NOTE:- This was wrtten in early part of A.D. 1970 and published in the April 1970 issue of my employer's house journal then known as GBJHP News.
A new method of improving the soil bearing capacity is being employed at Haldia. This is the sandwicking process about which many have heard and are consequently curious about it. What follows is an attempt at explaining it to the layman.
As you all know, every structure needs a foundation. These foundations are placed on the ground. When the ground is strong as in the case of rock, very heavy structures can be placed on it without any elaborate foundations; whereas when it consists of a weak soil, costly foundations have to be provided.
The soil at Haldia is very weak. It can not support a load of more than half to one kilogram per square centimetre in most places. In such soils, we usually provide pile foundations. Piles are made of concrete, wood, metal etc. Concrete is however the most popular material for piles. These piles are driven into the ground till they refuse to go anymore. Then on top of a number of liles, a concrete "cap" is cast. On the pile cap, the structure is built. The piles provide strong foundations and do not permit any appreciable settlement of the structure founded on them. They are however a costly business. Therefore, whenever we can avoid them, we naturally try to do so. While equipment foundations do not tolerate any settlement, our storage tanks can take a certain amount of settlement, though not as much as one metre which is the expected settlement of untreated soil at Haldia as per a recent soil survey. Thus we can avoid piling under storage tanks and sandwicking which takes care of most of this settlement in advance appears to be a good solution. We hope to save about Rs. three and a half crores by adopting sandwicking.
The process of sandwicking is as follows :-
First, a hole is made into the ground with the help of a small drilling rig similar to ones used for making small bore wells. The sandwick which is a long and narrow jute hosepipe (about 80 m.m. in diameter) is then inserted in this hole. Such sandwicks are placed at an interval of two and a half metres both ways under the tank foundations. the ground is then "loaded" with sand. A heap of sand of pre-determined height is made over the foundations. The weight of this sand is equal to 100 % to 150% of the maximum load of the tank. As you know water is heavier than oil. Therefore the tank carries its heaviest load when it is filled with water during testing for leaks etc. This is the condition taken into account while determining the height of the sand heap. The heap of sand is allowed to remain in place for a period varying from 12 to 17 weeks. This is called preloading. During this period, an interesting phenomenon takes place. The ground under the heap of sand begins to settle. How does this happen ?
The soil consists of a number of layers of different materials. Some layers are pervious i.e. they allow passage of water and some do not in other words, they are impervious. The sandwick penetrates through both pervious and impervious layers. All these layers contain water particles. Due to preloading the water is sqeezed out and the sandwick (made from specially selected coarse variety unlike the sand used for preloading which can be of even fine variety) provides a channel for carrying away the water particles from the soil by capillary action. As the water is squeezed out, the soil contracts in the same way as when a ROSSOGULLA is squeezed. If the sandwicking is not done, the tanks would keep on settling down for a long period of time, giving perpetual headaches to our maintenance people. By adopting this process, we are allowing the settlement in advance and in a short period. We are also avoiding another scourge of the maintenance staff. This is one of an uneven settlement, causing the tank to tilt sideways and spill some of its contents. The bearing capacity of the soil is improved uniformly under the tank and it can take greater loads than before.
In the case of tanks of smaller diameter, what we do is to drive the sandwicks and prepare tank pad consisting of earth or fine sand of about the same height as the expected settlement. On this the tank itself is is erected and gradually filled with water. This is called hydraulic preloading. Here also, the preload is kept for 12 to 17 weeks during which the settlement takes place. The settlement is measured by means of settlement stakes. The water is then gradually pumped out. In the case of sand preloading also, the sand is removed after 90 % of the full settlement has taken place. This sand is now taken to another tank foundation and used there for prelosding. To minimise the quantity of preloading sand, a ring like a fortress made up of sand bags is built around the peripherry of the tank foundation and sand is then filled in this fortress. The preloading sand heaps' slopes would have hindered work in adjoining areas. As you know Haldia site has difficult access to it and bringing a huge quantity of sand to the site would have posed more problems. Sandbag walls have helped to save about 20% of the preloading sand.
