 3rd 4th Revision Original Revision Revision Revision (Dec. 1975) (Mar. 1978)(Jan. 1980)(Jun. 1980)(April 1981)

Addition of New Subprojects 19 17 5 1 4

Drop of 1 - Subprojects - 9

Total Number of 32 36 Subprojects 19 27 31

Number of 13 Sub-borrowers 9 7 13b/ 13

Number of Plants involved 11 14 15 15 15

assistance. a/ Excluding three study components under technical b/ FCI has been restructured into five companies.

Although the Project was originally to include nineteen firm subproject the components appraised individually as normal industrial projects, were companies decided not to proceed with several of them and they similar objectives. Out replaced by a number of smaller subprojects with 1 of the nineteen original subprojects /, nine subprojects were dropped and replaced by twenty-six others.

hereafter unless 1/ Three studies under technical assistance are excluded otherwise indicated when subprojects are mentioned. - 5 -

2.08 There were three major reasons for the cancellation of 9 of the original subprojects. First, four original subprojects were dropped due to government decisions. Three planned flourine recovery subprojects were dropped by the sponsors (GSFC, SPIC, CFL) in light of the GOI decision that these subprojects should be based on commercially unproven Indian technology rather than the internationally-available and proven technology. The HPCL's refinery debottlenecking subproject was dropped in view of the proposed new Mathura refinery which was to be established in the same marketing area. Second, financial constraints led to the cancellation of a chlorine/soda ash subproject sponsored by SPIC. This sub-project was subsequently implemented without Bank Group financing. As its financial situation improved, SPIC implemented three other smaller subprojects later. Third, two other companies voluntarily decided not to proceed with their subprojects for technical and economic reasons. Ammonia process control (MIC) and boiler (FCI) were cancelled voluntarily by the subproject entities. Replacement subprojects were provided, reviewed and accepted by the Association.

D. Subprojects Characteristics

2.09 The thirty-nine subprojects implemented are grouped into four main categories: (i) fertilizer capacity expansion and process efficiency improvements including plant modification/rehabilitation and additional storage of intermediate product; (ii) capture power and utilities; (iii) pollution control and testing equipment; and (iv) fertilizer related studies. The table below compares the original subprojects with the ones actually implemented.

Characteristics of Subprojects

Category At Appraisal Actual

A. Fertilizer Expansion and Process Efficiency Improvement

1. Plant Phosphoric acid plant Phosphoric acid plant Rehabilitation debottlenecking (GSFC), debottlenecking (RCF, Refinery debottlenecking GSFC), ANP plant rehab- (HPCL), urea debottle- ilitation (RCF), necking, Ammonia process ammonia/urea plant control (MFL), Ammonia modification (MFL, HFC, debottlenecking (ZAC). SPIC, IFFCO). 2. Feedstock Feedstock conversion Feedstock conversion Conversion (NLC, SAIL) (RCF, NLC, SAIL) 3. Waste Recovery Purge gas recovery Purge gas recovery (GSFC) fluorine (GSFC, SPIC, IFFCO) recovery (GSFC, SPIC, CFL) - 6 -

4. Additional Ammonia storage and Ammonia storage (FCI, Storage/Transport tank wagons (RCF) HFC, NFL, SPIC, IFFCO), ammonia tank wagons (HFC, NFL)

5. New Plant Soda ash/ammonium None chloride Plant (SPIC)

B. Captive Power and Utilities

1. Captive Power/ Boiler/power set (FCI, Boiler/power set (RCF, Utilities RCF, CFL) HFC, CFL)

C. Pollution Control and Testing Equipment

1. Pollution Control Pollution Control Pollution control (RCF, (RCF, MFL, ZAC) MFL, ZAC, IFFCO)

2. Testing Equipment Non-destructive testing Non-destructive testing equipment (PDIL) equipment (PDIL)

D. Fertilizer-Related Studies

Technical Three studies (DOA) Three studies (DOA) Assistance

E. Project Cost

2.10 The Project costs, both the appraisal estimates and the actuals, for each subproject are given in Annex 2-2, and summarized below:

Comparison of Projects Costs - Appraisal Estimate vs. Actual

Appraisal Estimate Actual Number of Amount Number of Amount Subproject (US$ million) % Subproject (US$ million) %

FCI 5 79.0 33.1 1 3.4 2.0 RCF - - - 5 19.9 11.8 HFC - - - 8 35.4 20.9 NFL - - - 2 4.5 2.7 PDIL - - - 1 1.1 0.7 NLC 1 19.5 8.2 1 21.2 12.5 SAIL 1 26.1 10.9 1 22.4 13.2 MFL 2 1.7 0.7 1 0.8 0.5 GSFC 3 20.6 8.6 2 17.1 10.1 SPIC 2 46.2 19.4 4 9.2 5.4 HPCL 1 25.9 10.9 - - - ZAC 2 10.2 4.3 3 13.6 8.0 CFL 2 8.5 3.6 1 3.1 1.8 IFFCO - - - 6 17.1 10.1 DOA 3 1.0 0. 3 0.4 0.2 T 238.7 100.0 39 169.2 100.0 -7-

Due to the major scope change, a comparison of the actual costs for the whole project with the appraisal estimates is not meaningful. Overall Project costs were lower than appraisal estimates by 29%, mainly due to cancellation of subprojects which would have required higher local cost components. The actual capital costs for most of the original subprojects, which accounted for about 62% of the total project costs, were slightly lower than appraisal estimates as shown in Annex 2-2. The actual costs for the 10 original subprojects which were implemented were US$104.3 million, about 7.2% lower than the appraisal estimate of US$112.4 million. The main reason for cost underrun for these components was the rapid devaluation of local currency during their implementation, resulting in the reduction of local costs in U.S. dollar terms.

2.11 Actual capital costs for the whole Project are compared with the appraisal estimates by type of subprojects in the table below.

2yital Costs !y Type of Mai~Ects (in LS$ uinn)W

ffndal Edae Ati

MJblects laca Fm*ig a/Ibtal % 4 proiects Incal oselgn Mbtal % 1. Fertilizr Capairy apywkin & Proess EfaICxy 14p"Maent 10 79.7 67.6 147.3 61.7 29 55.9 79.5 135.4 80.5 2. Irternal Power Genein & tilities 4 31.1 29.8 60.1 25.2 3 9.9 19.1 29.0 17.2

3. AntiHbtI 4 1.0 3.4 4.4 1.8 3 0.6 2.9 3.5 2.1

4. 1efinery lqkpawn 1 21. 4.0 25.9 10.9 - - - - -

5. Sbxft under edi3ical Jaistano 3 - 1.0 1.0 0.4 3 - 0.4 0.4 0.2

6. T1lal 22 133.7 105.0 238.7 10D.0 38 66.4 101.9 168.3 100.0

a/ bluleg tndirect fondgp exchw* costs.

Actual proportions of Project costs for each type of subproject changed significantly from the appraisal estimates, reflecting the major changes in the scope of the Project. The portion of fertilizer capacity expansion and - 8 -

process efficiency improvement subprojects substantially increased to account for 81% of the total Project capital costs as compared to an appraisal estimate of 62%.

