IndianOil Reports: The case for relocation of Balasore Bottling Plant

In May 1985, I returned from Leeds. The class-room part of the mid-career MBA programme, followed by the written examinations, was over. I was entitled to five months’ paid leave to complete my dissertation. Nevertheless, I joined back on active duty to avoid missing out on a challenging career opportunity.

I had received my promotion orders in Leeds, with posting as Chief LPG Manager, Eastern Region. This was a Head of Department position, and I was the first in my batch of Management Trainees to get this. Moreover, LPG marketing was the ‘hot’ subject: on one hand, the market was being expanded at a furious pace and on the other hand, everyone from the Chairman downwards was deluged with customer complaints. Earlier in the year, it had been decided to carve out an independent LPG Department, integrating the relevant functions: sales, supply & distribution, accounting, operations & maintenance, systems, materials, customer service and safety. The HOD seat in the Eastern Region was kept open for my return but another five months’ absence would have led to someone else being posted. So instead of 150 days, I had 150 late evenings to research and write my dissertation.

Even now, LPG is not available for free sale in India. Besides water and electricity, LPG is the only product delivered into the customers’ premises. Unlike any other delivered product, LPG came in returnable containers. This posed a highly complicated challenge in operations, logistics, accounting and safety. The market expansion was driven by increasing production from refineries and fractionators, and the marketing companies are responsible from the delivery point of the production plant onwards. The first bottleneck was bulk transportation, and next came bottling (cylinder filling) capacity. The Union Government had approved a major plan to construct new bottling plants all over the country, and true to style, there were any number of progress reviews by people in the power structure, right up to the minister.

The plant at Balasore was delayed because of problems in land acquisition. Most of the land had been acquired but some owners were holding out, and these plots were scattered. I went down to the State capital, Bhuvaneswar, and met with the concerned Secretaries; they could not offer any ready solution. Studying the map, I discovered that the land earmarked for the plant falls within the municipal limits, next to a residential township.

Less than two years’ back in October 1983, the bottling plant at Shakurbasti, located within Delhi’s municipal area, had been devastated by an accidental fire; thousands of stored cylinders had exploded, spraying splinters all around. This happened early morning on a Sunday and consequently, there were few casualties. Walking around the site afterwards, I felt a drag on my feet as if I was walking on a sandy beach; looking down, I saw that all the stone chips used in the driveways were loose and shining bright because the asphalt had vaporized in the tremendous heat. The Prime Minister, Mrs. Gandhi had reportedly asked why such a hazardous facility had been constructed within municipal limits; the answer was that the municipality had expanded beyond the plant.

The Government appointed a committee chaired by R Vasudevan, Joint Secretary, to examine all issues on LPG safety. The committee’s report had been accepted as policy, and there was constant monitoring on implementation of each recommendation. One of the obvious recommendations was that no plant is to be built in municipal areas, and wherever necessary, existing plants were to be closed down and relocated away from residential areas.

Given this background, I decided on the spot to cancel the allotted site and requested for alternatives. The State officials promptly responded and offered a site several kilometers away from Balasore town, on the National Highway. I agreed, and formal documentation was initiated. Travelling back by the night train, I felt satisfied with a good job done.

Next morning, it was a different story in the office. My boss, the Regional Manager, had already come to know that instead of sorting out the problems related to the allotted site, I had gone and selected a new site altogether. Obviously, the project would be further delayed. I argued that the project was getting delayed at the allotted site, and in any case, it was an unsafe site by the standards set by the Vasudevan Committee. This added fuel to the fire because the earlier site was selected by a team of my peers from the Region and the Head Office, and they did not take kindly to my observation. The Regional Manager was smart enough not to take sides on a dispute involving safety, and washed his hands off by reporting to the Head Office that the plant was going to be delayed because of the decision taken unilaterally by the HOD.

After a week or so, there was a message from the Head Office asking me to attend the next review meeting chaired by the Minister and explain my decision. So I went to New Delhi, entered Shastri Bhavan for the first time, and knocked on the door of the concerned Joint Secretary, Arvind Varma who looked at me with undisguised sympathy! The Head Office team was present in full force, led by the big boss, Director (Marketing); none of them would look me in the eye or smile while saying good morning.

The time came and we all trooped into the Minister’s office. There was no seat for me in the IOC corner (this was a review of all the marketing companies), and I grabbed a chair elsewhere. Balasore was the first item on the agenda. The minister looked at the IOC team and asked: what’s this problem at Belasur? He was told that the concerned officer would personally explain the reason for additional delay.

I explained. No interruption, no interjection. Silence. The Minister looked at the Secretary, GV Ramkrishna who said that I had done the right thing. The Minister said that he also thought so. Instantly, my bosses vied with each other to tell the Minister that they had always thought so. I sat through the rest of the meeting, had tea, thanked the Secretary and walked out, alone.