You would be interested to know that the sandwicking process has been developed by an Indian engineer and besides Haldia, it is also being used inthe salt lake area of Calcutta (Kolkata).
Friday, October 21, 2011
Tuesday, October 11, 2011
Sunday, October 9, 2011
SHOULD WE BUILD TOWNSHIPS ?
NOTE
This was written for my employer's house journal. It was published in September 1971 issue of GBJHP NEWS of the Refineries & Pipelines Division of Indian Oil Corporation Ltd. The Editor's comments on this piece are given below.
EDITOR'S COMMENTS :- Shri R N Desai is the one for asking inconvenient questions. But he knows how to get away with them, with the magic that he weaves with his words around the swift stabs of his hard, cold facts. His views may be challenged by both "the Management" and "the Unions". So, let it be. The columns of GBJHP NEWS are open to all.
SHOULD WE BUILD TOWNSHIPS ?
A question like this is bound to shake fellow Civil Engineers if not others as well. In these days of Science and Technology however, we have to constantly question ourselves whether what we have been traditionally doing continues to be right in a given set of circumstances.
I do not know the cost of other townships in the GBJHP family (GBJHP was an acronym used for Gauhati, Barauni, Jawaharnagar, Haldia refineries and Pipelines). Our own Haldia township is however estimated to cost Rs. 2.5 Crores for a total of 730 residential units of various types with the attendent facilities. This gives an average cost of Rs. 34200/- per unit.
Townships have been criticised as a drag on the public sector finances. a capital of Rs.2.5 Crores blocked in the townships involves us in interest charges of Rs.22.5 lakhs per year. Add to this the maintenance cost at the rate of 1 per cent of the capital. This amounts to another Rs.2.5 lakhs p.a. Add the salaries of the maintenance staff and overheads. The total recurring expenditure excluding depreciation, would exceed Rs. 27 lakhs.
Divide this amount by the number of employees accommodated to give you an expenditure of Rs. 3700/- p.a. or Rs. 310/- per month per employee. No doubt, the employees pay rent but the average rent could be taken to be only Rs. 30/- p.m. In other words, our Company subsidises us to the extent of Rs. 280/- p.m. in the matter of housing. Do we count this blessing when we recount our woes ?
My aim in writing this article, is however not to extol the munificence of the management. The point that arises is whether we can afford it. Must be, since we are still making profits ! But isn't there some way by which we can cut down on this expenditure apart from saving Rs. 2.5 Crores for productive invesiment elsewhere ?
The distinguished scientist-cum-industrialist -cum- lately turned government servant, Dr. Vikram Sarabhai has pointed out that every public sector enterprise must determine the mainstream of its activities and concentrate on it. Our mainstream of activities is obviously refining and selling oil. Should not every paisa available to us for investment be put in this mainstream ?
The question that comes up next is, how are we to house our employees ? The answer is simple. Let them live in their own houses ! It was already shown in an earlier article ( How not to lose Rs. 750/- p.m. ? published in March-April 1971 issue ) how advantageous it is for an individual to build his own residence. But where is the initial capital to come from ? Obviously, the employees barring a few, can not invest their money in building houses even if they have the necessary amount. The money must come from organizations whose mainstream of activities is to lend money. The LIC and the nationalized banks already have a scheme in this regard. For those of us who have put in more than six years of service, our Company has already decided to give 80 % of the cost of a house as a loan.
The instalments for the repayment of the loan would be heavy - on an average about Rs. 295/- p.m. and beyond the reach of most employees. But then can the Company not spend a part of the subsidy of Rs. 280/- p.m. that it is now spending on house rent allowances ? Say, Rs. 265/- p.m. could be paid as HRA which together with Rs. 30/- p.m. would make Rs. 295/- p.m. In any case, we have rules by which house rent allowance is paid to the employees who stay in their own houses.
What would be the Company's role in this scheme of things ? The Company would have to act as a catalyst. It would acquire the land, develop it, prepare a town plan, build roads,water, sewer and power lines, divide the land into plots and lease them out to the employees. Proportionate cost of these common services would be charged to the employees. It would initially run the municipal services and later hand over this function to a committee of employees. The Company would also build public buildings such as hospitals, schools, clubs, cinemas etc. out of welfare funds. A few quarters would have to be built for the small number of construction personnel coming to the site. These would later, be utilized for the small percentage of employees who are subject to transfers. Space would also have to be left in the township for later entrants who replace personnel retiring from service.