F. Credit Allocation

2.12 The proceeds of the Credit were originally allocated to twenty- two subprojects (including the three sector related studies sponsored by the Department of Agriculture (DOA)) to be carried out by fourteen executing agencies. As the Project scope changed, the Credit proceeds were reallocated to thirty-nine subprojects accordingly. As FCI, the single largest original sub-borrower, was reorganized into five smaller companies, the proceeds were reallocated. The following table summarizes the allocation of the Credit at appraisal and the actual results.

Credit Allocation (in US$ million unless otherwise mentioned)

Appraisal Estimate Actual Number of Number of Executing Agency Subprojects Amount % Subprojects Amount %_

FCI a/ 5 38.5 36.7 1 2.2 2.2 RCF - - - 5 13.0 12.8 HFC - - - 8 20.9 20.5 NFL - - - 2 3.4 3.3 PDIL - - - 1 1.1 1.1 NLC 1 12.0 11.4 1 10.9 10.7 SAIL 1 15.5 14.8 1 16.2 15.9 MFL 2 1.0 1.0 1 0.5 0.5 GSFC 3 9.0 8.6 2 4.5 4.5 SPIC 2 14.0 14.2 4 6.4 6.3 HPCL 1 4.0 3.8 - - - ZAC 2 6.0 5.7 3 10.5 10.3 CFL 2 4.0 3.8 1 1.7 1.7 IFFCO - - - 6 10.2 10.0 DOA 3 1.0 1.0 3 0.4 0.4 Total 22 105.0 100.0 39 101.9 100.0

a/ FCI was split into five smaller companies: FCI, HFC, RCF, NFL, and PDIL. b/ US$3.1 million has been cancelled.

G. Sub-borrower Characieristics

2.13 As of March 31, 1985, twenty-one fertilizer production companies, including eight public sector companies, operate in the Indian fertilizer industry. Feedstock, product, production capacity, and recent production - 9 -

performance of these companies are detailed in Annex 2-3. As of March 1985, the fertilizer plants operated by the thirteen beneficiaries of the Credit accounted for approximately 74% of the nation's total capacity. The number of plants, major products, feedstock, and production capacity of these companies are summarized as follows.

Characteristics of Subproject Sponsor

Design Number Major Capacity Company Plants Products Feedstock ('000 tpy)

A. Public Sector

FCI 4 Urea, AS Naphtha, Fuel 806 RCF 1 Urea, NP, ANP Natural Gas 317 HFC 3 Urea, AS Naphtha, Natural Gas 349 NFL 3 Urea, CAN Fuel Oil 705 NLC 1 Urea Fuel Oil 70 SAIL 6 CAN/AS Coke, Naphtha 144 MFL 1 Urea, NP, NPK Naphtha 176

B. Private Sector

GSFC 1 Urea, AS, DAP Natural Gas, Naphtha 236 SPIC I Urea, NP, NPK Naphtha 258 ZAC I Urea Naphtha 171 CFL 1 Urea, NP, NPK Naphtha 84

C. Cooperative

IFFCO 2 Urea, NP, NPK Natural Gas, Naphtha 488

III. PROJECT IMPLEMENTATION AND MANAGEMENT

A. Achievement of Project Objectives

3.01 Although completion of the Project was delayed and the agreed Project scope was substantially revised, the Project achieved its original objectives to a large extent. All the subprojects, except for three nitrogenous fertilizer plants which are currently faced with unexpected constraints (FCI, HFC and SAIL), resulted in increased capacity utilization of the existing facilities, efficient energy consumption, and environmental protection. FCI, HFC and SAIL could also have fully achieved their objectives if there had not been unexpected interruptions such as power shortage in their respective regions. As a result of the implementation of the subprojects, the industry-wide capacity utilization has increased from - 10 - the level of below 60% in the early 1970s to the current level of 74% in nitrogen and 89% in phosphates. Increases in capacity utilization after the Project for major beneficiaries of the Credit are depicted below:

Capacity Utilization Before and After the Project (%)

After Project Before Appraisal Company Plants Project8 / Estimate Actualb/

FCI Urea 54 80 59d/ RCF Ammonia 76 80 89 Phosphoric Acid 61 80 78 HFC Urea 38 80 38e/ NFL Urea 73 80 80 NLC Urea c/ 56 80 76 SAIL Ammonia/CAN 39 80 34 d/ MFLI Urea 79 80 79 GSFC Urea 72 80 86 Phosphoric Acid 55 80 86 SPIC Ammonia/Urea 73 80 96 ZAC Ammonia/Urea 80 80 89 CFL Ammonia/Urea 76 80 84 IFFCO Ammonia/Urea 92 - 95 a/ Capacity utilization before the subproject was launched. b/ Average capacity utilization for four years after the Project. c/ Capacity expansion was undertaken during Project implementation. d/ Due to region-wide etectricity interruptions, the facillities have not been able to fully exploit their capacities. e/ HFC has been faced with shortage of feedstock.

3.02 In addition to increases in capacity utilization, another major achievement was reduction of materials consumption per ton of output. Conversion to cheaper and more economical feedstock and installation of cost-saving equipment entailed reduction in raw materials consumption and other inputs per unit of production. Given the shortage of fertilizers in India the savings in raw materials were directly utilized to increase fertilizer production.

B. Project Management

3.03 The subprojects under the Project were implemented and managed by each sponsor with minimum coordination of centralized project management at the Government level. At each company level, most of the technology- oriented subprojects were carried out by reputed engineering firms on a turnkey or semi-turnkey basis, limiting the need for local management. - 11 -

Worldwide reputed foreign firms were more actively involved in the techno- logy-intensive subprojects such as plant rehabilitation/debottlenecking.

3.04 Most of the original subprojects underwent delays in initiation of their implementaion due to delayed project initiation, government approvals, financial difficulties, or technical arguments, resulting in the cancellation of several subprojects. In accordance with GOI's responsibi- lities stipulated in the Credit Agreement, the Ministry of Petroleum and Chemicals (MPC) was supposed to monitor the implementation of the subprojects, provide assistance to the subborrowers in obtaining necessary Government approvals, and coordinate with other related ministries, including the Department of Economic Affairs (DEA). However, in the absence of effective project monitoring at the Government level, i.e., centralized project management, Project implementation was poorly monitored and coordinated, thus leading to substantial delays in Project completion and material changes in Project scope.

C. Technical Assistance and Training

3.05 Three fertilizer ector related studies were sponsored by the Department of Agriculture (M0A) and undertaken by local research institutes under the Project. These are: (i) Fertilizer Demand Projections Study carried out by the National Council of Applied Economic Research (NCAER); (ii) Fertilizer Transportation Study by the Railway Investigation Transport Engineering Services (RITES); and the Fertilizer Storage Study undertaken by the Administrative Staff College of India (ASC). The results of these studies were subsequently used by the Government in drawing up fertilizer sector development strateigies.

