CBI Case against ONGC officials regarding Gas dehydration - Case back ground

Since the matter has been reported in the media with my name as one of the respondents, I feel it my responsibility to explain to my friends the background of the case.

Following a fire in the GAIL gas pipeline in Rajahmundhry, where several lives were lost, GAIL tried to transfer the blame to the quality of gas supplied by ONGC and after several meetings at MoPNG, ONGC was categorically conveyed that it will not be allowed to inject any of its gas in GAIL pipelines if the gas was not dehydrated to certain specifications. (Such stipulations did not exist earlier). ONGC had been losing its production worth crores of rupees every day and also was forced to flare substantial volumes of gas due to non-availability of gas evacuation routes (Since I do not have access to those files now, I am unable to give exact numbers). 

Rajahmundhry Asset was advised by me to quickly float a tender for installation of gas dehydration units. Similar tenders had not been floated earlier. I had also clearly mentioned two things - that the specifications should be generic to ensure maximum participation by bidders and strict observance of time lines as ONGC had been losing crores of rupees everyday. As such, the notice for tender stated clearly that time was of essence and tenders submission dates or work completion dates would not be extended. We also put severe penalty clauses, much beyond the standard Liquidated Damages clauses of ONGC, to ensure that the project gets completed in time and is operated with minimal shutdowns.

Nevertheless, just before the tender closing date, requests were received for extension of dates. Acknowledging the nature of work and the fact that this was being done for the first time, a strict one-time extension was agreed to with a clear message that no further extensions would be given. In spite of that before the revised closing date, requests were received from two of the bidders to extend the date again. I personally talked to the two bidders on phone to find out what was their actual status and to estimate whether they would be actually able to  submit bids if the date was extended again. To my dismay, I found that neither of them had done any work on this tender and they clearly told me to withdraw the penalty clauses, as with those clauses no one would ever bid. I tried to reason with them that the penalty is only for their non performance where ONGC would actually be losing money, so they should put in more serious efforts to ensure such situations did not arise. 

They did not agree, I too did not agree and we opened the tenders as scheduled, getting only one bid, where the rates were quite higher than our initial estimates. The tender approval fell under the jurisdiction of ONGC’s EPC, and the final proposal for award was put up to EPC. Just before the EPC meeting, I was called by the CVO, who said he had got message from a top bureaucrat to stop this tender, and if I did not do this, I could face problems, particularly since my retirement was near. I explained the background to him and finally said, that at stake are my Rs 10 lakh of gratuity vs crores of rupees every day of ONGC. Apparently, I can’t care less for my gratuity. 

Before the EPC began, I narrated this to the CMD. He asked whether I wanted to change my plans and I firmly said I wanted to go ahead, no matter what happens to me personally. The award was cleared by the EPC in few minutes and the MM team was advised by me personally to ensure that the notice of award is served to the winning bidder at the earliest, so that the vested interests do not get time to take a stay from a court and stall our project. This was duly done.

The job was completed almost in time. For the little delay, the contractor was charged penalty as per the tender conditions. (His repeated requests for waiver on many grounds were rejected without any leniency.)

I still firmly believe that all actions and decisions I took were the best that one could take under those conditions. When CBI asked me, I told them clearly that given the same conditions again, I would take the same decisions again, no matter what they or anyone else says.

I once again would like to convey to my friends and well wishers that all these actions and decisions were solely for the benefit of ONGC and no personal gratification of any kind was involved at all. I also appreciate my team of Rajahmundhry Asset and MM section, which completed this difficult work in time in a challenging environment. 

I would also request all ONGCians to be firm in their resolve to withstand pressures from contractors and bureaucrats and foil attempts of the contractors to delay ONGC projects on one pretext or the other – we see almost al the projects of ONGC are delayed inordinately due to tactics deployed by unscrupulous bidders and contractors. (Please remember the oath we take every year – If I have to do some thing, I will do it, if I have to stop something, I will stop it)

Satyamev Jayate! Jai Hind!!