If we ponder further over this matter, it should be possible to make out a scheme that is mutually advantageous to the Company as well as the employees.To summarise, the advantages of adopting this scheme are as follows :-
1) The Company sticks to the mainstream of its activities. A capital of Rs. 2.5 Crores would be released for increasing the refinery capacity.
2) Recurring expenditure of Rs. 27 lakhs per year apart from depreciation could be reduced.
3) Every employee would be a house owner. He would have a stake in the refinery. He would become more responsible as he would have been exposed to a sort of entrepreneurship.
It would obviously not be possible to change the scheme of things already decided upon in the case of Haldia Refinery except for any further quarters that we may require for expansion. We could, however, give a thought to this matter for our future requirements and formulate a scheme as a sort of pilot project for the next refinery that comes up.
This is one small way in which we can put into practice democratic socialism that many are talking about !
The article ends here
The Editor in a footnote added as follows :-
IT IS A MATTER OF RS. 8 CRORES AND MORE
The bare cost of building the refinery townships at Gauhati, Barauni and Jawaharnagar adds upto over Rs. 551 Lakhs plus. The breakdown of the total cost in respect of the three townships and the number of units that the said cost represents is given below :-
Gauhati - Rs. 150 Lakhs for 641 units
Barauni - Rs. 295 Lakhs for 1487 units
Jawaharnagar - Rs. 106 Lakhs for only 932 units the refinery has.
The cost of additional units and that representing additional related expenditure has not been included in the above figures.
xxxxxxxxxxxx
As anticipated, a Letter to the Editor arrived and was published in the Nov.-Dec.1971 issue of the same journal. It is preceded by the Editor's comment on it.
Editor's Comment :- By many accounts, Shri R N Desai is the most - read writer of the GBJHP family. Here is some further testimony, but of a kind which may not be relished by the ever-growing tribe of Desai fans.
xxxxxxxxxxx
A LETTER
OUT CIVIL ENGINEERS ? EH !
DEAR SIR,
I was grossly amused to read Mr. Desai's seeming homily on building townships.... er... I mean not building them. On reading it, I was reminded of the story of Kalidasa, the ancient poet, who was one day found sitting pretty on the branch of a tree and merrily hacking away at it where it forked - apparently oblivious of his imminent peril. Unless of course, mr. desai is training his eyes on a cushy job in the Planning Commission, i do not know why he should deal such a heavy blow to his own tribe. An unfortunate band that finds its role shrinking in this bouncing Oil Industry - a Chairman from the clan notwithstanding. ( An allusion to the fact that our then Chairman Mr. Ramabrahmam was a civil engineer.)
Mr. Desai must have meant it as a joke. How else could he - a brilliant mind that he is - overlook these points. The township planned at Haldia at a total cost of Rs. 250 Lakhs is meant for 600 refinery personnel and 130 (approx.) from Marketing, Pipelines, Excise etc. Since people from the last named departments and about 100 from refinery will be holding prospect of frequent transfers, houses for them will have to be built by the Company. Now the division of capital expenditure on township is Rs. 207 Lakhs and Rs. 43 Lakhs for others.
The estimated expenditure of Rs. 207 Lakhs includes the cost of a hospital, a school, a club, a community centre and a guest house, totalling nearly Rs. 20 Lakhs. As the author suggests that these social amenities should be provided by the Company, I also excluded them from my computation. Hence for housing 600 personnel of the refinery, the Company is spending about Rs. 187 Lakhs. Since 100 persons out of that 600 will be transferred in and out, it leaves us with us with the housing problem of 500 only who can be given the benefit of Mr. Desai's revolutionary idea. Let us examine it in detail.
The unproductive expenditure on the houses and ancillaries construction for 500 stationary personnel at Haldia Township will be 5/6 x 187 = Rs. 152 Lakhs (say). The payback period of the refinery has been worked out to be 8 years. If this amount of Rs.152 Lakhs is to be paid back in 8 years, we will illustrate position after the 4th year to get an idea of the average yearly commitment of the Company on this score.