3.06 Local technical staff monitored the implementation of subprojects, even the ones implemented by foreign contractors on a turnkey and semi-turnkey basis. After the mechanical completion, the contractors trained the local staff. PDIL also undertook training sessions for the use of testing equipment procured centrally by PDIL for the subproject sponsors.

D. Use and Performance of Engineering Contractors and Consultants

3.07 Wherever local expertise was not available, foreign consultants were used in the implementation of subprojects, particularly for revamping/modernizing of the older facilities which required specialized technology. Generally, contracts involving foreign participation fell to the original designers of the plants. These foreign firms implemented some of the subprojects on a turnkey basis and provided consultancy services for several other subprojects which were carried out mainly by in-house technical personnel of the subproject sponsors. The quality of technology provided by these firms was satisfactory and has not caused any issues with the subproject sponsors.

3.08 Local engineering firms also participated in the implementation of subprojects wherever proper local expertise existed. Apart from local contractors which were mainly charged with installation and construction, - 12 - some local engineering firms obtained turnkey contracts for several subprojects. The quality of local engineering firms was also satisfactory. For example, PDIL implemented NLC's feedstock conversion subproject successfully and timely on a turnkey basis.

E. Transfer of Technology

3.09 Local firms, including subproject sponsors, directly managed the implementation of subprojects as far as local technology permitted with technical assistance from foreign consultants. In the course of Project implementation, local firms easily obtained necessary technology because foreign consultants, most of whom were the original designers of the plants, were competing for the rapidly growing market in India. While with thA turnkey contracts, particularly in the case of rehabilitation/debottle- necking subprojects, the transfer of engineering technology had been limited, the experience obtained from these subprojects has, on the whole, been substantial and has been well utilized for the improvement of other plants with similar problems not included in the Project.

F. Procurement and Performance of Suppliers

3.10 Procurement for the subprojects was carried out following the Bank's procurement guidelines with no significant problems impacting on project implementation.' Due to the nature of the subprojects, the average size of the bid packages was relatively small and the share of proprietary items not appropriate for international competitive bidding (ICB) was somewhat large. Where appropriate, components of some subprojects were awarded to contractors, both foreign and local, on a turnkey basis following ICB procedures. Adequate international competition and good response to bid invitations were available under ICB and contracts were awarded to technically acceptable suppliers at competitive prices and with appropriate local preference. On an overall basis the suppliers and the contractors performed satisfactorily delivering technically satisfactory products on time.

G. Implementation Schedule

3.11 At appraisal all the subprojects were expected to be completed by December 31, 1979. However, only five subprojects out of the nineteen original subprojects, excluding the three study components, were completed within the original target date. While other subprojects were delayed, nine subprojects were finally cancelled and replaced by substitute subprojects later. The overall Project was completed in April 1984, 52 months behind schedule.

3.12 The delay in Project implementation was caused mainly by delays in sub-project preparation and the long time taken for Government approvals due to the lack of coordination among related ministries. Since various government approvals from different authorities were required for subprojects to be initiated, central coordination at the Government level was essential for their timely implementation. While delays in approvals for some subprojects were identified at the beginning of Project - 13 -

implementation, the lack of coordination among related ministries which had different authorities in decision-making resulted in delays in subproject initiation and ultimately the cancellation of several original sub- projects. The approvals for the subprojects were considered with the same detailed procedures that govern larger investments but not with the same urgency.

3.13 The slow decision making process in GOI was also-the main cause of celay in replacing the dropped subprojects. Following the cancellation of several projects, GOI could not agree on substitute projects promptly. Even the implementation of substitute subprojects was delayed from the planned schedule due to delays in government approvals. The Association appraisal mission underestimated these institutional constraints facing Project im'plementation.

IV. OPERATING PERFORMANCE

A. Commissioning and Start-up

4.01 None of the subprojects were faced with major technical problems in commissioning and start up. Rehabilitation/debottlenecking subprojects had direct impact on the performance of the concerned plants. These subprojects as well as captive power/utility components contributed to enhancing capacity utilization by eliminating interruptions. New energy efficiency equipment installed under the Project also improved operational efficiency by saving inputs consumption per unit of production.

B. Production and Capacity Utilization

4.02 The beneficiaries generally achieved levels of production as anticipated at appraisal or higher except for the few instances where other unforeseen constraints limited production. The table in the next page summarizes the fertilizer production level of the major beneficiaries over the last four years. - 14 -

Improvegent of Capacity Utilization After the Project (Z)

Subproject Plant/ (kmpletion After Project Product Year before Project 1981/82 1982/83 1983/84 1984/85

FCI Urea,() 1982 54 - 60 58 57 RCF rea/ANP (Tromboy) 1980 76 101 75 95 85 "10sphoric Acid (Trby) 1980 61 79 70 80 81 HFC Urea (Durgapur) 1983 28 - - 46 38 Urea (Barauni) 1983 49 - - 40 25 NFL Urea (Nangal) 1982 73 - 78 81 82 N1L Urea 1979 56 65 67 82 84 SAIL Calcium Amrnia Nitrate 1981 39 66 8 19 14 MFL Urea 1979 79 88 77 65 86 GSFC Urea 1980 72 85 77 93 90 Phs~h#ric Acid 1979 72 74 86 81 102 SPIC Urea 1980 71 86 92 76 105 ZAC Urea 1981 71 - 100 86 94 CFL Urea 1980 76 85 74 88 87 IFFO Urea 1980 92 90 99 87 104

Interruptions in power supply as well as mechanical problems prevented FCI from fully taking advantage of additional ammonia storage facility at Sindri carried out under the Project. SAIL achieved a satisfactory level of capacity utilization at 66% in the first year after the commissioning of the naphtha reformer subproject which enabled it to convert feedstock from coke oven gas (COG) to naphtha. However, overall power shortages prevailing in the region prevented it from realizing the benefits of the subproject. Also, HFC could not derive full benefits from the subprojects due to the continuing poor quality of power supply as well as shortage of feedstock. Measures now being implemented would improve power supply and enable them to achieve satisfactory operational performance.

V. FINANCIAL PERFORMANCE

A. Financial Rate of Return

5.01 In November 1977, GOI introduced a system of ex-factory pricing--retention price formula--which would ensure a reasonable financial rate of return for fertilizer manufacturers under conditions of efficient operations (The retention price formula is explained in detail in Annex 5-1). The formula sets the price at levels which would enable fertilizer manufacturere, operating at 80% capacity and at a reasonable level of input - 15 - consumption, to generate sufficient cash to cover production costs and a 12% after tax return on capital employed.

5.02 At the time of Project appraisal in 1975, fertilizer prices were set at levels sometimes insufficient to cover production costs. Therefore, the IDA Credit Agreement, included a covenant, requiring GOI to take action to ensure that ex-factory prices, under conditions of efficient operation, would be sufficient to cover production costs, service debt, and earn a reasonable return on invested capital.

5.03 Under the retention price formula, fertilizer manufacturers are guaranteed to earn approximately 10% financial internal rate of return (FRR) on new investments at 80% capacity utilization. As shown in Annex 5-2, FRRs for subprojects implemented in plants which operated at a capacity higher than 80%, therefore, are estimated at 10% or above. Conversely, FRRs for subproject carried out by FCI, SAIL and HFC, which have achieved low capacity utilization, are estimated to be below this level.

