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Journalism of Courage
NEW DELHI, December 13: Problems between contractors and leading public sector oil refineries have cost the country over Rs 2,150 crore as cost overruns in three major petroleum projects. These include the second phase of development of the Gandhar field by Oil and Natural Gas Corporation Ltd (ONGC), Kandla Bhatinda Pipeline by Indian Oil Corporation and Numaligarh refinery. The Ministry of Petroleum and Natural Gas has now directed all public sector companies to sort out problems in this regard to speed up the implementation of these projects.
The urgency in the Petroleum Ministry’s directive to PSUs comes in the wake of the pressure from the Prime Minister’s Office as a follow-up of last month’s review of the sector by the Prime Minister I K Gujral.
The Gandhar field development was originally estimated to cost Rs 1,245.6 crore. The latest estimate by the Petroleum Ministry last month show that this cost has now risen to Rs 1454.75 crore, nearly Rs 209 crore up from the original estimate. The Kandla Bhatinda pipeline is expected to cost Rs 2082 crore, up from the originally estimated cost of Rs 779 crore, an increase of over Rs 1,300 crore. The revised costs for the Numaligarh refinery are estimated to be in the region of Rs 2,500 crore according to latest estimates. These were originally pegged at Rs 1,830 crore, a cost overrun of Rs 670 crore.
Interestingly, all the projects have been held up owing to problems with the contractors and the sub-contractors. While the additional explanation for the delay in the implementation of the Kandla Bhatinda pipeline has been attributed to delays in design and detailed engineering works, problems in the procurement of materials, mobilisation and construction of pipeline and stations, execution of horizontal, directional drilling and problems in the tele-communications and tele-supervisory and instrumentation work.
Similarly, the Numaligarh Refinery has faced problems of cost and time overruns owing to the delay in the formation of the new company and the initial delay in the selection of foreign licensors.