Position in the 5th year
1. Repayment instalment 152/8 = 19 Lakhs
2.Interest @ 9 % on half
the capital as the other
half has already been paid 152/2 x 0.09 = 7.86 Lakhs
3.Maintenance @ 1.5 %
including the
emoluments of the maintenance
personnel 152 x 0.015 = 2.28 Lakhs
4.Land rentals for 45 acres 0.81/29.95 Lakhs
Less return as rent @ Rs.30
per month per capita for 500
persons only 1.81/28.15 Lakhs
TOTAL ( say ) Rs. 28 Lakhs
Mr. Desai recommends in the name of democratic socialism that Company should subsidize @ Rs. 255 per month per capita. That works out to a yearly burden of 500 x 12 x 250 (say) = Rs. 15 Lakhs on which there is no return. Deducting this amount from the average yearly commitment as worked out earlier, we find that the Company is spending nearly Rs. 13 Lakhs on 500 employees for their accommodation for the first 8 years only. The commitment adds upto 104 Lakhs in 8 years' time. This amount of Rs. 13 Lakhs is equal to only one day's production of the refinery whose sale receipts for the first year is estimated to be Rs. 36 Crores. Now an expenditure of less than 0.5 % of the annual turnover on housing is negligible.
But the latent returns in the form of better industrial climate and higher productivity as a result of conducive environmental psychology is incomputable. Who can say that the sparkling and consistent performance of our boys at Baroda (reference is to our refinery at Jawaharnagar at Baroda or Vadodara in Gujarat) has not been due to the wonderful living conditions at their township. In one single year, they earned enough profit to pay back the initial cost of their township 5 times over. ( Figures in the Editor's footnote above indicate that the cost of Jawaharnagar township per residential unit was the lowest !)
Now back to calculations. After the 8th year, the Company is spending nothing, except may be the amount it would have earned as interest on the extra 104 Lakhs it has spent over preceding eight years towards employees' accommodation. from 9th year onwards the Company would be saving an amount of Rs. 6 Lakhs (15.00 - 9.00) by building its own township, expenditure on land rentals and maintenance expenses being offset by rent collected. That is by 25th year, she (it) would have wiped out the unproductive initial investment of Rs. 104 Lakhs and thence in comparison, mr. desai's idea would be a constant drain on the Company's resources, with added headaches in finding new plots of land, developing, leasing out to employees (and the attendent troubles) etc. once in nearly every 20 years. And finally mr. Desai props up his figures by a tangential reference to depreciation on which he does not dwell elaborately, leaving the reader to make his own guess. Here is the catch.
Only in his last article, he had shown us how we were losing Rs. 750 p.m. by not building a house. The burden of his article was the innocent assumption that a property in an urban area appreciates to 10 times its initial value in twenty years' time. That way the township in Haldia (which is destined to become a major port city) now being built at a cost of Rs. 2.5 Crores will be worth 25 crores in 20 years' time, a favourable element which i have kept out of my calculations.
Now, come Mr. Desai, "Heads I win and tails you lose" is too old a gimmick to carry even temporary conviction. Your facts are quite cold but unfortunatrly they are not hard enough.
Yours etc.
An Admirer
(Some Admirer - Ed.)
xxxxxxxxxxxxxxxxx
My response to the Admirer's letter to the Editor
OUT CIVIL ENGINEERS ? EH !
Dear Sir.
I have read with interest the letter with the above caption from " An Admirer " (sic). The 'Admirer' appears to have shed a lot of tears on behalf of Civil Engineers. This would lead one to believe that he is one of that tribe. It seems however that the tears have been wasted.
The Civil Engineer was once likened to a donkey by a former chief of mine - himself a Civil Engineer. Donkeys, he used to say, are the beasts of burden and till the advent of mechanized transport, did a lot of carriage work for the Civil Engineer. A Civil Engineer's status, in the old days therefore, was measured by the number of donkeys working on his site. His main reson for the analogy however, was that the Civil Engineer, like the donkey, could be kicked by anyone - even by a housewife. And like the donkey, he remains insensitive to any kicking or flogging. To him, it is just one of the routines of life. He plods along his own way, come hail or high wind. If a donkey is a happy animal, a Civil Engineer is a happy human. He becomes either a crook or a philosopher. (Even in our Company, he either gets retrenched - with full benefits to be sure - or he becomes the Chairman. God, my former chief used to say, does not worry himself over only two species - the donkey and the Civil Engineer !