B. Financial Performance

5.04 The introduction of the new pricing system improved the benefici- aries' financial situation. Until the introduction of the retention price formula, the relative prices between fertilizers and inputs (both of them were far below economic prices) did not allow even efficient fertilizer manufacturers to generate profits. Because of the poor financial situation, most beneficiaries could not carry out plant improvements without funds from outside sources. The introduction of the retention price system combined with an increase in capacity utilization improved the financial standing of all the beneficiaries. A representative summary of the recent financial performance of selected beneficiaries (3 public sector companies, 1 private sector company, and 1 joint sector company) over the past four years is given in the table on the following page (See Annex 5-3 for details). - 16 -

Financial Situation Improvement of Indian Fertilizer Manufacturers (in millions of Rupees)

1981/82 1982/83 1983/84 1984/85 FCI (Public Sector Company) Capacity Utilization (%) 54 60 58 57 Operating Income/Sales (%) (71.7) (32.3) (24.8) (13.8) Current Ratio (times) 1.4 2.1 1.5 1.8 Debt Service Coverage (times) 0.0 0.6 0.3 0.8 Debt/Equity 0/100 0/100 45/55 45/55

RCF (Public Sector Company) Capacity Utilization (%) 87 77 90 84 Operating Income/Sales (%) 7.6 7.1 11.4 9.4 Current Ratio (times) 1.8 1.6 1.6 1.7 Debt Service Coverage (times) 1.8 3.2 3.3 3.5 Debt/Equity 36/64 40/60 36/64 38/62

NFL (Public Sector Company) Capacity Utilization (%) 69 71 71 71 Operating Income/Sales (%) 12.0 10.9 6.0 11.0 Current Ratio (times) 1.4 1.2 3.2 2.7 Debt Service Coverage (times) 2.9 1.2 0.9 4.3 Debt/Equity 48/52 38/62 26/74 23/77

MFL (Private Sector Company) Capacity Utilization (%) 88 77 65 86 Operating Income/Sales (%) 3.1 8.3 3.7 8.0 Current Ratio (times) 2.8 2.8 2.4 2.5 Debt Service Coverage (times) 0.5 a/ 0.4 a/ 9.1 N/A a/ Debt/Equity 46/54 0/100 0/100 0/100

IFFCO (Joint Sector Company) Capacity Utilization (%) 99 100 91 107 Operating Income/Sales (%) 13.4 12.6 11.8 9.7 Current Ratio (times) 3.0 2.7 2.1 2.2 Debt Service Coverage (times) 2.8 2.7 0.9 2.0 Debt/Equity 45/55 43/57 34/67 33/67 a/ The entire amount of long term loan was paid back over 1981/82 - 82/83 period. b/ No debt service.

5.05 As shown in the above table, all the financial ratios stayed at satisfactory levels as long as the fertilizer companies achieved a reasonable level of capacity utilization. However, finances of those companies having operated at low capacities have been weak as well - 17 -

illustrated in the case of FCI. Among the 13 subproject sponsors, three companies (FCI, HFC and SAIL) fell into this category.

VI. SECTORAL AND ECONOMIC PERFORMANCE

A. Economic Rates of Return

6.01 Based on updated assumptions on capital costs and capacity utilization, economic rates of return have been calculated for subprojects whose benefits are quantifiable, ranging from 11.6% to 100%. Incremental benefits and costs take into account the recent operational performance of the plants. Except for those carried out by HFC and SAIL which have been operating at capacities substantially below the levels anticipated at appraisal, updated ERRs are close to appraisal estimates. A comparison of ERRs between appraisal estimates and actuals is given in Annex 5-2.

B. Stability of Fertilizer Supply

6.02 Historical supply and demand of fertilizers over the past 25 years are given in Annex 6-1 and summarized in the table below:

India - Past Fertilizer Conswtion, Production, and Deficit (in million tonnes of nutrient)

Nitrogen (N) Phmsphate (P205) Potash (K) Totals Year Con Prod. Deft. Cons. Prod. Deft. Cons. Prod. Deft. Cons. Prod. Deft.

1959/70 0.23 0.08 0.15 0.05 0.05 - 0.02 - 0.03 0.31 0.14 0.18 1969/70 1.36 0.73 0.63 0.42 0.22 0.20 0.21 - 0.21 1.98 0.95 1.03 1974/75 1.77 1.19 0.58 0.47 0.33 0.14 0.34 - 0.34 2.57 1.52 1.05 1979/80 3.50 2.23 1.27 1.15 0.76 0.39 0.61 - 0.61 5.26 2.99 2.27 1980/81 3.68 2.16 1.52 1.21 0.84 0.37 0.62 - 0.62 5.52 3.01 2.51 1981/82 4.07 3.14 0.93 1.32 0.95 0.37 0.68 - 0.68 6.07 4.09 1.98 1982/83 4.26 3.43 0.83 1.42 0.98 0.44 0.74 - 0.74 6.42 4.42 2.00 1983/84 4.90 3.50 1.40 1.62 1.00 0.62 0.81 - 0.81 7.33 4.50 2.83

Average Aruusl Growth Rate (%) 1959/60- 1979/80 14.6 18.1 17.0 14.6 18.6 15.2 16.5 1959/60- 1983/84 13.6 17.1 15.6 13.3 16.6 14.1 15.6 1974/75- 1983/84 12.0 12.7 12.7 13.1 10.1 12.4 12.8 1979/80- 1983/84 8.8 11.9 8.9 7.1 7.3 8.7 10.8 - 18 -

Consumption of all fertilizers increased from 305,000 tyn in 1959/60 to 8.2 million tyn in 1984/85 at an average annual growth rate of about 14.00%. Over the same period, local production of fertilizers increased at a faster pace (average annual growth rate of 15.6%). Therefore, import requirements as percentage of total fertilizers declined from 58% in 1959/60 to 36% in 1984/85.

6.03 The Project enhanced the domestic fertilizer production base substantially and improved the stability of fertilizer supply for agriculture. During 1979/80-1984/85 period, the growth rate of domestic fertilizer production outpaced that of consumption more rapidly than previous years mainly because subprojects carried out under the Project came on stream during the period, substantially raising production levels of existing facilities.

C. Environmental Aspects

6.04 Most of the subprojects, which have aimed at better plant performance directly and indirectly, contributed to improving the environmental situation of the beneficiaries. The beneficiaries installed pollution testing and control equipment and trained the plant personnel on their use, thus improving the environment quality of the plants; new product storage systems reduced the potential of future environmental problems; new waste recovery units and energy efficient equipment helped to reduce the level of pollutants and so did retrofitting of old plants.

VII. ASSOCIATION PERFORMANCE

7.01 The Association had financed several grassroot fertilizer projects until it recognized that the same priority should also be given to modernization of existing fertilizer production facilities whose capacity utilization remained low. Once this need was identified, the Association moved quickly to provide assistance to GOI in implementing appropriate measures. During Project implementation, the Association's supervision missions detected various problems causing delays in the initiation of subproject implementation, and conveyed recommendations promptly in order to expedite the decision of the Government. Particularly whenever Project scope needed revision to replace some of the original subprojects, the Association processed it quickly to enable them to be implemented on time.

7.02 During Credit negotiations, OI had agreed to implement three fertilizer industry related studies which would provide the basis for fertilizer industry development planning. These studies were: (i) fertilizer demand projection; (ii) fertilizer transportation study; and (iii) study on fertilizer storage. All the studies were undertaken by local research institutions. The Association had reviewed with the Department of Agriculture (DOA), the study sponsor, the scope of studies, and followed up the studies. The findings of the studies contributed to the betterment of GOI's fertilizer sector planning as well as to the - 19 -

formulation of Bank Group lending strategies. A 12-member steering advisory committee in DOA supervised these studies.

7.03 At the recommendation of the IDA project team, the giant public sector company, Fertilizer Corporation of India (FCI), which had operated seven large scale fertilizer plants scattered throughout India, was restructured into five smaller and more manageable regional corporations, namely: (i) Fertilizer Corporation of India (FCI); (ii) Hindustan Fertilizer Corporation (HFC); (iii) Rashtriya Chemicals Fertilizer (RCF); (iv) National Fertilizer Limited (NFL); and (v) Planning and Development India Ltd. (PDIL). FCI, with plants in diverse regions, was poorly managed due to lack of effective centralized management and coordination, slow decision making process, and difficulties in corporate planning. Recogniz- ing this management problem from the inception of the project work, the IDA project team had recommended reorganization of FCI into several smaller regional companies of manageable sizes. The reorganization was formally announced in late 1977 and took effect in late 1979. It has been generally acknowledged that the reorganization has fully served the purpose. 7.04 As mentioned in para 5.02, IDA recommended to GOI to revise its fertilizer pricing mechanism, and consequently the retention price formula was introduced in 1977. In the mid-1970s, ex-factory fertilizer prices were maintained low to subsidize agriculture. At times, fertilizer prices were set at levels which did not allow even efficient manufacturers to cover production costs. Therefore, IDA recommended to GOI to consider a pricing mechanism which could ensure a reasonable rate of return on investments for efficient operators. This retention price mechanism improved not only the financial viability of fertilizer manufacturers but also operating efficiency. The retention price formula penalizes low capacity utilization as well as high input consumption.

VIII. LESSONS LEARNED

8.01 Although the Project was ultimately implemented and achieved most of the original objectives successfully, several lessons have been learned from the problems the Project encountered during implementation. These problems caused a substantial change in Project scope as well as a 52-month delay in Project completion.

8.02 One important lesson was that a project involving a number of different types of subprojects should be designed to provide for a strong central coordination unit to undertake the responsibility for coordinating and implementing the subprojects. Particularly in countries where the decision making process is scattered and diverse, coordination at the Government level is key to successful implementation of projects. In fact, delays in Project implementation and changes in Project scope were mainly due to lack of coordination among concerned Government authorities which provide various approvals for subprojects in terms of scope, technology, economic viability, local fund allocations, and other aspects. The lack of coordination also made it difficult to determine alternative subprojects - 20 - timely for IDA consideration. If similar problems are anticipated for a future project, Government approval requirements and procedures should be closely assessed during appraisal, and, if necessary, practical assurances from the Governments should be obtained before the signing of loan (credit) agreement. These assurances also need to be supported by a responsible project coordination unit which is obligated to monitor, coordinate, and expedite the implementation of subprojects, particularly for sector/program credits with numerous smaller subprojects in countries with diversified decision making process.

8.03 The other important lesson learned from the Project was that the original concept of the Project could have worked out quite well if the Project had concentrated on a more limited number of relatively large subprojects. Throughout the implementation of the Project, it was almost impossible for the IDA project team to effectively maintain relationships with numerous subproject sponsors for the supervision of their respective components. Where a number of small subprojects are implemented under one project scope, frequent scope changes cannot be avoided. As nine original subprojects were dropped and replaced by 26 new subprojects, tremendous additional efforts had to be made by the IDA project team to follow up these changes. For a project with similar configuration, a typical sector loan appears more appropriate to handle. In this case, greater authority could be given to borrowers in implementing the overall program including the selection of subprojects based on agreed guidelines. Frequent revision of the legal documents also could be avoided.

8.04 Another lesson learned from the Project was that well established progress reporting should be incorporated in designing a project with a number of project sponsors, possibly by standardizing of the reporting format and contents. While direct project progress reporting by project sponsors is generally preferred as a means of maintaining direct communication with the beneficiaries, unstructured reporting from numerous beneficiaries makes it difficult to monitor individual subprojects systematically. Due to the lax description of reporting requirements, the progress reports submitted by the subproject sponsors differed to a large extent in terms of contents and details of subproject progress. Some reports did not even contain project related information at all. As a consequence, the supervision of the Project was not satisfactory, and the preparation of Project Completion Report (PCR) was delayed. Besides, the Borrower could not prepare its own PCR despite the specific guidance provided by the IDA project team well in advance of the completion of the Project in August 1982 and repeated request thereafter. Supervision workload could have been reduced tremendously if a good progress reporting system had been designed. - 21 -

INDIA - FERTILIZER INDUSTRY CRFDL?

PROJECT COMPLETION R.PORT

vI on of Proect ScoPe (Subprojects)

Plant Original Subproject lot Revision 2nd Revision 3rd Revision 4th Revision Comasy Lotation (December 197) (March 197S) (January 198) (June log0) (April [gat)

PCI/ Gorakhpur Boiltr/Power Set (25 MW) (Dropped) Amonta storage (Dropped) Sindri - Ammonia storage rCPal Trombay Boiler (170 TPH) Pollution control/testing -

Peedstock conversion - Phosphoric acid debottle nerhing - - AMP Plant Rehabilitation - KiCe/ Durgapur Boller/Power Set (12 M) Ammsonia Pump Modification - Ammonia Storage - Rerauni - Plant Modification - Ammonia Storage Nasrup - Plant Modifications Maurup/larauni - Carbaaste Pump Replacement Raldia - Ammonia Storage/Tank wagons

PDILM/ FDIL on-destructive Testing Eqpt.

NVLa/ Nangal Ammonia Storage - Ammonia Tank V PLC Meyvelt feedstock Conversion

ESC (SAIL) Rourkels Feedstock Conversion -

CSPC Baroda Purge Gas Recovery - Fluorine Recovery (Dropped) PMosphoric Acid Plant debottlenecking

HPCL Troebsy Refinery Debottlenecking (Dropped)

NFL Madras Urea Debottlenecking ( - ) Ammonia Process Control ( ) -iit/Pollution Control Ammonia Plant - Rehabilitation SPIC Tuticorin Prourin. Recovery (Dropped) Soda Ash/Ammonium Chloride Plant (Dropped) Purge Gas Recovery Ammonia Storage - Ammonia Plant Optic. Ammonia Optim. Study CPL Vitag Napatna Boiler/Power Set Pluorine Recovery (Dropped) ZAC Goa Ammonie Oabottlenecking - Ursa Plant Pollution Control Maintenance Crane (120 ton) IPCO Ralol - Ammonia Oebottlenerking Amine Guard - Purge 1e4 Recovery Oil Fired Boiler

Kanata Amonia Storage C 2 Compreeaor

GOI ICAER Fertilizer Demand Study - RITES Prtilier Transportation Study ASC Fertilizer Storage Study -

A/ PCI, the original sponsor of all PCI Poject componenrs, was split into the above five companies in late l979.