Some would agree with this statement on the assumption that the Civil Engineer would, like the brother-in-law of a king, make himself comfortable for himself, even if assigned to count sea - waves ! (Apparently he stopped all fishing and shipping in the area as it interfered with his royal duty of counting sea - waves. For any exceptions that he made, he charged personal levies. Our present day royal hangers-on have found any number of reasons for personal levies !) .
Frivolity apart, I do not agree that employment of Civil Engineers would decrease by adoption of the scheme suggested in ' SHOULD WE BUILD TOWNSHIPS '. It may even increase. How ? Well, it is a CIvil Engineer's secret ! When winds of change blow, it is wise to bend rather than get uprooted. The ingenious Civil Engineer will, I am sure, bend and find a way.
Coming to the statistics quoted by my admiring Confucius (or is it Confusius ?), he deducts the figure of Rs. 15 Lakhs p.a. from the recurring cost of Rs. 28 lakhs p.a. Actually, these costs are mutually exclusive, being comparative. If I take into account depreciation, the annual recurring costs would be 28 + 250/20= 28+12.17 = 40.17 Lakhs p.a. as against rs. 15 Lakhs p.a. in the form of house rent allowance to the employees, making my scheme even more attractive. There is thus no catch anywhere. Even if as statistically contended, the Company could make up the investment in 25 years' time, there are perpetual headaches in maintenance, allotments etc. which are much more troublesome than finding additional land space once in 20 years.
Thus the the contention that the total extra expenditure is only Rs. 104 Lakhs is not correct. The extra expenditure is Rs. 25.17 Lakhs per year which in 8 years' time, would, amount to Rs. 201.36 Lakhs. To wipe out this amount of Rs. 201.36 Lakhs, it would take infinite number of years ! The interest charges on this amount alone would be Rs. 18 Lakhs as against a house rent allowance of rs. 15 lakhs per year.
Finally, the ' Admirer ' is afraid of the Company is afraid of the company losing the increment in the value of the township over a period of years. To this, the question is - Will or can the Company sell the township ? Will or can the Company raise the rents ? No, it would not even if it could. And the value of a property is judged by these factors. However for the individual employee, the value would increase as he has no such limitations. Hasn't someone said about something being good for the goose not being necessarily so for the gander ?
---R N Desai
P.S. :- Isn't it a good thing for all concerned that the "Admirer" has refrained from saying whom or what he is admiring ?
xxxxxxxxxxxxxxxxxxxxxxxx
EPILOGUE
It is 40 years since the above was written. Following my own advice, I had built a house then for myself on a 5000 Sq.Ft. plot costing a total of Rs. 42000/- (Forty two thousand only) at Vadodara in Gujarat. Today, I am told that it can be sold for Rs.1,50,00,000/- (One Crore and fifty Lakhs only) . The Company did not accept my scheme (of not building townships) due perhaps to the then existing mind set. I do not know what is the position in other Indian Oil townships but I am told that about 400 quarters are lying vacant in the Jawaharnagar township at Vadodara (Baroda) in Gujarat. They are not known to have been sold. A large number of employees have built their own houses and have an experience similar to mine. Many out of towners and even Non-Gujaratis among the employees have built or bought houses/flats here. In general, all over India, a house building spree is still on. Civil Engineers, once almost wholly dependent on the government/public sector for jobs, after a short period of glut, are today in great demand again in both public and private sector as judged by the rush for admissions to Civil Engineering discipline.
This was written for my employer's house journal. It was published in September 1971 issue of GBJHP NEWS of the Refineries & Pipelines Division of Indian Oil Corporation Ltd. The Editor's comments on this piece are given below.