Industry Department "arch 19&6 - 22 - ANTEX 2-2

INDIA - FERTILIZER INDUSTRY CREDIT

PROJECT COMPLETION REPORT

Conparison of Project Cost and Credit Allocation

(in millions of U.S.dollars unless otherwise mentioned)

Project Cost Credit Allocation Project ------Company Plant Location Sub-project Completion Appraisal Actual Appraisal Actual

FCI Sorakpur Boiler Cancelled 23.5 - 10.8 - " Ammonia storage 20.5 - 9.1 - Sindri Ammonia storage Aug. 1982 - 3.4 - 2.2 RCF Tromboy Boiler Aug. 1977 12.9 9.0 8.5 8.0 Pollution control Jun. 1982 0.3 0.6 0.3 0.2 * Feedstock Conversion Feb. 1979 - 6.9 - 4.1 Phos. acid debottl. Jan. 1990 - 1.3 - 0.5 AP rehabilitation Jul. 1982 - 2.1 - 0.2 MFC Durgapur Boiler Sep. 1983 20.7 17.0 8.7 9.4 * Ammonia pump modif. 1983 - 0.6 - 0.4 Ammonia storage Jul. 1983 - 3.3 - 2.0 Barauni Plant Modification 1983 - 0.6 - 0.4 0 Ammonia storage Jun. 1983 - 3.6 - 2.2 Nasrup Plant modification Mar. 1983 2.1 - 1.4 Haldia Ammonia storage/tank Feb. 1983 8.2 - 5.1 NFL Nangal Ammonia storaqe/tank Jul. 1982 4.5 - 3.4 NLC Neyveli Feedstock conversion Jul. 1979 19.5 21.2 12.0 10.9 SAIL Rourkela Feedstock conversion Sep. 1979 26.1 22.4 15.5 16.2 8SFC Baroda Purge gas recovery End- 1979 11.3 10.5 5.3 0.4 Flourine recovery Cancelled 2.7 - 1.2 - Phos. acid debottl. 1979 6.6 6.6 2.5 4.1 HPCL Tromboy Refinery debottl. Cancelled 25.9 - 4.0 - NFL Madras Urea debottl. Cancelled 1.7 - 1.0 - 4 Ammonia debotti. 1979 - 0.8 - 0.5 SPIC Tuticorin Florine recovery Cancelled 2.7 - 1.3 - Soda ash plant Cancelled 43.5 - 12.7 - Purge gas recovery 1983 - 1.6 - 1.3 * Atmonia storage 1983 - 6.8 - 4.6 * Ammonia plant optim. May. 1982 - 0.8 0.5 CFL Visag Boiler End- 1980 3.0 3.1 1.0 1.7 s Fluorine recovery Cancelled 5.5 - 3.0 - ZAC Boa Ammonia debottl. Jun. 1982 7.2 9.9 4.0 8.1 Pollution control Jun. 1982 3.0 2.5 2.0 1.6 Crane Jun. 1982 - 1.2 - 0.8 IFFCO Kalol Ammonia sodi./debottl. 1980 - 10.0 - 4.9 4 C02 compressor 1984 - 3.3 - 2.3 Kandala Ammonia storage 1981 - 3.8 - 3.0 PDIL Testing equipments 1984 1.1 1.1 1.1 1.1 801 Three studies Completed 1.0 0.4 1.0 0.4

TOTAL 238.7 169.2 105.0 101.9 ===2x== 22=22 =z::=z=: 2=: - 23 -

Al"Ill 2-3 Ito2 I?1TIL1U1 DMTOW *OTULCTtpC "M00y

9F I .- i S ayP . ! e 33 13, -,e !A

72..,nen ______P44g k C..ooa I 0e198oss 11/84 196

A. f4lle ster I- frtit"e ad Cileat"I. Trs.,mtet. L%4, AT) Alloys - 1d4offess0 AS 4pi4the 78.0 37.4 32..7 3. Aulam - Cookie I 0r. - 112.0 1 1.8 Amb4.1.. - Cook$. it 1/I7 1 Asian. 40.0 ) 0.2 1027.7 134.1 107.# 2. 9.roflimse Corpentaim 03 ads (7021 derk"PSr - utte Fr8dem8 uro8 wpaottho 11,0 7M. .2. 83alrt - blow. AS, arle c04b/9e oil 219.0 118.6 12.1 021.9 Immorom.em - lam-r Prod4so oret Cost 2211.0 8.9 %$ 2.I 7.0 11.2 93. W81eser 21134 0r14 Cos1 221.0 41, 19,1 42.6 1 N- 2odeetea ftrtillaor corgzootso too. (AMc) baromo . 3th8, Pte, u9pth8 122.0 74.2 Emsse- 34.0 8890e0 0e phbtha 12.0 80,0 41,278.1 89.4WA 17.7117.7 nep - 4s.o Or." 84 b4t.2 0.8 197.0 104.9 200 8 4. Ebbr. Fortilt4 Ltd. (ImL) d usel - Ted1 9Mo. Ore. o9. In 04ht.0 174.0 124.0 115.0 121.1 13.4 S. Nottomol Portillmor Ltd. (ift) 11"Cisdo - tpjob 02 211.0 i2. ISO:, 1.0 438.4 small - hajo CA. .... 3 c3t4 /9l 042 212.0 170.4 1 16.0 IN.A - t rip - - eyen V. Fel Ott m11.0 til.1 I 41, , 83.0 &37.1 6. la9.1*t Lig.t0e Corp. (RC) 0429.1 - T783l 1146 0r-. ?-I Oil 70.0 45.2 45.3 $1.2 Wit 1114*T11 OWOUtri Mieecl ad Fertiliate Us. (MCF) 1'"Mmy - 8.h8.r..8rr Ur1.. W. AnP ma.3.r. G. 141.0 267.3 209. 277.8 264.8 f+ "Ie ANCIMPFICY of toil- Ltd-(U3Qk Amo3k.0 - Ort... CAl soplthboICA. 120.0 4 u6 se 1. u.a 13.4 10.0 22.1 89.7 6~~- Ug 08. 14.' 38.3 27.0 149 WWI; t 001t%. 2$i 2! 0.6t. 20.24, It 1,1.2 ?.0.3 9.811. 8901 29.06.8 1.624.2 1,599.4 1

I. privte et"

1. Corda.8d.l POW2011.r Ltd. (C9) Vises - 0A4h0r. Pradesh 8?. r.a. "1 Mosotho 64.0 71.1 61.0 71.5 73.3 2. 1S - Pery (0843e) Room1. - tentI ak 496 r8phth 1640 8.0 7.1 9.2 9.2 3. 04ja.t 3809.d. Volley erttliger Ltd. (0 ) Aoretit - 88a2-t 91.. Fe 042 271.0 2. 174.2 212.9 212.8

6. 88j1.1, nt*. 8t1t91228. C. (*10 ) t"". - Color" Dre., Ai, DuP 0ht3a/luteral 236.0 200.8 144.4 201.9 211.4 0.. S. soft f2tt0l8.1 Ltd. (M04) worewl - Otter ftl4088 A/Cl 68. 10.0 2.1 1.2 3,4 0.3

4. 284088 1904l.8.es Lge. (IML) laer - ft00r t0.48.0 Ot" 840to0. 210.0 202.0 22.9 221.8 2s.2 7. Momil-clmds hatal ed fertillmrs Ltd. (M|fL) Fmoosol - FAM"Clim Orms mosmil80 14, 18.8 97.2 104.2 134.0

I. je, 041est6 ff0t0liv, (9w) 04,8 1wrj&1 - Podjb 014 Pool 004 140 - - - 2.1 9. 001(94 fortitimf Coop. ISCM go"4 - b.Jeolem, gr.e Paphtm 152.0 121.1 141.4 132.7 2t.7

I0 S3or4 Ptrch881.3 18dw4t43e C0.1. (3IC) Ttteerto, - Toa21 84" of". ff. mrs .p82tu. 293.0 20.2 270.2 246.5 1)a.9 11. Tel lte. old steel Co. (TINC) Jawhoil", - 38.0 AN Coke 4.0 1.1 3.1 2,9 O.M.

82. C0. - 088 W1e. fp8t8 187.0 L4,m 72.3 lost9 11.1

To8l fr.1t Seet.o t,753. 4 .079.9 1,24 1,372.0 1,593.9 C. seemusime inctm 1. 14828 IVIMl t8. P*tt1ii COG,7.ti, (I99) 9s..1m/il.0 - G .jaro. ure , 19. On9 0t014 G8 260.0 2S5.1 277.3 21.0 3236 FINpA0 - Itel P748888 0-.. 04pbtm8 228. 103.2 1"A48 174.2 200.3

Tow4 co119.1.23. 6092|1 4do.0 8. _lo9 427.2 12.1

Total teal. 5.144.0 1,142.4 3.414,1 3,100.0 3.91Y.0

*f J. "td j subo4y 40 p-.4to s.etsr.

1 9nfort1i3lsr A.8t.a8t0 . of test. led 11.3stry of Chom81,l le .rti12.ar.

lod.1.y1mpr8m.t vAlrck 1986 - 24 - ANNEX 3-1

INDIA - FERTILIZER INDUSTRY CREDIT PROJECT COMPLETION REPORT

Disbursement Schedule for the Bank Loan (in US$ million)

Appraisal Estimate Actual Calendar Year (November 1975) (1985) and Quarter Disb. Cumul. % Disb. Cumul. %

1976 I 10.5 10.5 10.0 0.0 0.0 0.0 II 3.1 13.6 13.0 1.0 1.0 1.0 III 3.2 16.8 16.0 0.3 1.3 1.2 IV 4.2 21.0 20.0 0.5 1.8 1.8

1977 I 6.3 27.3 26.0 5.2 7.0 6.7 II 7.3 34.6 33.0 0.5 7.5 7.1 III 11.6 46.2 44.0 1.9 9.4 9.0 IV 11.6 57.8 55.0 2.1 11.5 11.0

1978 1 13.6 71.4 68.0 2.7 14.2 13.5 II 12.6 84.0 80.0 3.8 18.0 17.1 III 10.5 94.5 90.0 3.5 21.5 20.5 IV 10.5 105.0 100.0 4.0 25.5 24.3 1979 I 4.6 II 30.1 28.7 I 5.8 35.9 34.2 1.2 37.1 35.3 2.5 39.6 1980 I 37.7 II 11.4 51.0 48.6 111 9.0 CO - 15 IV 3.2 63.2 60.2 5.4 68.6 65.3 1981I I 6.6 76.4 72.8 III 7.6 83.6 79.6 IV 8.2 87.9 83.7 8.2 89.5 85.2 1982 1I 2.8 92.3 87.9 II 4.6 96.9 92.5 IV 2.1 99.0 94.3 0.9 99.9 95.1 1983 9I 1.3 101.2 96.4 0.7 101.9 97.0

* US$3.1 million cancelled

Industry Department March 1986 - 25 - ANNEX 5-1

INDIA - FERTILIZER INDUSTRY CREDIT PROJECT COMPLETION REPORT

Retention Price Formula

1. The retention price of fertilizers is calculated on the basis of the formula enunciated by the Marathe Committee in November 1977. The calculations are made for pricing periods for 3 years as follows:

(i) Share capital employed in urea production.

(ii) + Retained Earnings.

(iii) - Capital employed outside the business and accumulated surplus cash.

(iv) = Equity employed in line of business (a minimum level is maintained at paid-in share capital).

(v) 29.4% return on capital employed.

(vi) + Variable and fixed production costs at 80% capacity utilization related to fertilizer production, with depreciation as provided in the company balance sheet.

(vii) + Interest on short and long-term debt associated with urea production. In each successive block of 3 years, interest on long and short-term debt are considered equal to those of the middle year.

(viii) = Ex-factory revenue to producer.

(ix) = Production volume of fertilizer at 80% capacity utilization.

(x) = Unit Retention Price allowed.

2. While operating cost changes are reflected immediately, other parameters like capital employed and interest charges are only reassessed in intervals of three years. Fixed assets are not revalued each year, but recorded at historical costs.

Industry Department March 1986 - 26 -

ANNEX 5-2

INDIA- FERTILIZER INDUSTRY CREDIT

PROJECT CONPLETION REPORT

Comparison of Financial and Economic Rates of Return

FRR (%) ERR (%) Project ------Company Plant Location Sub-project Completion Appraisal Actual Appraisal Actual ------FCI Gorakpur Boiler Cancelled 14.0 - 22.0 - RSF Trosboy Boiler Aug. 1977 15.0 11.1 26.0 35.9 a Feedstock Conversion Feb. 1979 - 11.7 - n.a HFC Durgapur Boiler Sep. 1983 19.0 3.0 26.0 11.6 NLC Neyveli Feedstock conversion Jul. 1979 27.0 12.0 41.0 36.1 SAIL Rourkela Feedstock conversion Sep. 1979 15.0 1.5 33.0 12.6 GSFC Baroda Purge gas recovery End- 1979 33.0 11.5 41.0 44.6 " Flourine recovery Cancelled 30.0 - 21.0 - " Phos. acid debottl. 1979 47.0 12.0 40.0 36.1 HPCL Troeboy Refinery debotti. Cancelled 49.0 - 26.0 - NFL Madras Urea debottl. Cancelled 65.0 - 100.0 - Ammonia debottl. 1979 - 10.0 - 100.0 " Soda ash plant Cancelled 19.0 - 19.0 - CFL Visag Boiler End- 1980 80.0 10.5 70.0 63.6 " Fluorine recovery Cancelled 36.0 - 29.0 - ZAC Goa Amonia debotti. Jun. 1982 14.0 12.3 52.0 46.0 IFFCO Kalol Asonia modi./debottl. 1980 - 10.5 - n.8 - 27 -