EDITOR'S COMMENTS :- Shri R N Desai is the one for asking inconvenient questions. But he knows how to get away with them, with the magic that he weaves with his words around the swift stabs of his hard, cold facts. His views may be challenged by both "the Management" and "the Unions". So, let it be. The columns of GBJHP NEWS are open to all.
SHOULD WE BUILD TOWNSHIPS ?
A question like this is bound to shake fellow Civil Engineers if not others as well. In these days of Science and Technology however, we have to constantly question ourselves whether what we have been traditionally doing continues to be right in a given set of circumstances.
I do not know the cost of other townships in the GBJHP family (GBJHP was an acronym used for Gauhati, Barauni, Jawaharnagar, Haldia refineries and Pipelines). Our own Haldia township is however estimated to cost Rs. 2.5 Crores for a total of 730 residential units of various types with the attendent facilities. This gives an average cost of Rs. 34200/- per unit.
Townships have been criticised as a drag on the public sector finances. a capital of Rs.2.5 Crores blocked in the townships involves us in interest charges of Rs.22.5 lakhs per year. Add to this the maintenance cost at the rate of 1 per cent of the capital. This amounts to another Rs.2.5 lakhs p.a. Add the salaries of the maintenance staff and overheads. The total recurring expenditure excluding depreciation, would exceed Rs. 27 lakhs.
Divide this amount by the number of employees accommodated to give you an expenditure of Rs. 3700/- p.a. or Rs. 310/- per month per employee. No doubt, the employees pay rent but the average rent could be taken to be only Rs. 30/- p.m. In other words, our Company subsidises us to the extent of Rs. 280/- p.m. in the matter of housing. Do we count this blessing when we recount our woes ?
My aim in writing this article, is however not to extol the munificence of the management. The point that arises is whether we can afford it. Must be, since we are still making profits ! But isn't there some way by which we can cut down on this expenditure apart from saving Rs. 2.5 Crores for productive invesiment elsewhere ?
The distinguished scientist-cum-industrialist -cum- lately turned government servant, Dr. Vikram Sarabhai has pointed out that every public sector enterprise must determine the mainstream of its activities and concentrate on it. Our mainstream of activities is obviously refining and selling oil. Should not every paisa available to us for investment be put in this mainstream ?
The question that comes up next is, how are we to house our employees ? The answer is simple. Let them live in their own houses ! It was already shown in an earlier article ( How not to lose Rs. 750/- p.m. ? published in March-April 1971 issue ) how advantageous it is for an individual to build his own residence. But where is the initial capital to come from ? Obviously, the employees barring a few, can not invest their money in building houses even if they have the necessary amount. The money must come from organizations whose mainstream of activities is to lend money. The LIC and the nationalized banks already have a scheme in this regard. For those of us who have put in more than six years of service, our Company has already decided to give 80 % of the cost of a house as a loan.
The instalments for the repayment of the loan would be heavy - on an average about Rs. 295/- p.m. and beyond the reach of most employees. But then can the Company not spend a part of the subsidy of Rs. 280/- p.m. that it is now spending on house rent allowances ? Say, Rs. 265/- p.m. could be paid as HRA which together with Rs. 30/- p.m. would make Rs. 295/- p.m. In any case, we have rules by which house rent allowance is paid to the employees who stay in their own houses.
What would be the Company's role in this scheme of things ? The Company would have to act as a catalyst. It would acquire the land, develop it, prepare a town plan, build roads,water, sewer and power lines, divide the land into plots and lease them out to the employees. Proportionate cost of these common services would be charged to the employees. It would initially run the municipal services and later hand over this function to a committee of employees. The Company would also build public buildings such as hospitals, schools, clubs, cinemas etc. out of welfare funds. A few quarters would have to be built for the small number of construction personnel coming to the site. These would later, be utilized for the small percentage of employees who are subject to transfers. Space would also have to be left in the township for later entrants who replace personnel retiring from service.
If we ponder further over this matter, it should be possible to make out a scheme that is mutually advantageous to the Company as well as the employees.To summarise, the advantages of adopting this scheme are as follows :-
1) The Company sticks to the mainstream of its activities. A capital of Rs. 2.5 Crores would be released for increasing the refinery capacity.
2) Recurring expenditure of Rs. 27 lakhs per year apart from depreciation could be reduced.