INDIA - FERTILI2ER KsyTR caIrn

PIOJECT CO#PLCT 016081PORT

Summary of Financial Inforuation for Selected Sub-borrowers (In Re. gillon UUIIEs otherwise mentioned 1981182 19321/8 1983/84 1984/85 1. PCI Gross Sales Revenues 1,76A 2.497 1,214 1.267 Operating Profit (1.268) (807) (406) (41) Total Assets 5.263 6.413 11,286 11.172 Operating Profit/Sales (%1 (71.7) (32.3) (24.8) (13.9) Current Ratio (ties*) 1.4 2.1 1.5 1.8 Debt Service Coverage Ratio (M) 0.0 0.6 0.3 0.8 Debt/Equity Ratio 0:100 0:100 45:;5 4 5 : 2. RC? Cross Sales Revenues 2,4h1 2,S24 4,307 4,383 Operating Profit 188 179 492 410 Total Assets 5,7.) 7,591 LO,748 12,823 Operating Profit/Sales (1) 7.6 7.1 11.4 9.4 Current Ratio (ties.) 1.0 3.1 3.6 1.7 Debt Service Coverage Ratio (1) 1.8 1.2 1.3 3.5 Debt/Equity Ratio 36:64 40160 36:64 38:62 3. NFL Gross Sales Revenues 3.j97 1,160 4,198 3.790 Operattag Profit 383 346 253 418 Total Assete 6.97 6.900 5.029 5.310 Operating Profit/Sale. (1) 38.4 35.9 23.2 28.2 Current Ratio (tiems) M,0 3.9 1.2 2.7 Debt Service Coverage Ratio (2) 2.9 L.2 0.9 4.3 Debt/Equity Ratio 48:52 38:62 2674 23:77 4. NCL Grose Sales Revenues 322 496 467 382 Operating Profit 42 21 47 5 Total Assets - - - Operating Profit/Sales (1) 12.9 ?.7 10.1 1.2 Current Ratio (times) 70.0 b.8 8.2 4.2 Debt Service Coverage Ratio (2) 31.3 67.8 1,259.4 416.4 Dabt/Equity Ratio 2:98 O:I0 0:100 0:;0 5. NIL Gross Sales Revenues 1.61 1,120 1,724 - Operating Profit 49 141 63 Total Assets 895 1L3 705 - Operating Profit/Sales (t) 3.1 6.3 3.7 Current Ratio (times) 2.0 2.8 2.4 - Debt Service Coverage Ratio (M) 0.5 a/ 0.4 a/ 9.L - Debt/Equity Ratio 46:54 0:100 0:100 - 6. ZAC Gross Sales Revenues 929 1,146 1387 1,53 Operating Profit (15) 195 3)2 191 Total asa-ts 747 872 894 1,033 Operating Profit/Sales (1) 1.6 14.1 9.S 12.4 Current latio (times) 1 1.7 2.9 1.2 Debt Service Coverage Ratio (1) - - - Debt/Equity Ratio 35:65 217 27:73 26:74

7. SPIC Gres Sales Revenues 243 306 291 108 Operating Profit is 26 Is 36 Total Asseta 190 200 232 301 Operating Profit/Sales (t) 6.2 8.5 S.2 7.1 Current Ratio (ties.) 1.7 1.6 1.8 1.1 Debt Service Coverage Ratio (1) 2.2 1.7 1.4 3.7 Debt/Equity Ratio 81:31 72:26 53:47 42:58

8. IFPGO Gross UIes Revenues 4.484 5.146 5.379 7,468 Operating Profit 600 646 633 724 Totai Assets 5.220 6,164 6,520 7,872 Operating Profit/Sales (2) 13.4 12.6 it.8 9.7 Current Ratio (times) 3.0 2.7 2.1 2.2 Debt Service Coverage Ratio (1) 2.8 2.7 0.9 2.0 Debt/Equity Ratio 45/5 .43/57 34166 33/77

Industry Departeent March 1986 ANNEX 6-1

NDIA - F MILI7ZR INUUM CFWrr

FRQFL' Cflt'LrIGI RPOR

Historical Cnsumption, Production aid Imports of Fertilizers 1983/84 (in '000 tons of nutrients)

Nitrogen josphate Potash All Mitrlents Year Cons. Prod. J rt Cons. Prod. J t Cons. Prod. lport Cons. Prod. Import

1959/60 229 84 142 54 51 4 21 - 33 305 135 179 1960/61 212 112 399 53 54 - 29 - 20 294 166 419 1%1/62 250 154 307 60 65 - 28 - 75 338 219 382 1%2/63 333 194 244 83 88 10 36 - 41 452 282 285 1963/64 377 219 228 116 108 13 50 - 40 544 327 281 1%4/65 555 243 232 149 131 12 69 - 57 773 374 301 1965/66 575 238 326 132 119 14 77 - 73 785 357 413 1966/67 738 309 832 248 146 148 114 - 118 1,101 435 898 1%7/68 1,034 402 867 335 207 349 170 - 270 1,539 609 1,486 1968/69 1,209 563 844 382 213 138 170 - 213 1,761 776 1,195 1%9/70 1,356 730 667 416 224 94 210 - 120 1,980 954 881 1970/71 1,479 832 477 541 228 32 236 - 120 2,256 1,060 629 1971/72 1,798 949 481 558 290 248 300 - 268 2,657 1,239 997 1972/73 1,839 1,054 665 582 330 204 347 - 325 2,768 1,384 1,194 1973/74 1,829 1,050 659 650 324 213 360 - 370 2,839 1,374 1,242 1974/75 1,766 1,186 884 471 331 286 336 - 437 2,573 1,517 1,607 1975/76 2,149 1,535 996 467 320 361 278 - 278 2,894 1,855 1,635 1976/76 2,459 1,859 750 635 478 23 319 - 278 3,411 2,335 1,051 1977/78 2,913 2,000 358 867 690 164 506 - 599 4,286 2,670 1,521 1978/79 3,419 2,169 1,228 1,106 776 243 592 - 517 5,117 2,945 1,988 1979/80 3,498 2,226 1,295 1,151 1,763 237 606 - 473 5,255 2,988 2,005 1960/81 3,678 2,164 510 1,214 842 452 624 - 797 5,516 3,006 2,759 1981/82 4,069 3,143 1,055 1,322 950 343 676 - 644 6,067 4,093 2,042 1982/83 4,263 3,434 425 1,420 984 65 735 - 644 6,418 4,418 1,133 1983/84 6,236 3,487 656 1,757 1,057 143 799 - 556 7,792 4,544 1,345 1984/85 5,486 3,917 n.a. 1,886 1,318 n.a. 839 - n.a. 8,211 5,235 n.a.

Source: The Fertilizer Association of lndia (FAI).

Indsutry Department March 1986 s

Mia