3) Every employee would be a house owner. He would have a stake in the refinery. He would become more responsible as he would have been exposed to a sort of entrepreneurship.
It would obviously not be possible to change the scheme of things already decided upon in the case of Haldia Refinery except for any further quarters that we may require for expansion. We could, however, give a thought to this matter for our future requirements and formulate a scheme as a sort of pilot project for the next refinery that comes up.
This is one small way in which we can put into practice democratic socialism that many are talking about !
The article ends here
The Editor in a footnote added as follows :-
IT IS A MATTER OF RS. 8 CRORES AND MORE
The bare cost of building the refinery townships at Gauhati, Barauni and Jawaharnagar adds upto over Rs. 551 Lakhs plus. The breakdown of the total cost in respect of the three townships and the number of units that the said cost represents is given below :-
Gauhati - Rs. 150 Lakhs for 641 units
Barauni - Rs. 295 Lakhs for 1487 units
Jawaharnagar - Rs. 106 Lakhs for only 932 units the refinery has.
The cost of additional units and that representing additional related expenditure has not been included in the above figures.
xxxxxxxxxxxx
As anticipated, a Letter to the Editor arrived and was published in the Nov.-Dec.1971 issue of the same journal. It is preceded by the Editor's comment on it.
Editor's Comment :- By many accounts, Shri R N Desai is the most - read writer of the GBJHP family. Here is some further testimony, but of a kind which may not be relished by the ever-growing tribe of Desai fans.
xxxxxxxxxxx
A LETTER
OUT CIVIL ENGINEERS ? EH !
DEAR SIR,
I was grossly amused to read Mr. Desai's seeming homily on building townships.... er... I mean not building them. On reading it, I was reminded of the story of Kalidasa, the ancient poet, who was one day found sitting pretty on the branch of a tree and merrily hacking away at it where it forked - apparently oblivious of his imminent peril. Unless of course, mr. desai is training his eyes on a cushy job in the Planning Commission, i do not know why he should deal such a heavy blow to his own tribe. An unfortunate band that finds its role shrinking in this bouncing Oil Industry - a Chairman from the clan notwithstanding. ( An allusion to the fact that our then Chairman Mr. Ramabrahmam was a civil engineer.)
Mr. Desai must have meant it as a joke. How else could he - a brilliant mind that he is - overlook these points. The township planned at Haldia at a total cost of Rs. 250 Lakhs is meant for 600 refinery personnel and 130 (approx.) from Marketing, Pipelines, Excise etc. Since people from the last named departments and about 100 from refinery will be holding prospect of frequent transfers, houses for them will have to be built by the Company. Now the division of capital expenditure on township is Rs. 207 Lakhs and Rs. 43 Lakhs for others.
The estimated expenditure of Rs. 207 Lakhs includes the cost of a hospital, a school, a club, a community centre and a guest house, totalling nearly Rs. 20 Lakhs. As the author suggests that these social amenities should be provided by the Company, I also excluded them from my computation. Hence for housing 600 personnel of the refinery, the Company is spending about Rs. 187 Lakhs. Since 100 persons out of that 600 will be transferred in and out, it leaves us with us with the housing problem of 500 only who can be given the benefit of Mr. Desai's revolutionary idea. Let us examine it in detail.
The unproductive expenditure on the houses and ancillaries construction for 500 stationary personnel at Haldia Township will be 5/6 x 187 = Rs. 152 Lakhs (say). The payback period of the refinery has been worked out to be 8 years. If this amount of Rs.152 Lakhs is to be paid back in 8 years, we will illustrate position after the 4th year to get an idea of the average yearly commitment of the Company on this score.
Position in the 5th year
1. Repayment instalment 152/8 = 19 Lakhs
2.Interest @ 9 % on half
the capital as the other
half has already been paid 152/2 x 0.09 = 7.86 Lakhs
3.Maintenance @ 1.5 %
including the
emoluments of the maintenance
personnel 152 x 0.015 = 2.28 Lakhs
4.Land rentals for 45 acres 0.81/29.95 Lakhs
Less return as rent @ Rs.30
per month per capita for 500
persons only 1.81/28.15 Lakhs
TOTAL ( say ) Rs. 28 Lakhs
Mr. Desai recommends in the name of democratic socialism that Company should subsidize @ Rs. 255 per month per capita. That works out to a yearly burden of 500 x 12 x 250 (say) = Rs. 15 Lakhs on which there is no return. Deducting this amount from the average yearly commitment as worked out earlier, we find that the Company is spending nearly Rs. 13 Lakhs on 500 employees for their accommodation for the first 8 years only. The commitment adds upto 104 Lakhs in 8 years' time. This amount of Rs. 13 Lakhs is equal to only one day's production of the refinery whose sale receipts for the first year is estimated to be Rs. 36 Crores. Now an expenditure of less than 0.5 % of the annual turnover on housing is negligible.
But the latent returns in the form of better industrial climate and higher productivity as a result of conducive environmental psychology is incomputable. Who can say that the sparkling and consistent performance of our boys at Baroda (reference is to our refinery at Jawaharnagar at Baroda or Vadodara in Gujarat) has not been due to the wonderful living conditions at their township. In one single year, they earned enough profit to pay back the initial cost of their township 5 times over. ( Figures in the Editor's footnote above indicate that the cost of Jawaharnagar township per residential unit was the lowest !)
Now back to calculations. After the 8th year, the Company is spending nothing, except may be the amount it would have earned as interest on the extra 104 Lakhs it has spent over preceding eight years towards employees' accommodation. from 9th year onwards the Company would be saving an amount of Rs. 6 Lakhs (15.00 - 9.00) by building its own township, expenditure on land rentals and maintenance expenses being offset by rent collected. That is by 25th year, she (it) would have wiped out the unproductive initial investment of Rs. 104 Lakhs and thence in comparison, mr. desai's idea would be a constant drain on the Company's resources, with added headaches in finding new plots of land, developing, leasing out to employees (and the attendent troubles) etc. once in nearly every 20 years. And finally mr. Desai props up his figures by a tangential reference to depreciation on which he does not dwell elaborately, leaving the reader to make his own guess. Here is the catch.
Only in his last article, he had shown us how we were losing Rs. 750 p.m. by not building a house. The burden of his article was the innocent assumption that a property in an urban area appreciates to 10 times its initial value in twenty years' time. That way the township in Haldia (which is destined to become a major port city) now being built at a cost of Rs. 2.5 Crores will be worth 25 crores in 20 years' time, a favourable element which i have kept out of my calculations.
Now, come Mr. Desai, "Heads I win and tails you lose" is too old a gimmick to carry even temporary conviction. Your facts are quite cold but unfortunatrly they are not hard enough.
Yours etc.
An Admirer
(Some Admirer - Ed.)
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My response to the Admirer's letter to the Editor
OUT CIVIL ENGINEERS ? EH !
Dear Sir.
I have read with interest the letter with the above caption from " An Admirer " (sic). The 'Admirer' appears to have shed a lot of tears on behalf of Civil Engineers. This would lead one to believe that he is one of that tribe. It seems however that the tears have been wasted.
The Civil Engineer was once likened to a donkey by a former chief of mine - himself a Civil Engineer. Donkeys, he used to say, are the beasts of burden and till the advent of mechanized transport, did a lot of carriage work for the Civil Engineer. A Civil Engineer's status, in the old days therefore, was measured by the number of donkeys working on his site. His main reson for the analogy however, was that the Civil Engineer, like the donkey, could be kicked by anyone - even by a housewife. And like the donkey, he remains insensitive to any kicking or flogging. To him, it is just one of the routines of life. He plods along his own way, come hail or high wind. If a donkey is a happy animal, a Civil Engineer is a happy human. He becomes either a crook or a philosopher. (Even in our Company, he either gets retrenched - with full benefits to be sure - or he becomes the Chairman. God, my former chief used to say, does not worry himself over only two species - the donkey and the Civil Engineer !
Some would agree with this statement on the assumption that the Civil Engineer would, like the brother-in-law of a king, make himself comfortable for himself, even if assigned to count sea - waves ! (Apparently he stopped all fishing and shipping in the area as it interfered with his royal duty of counting sea - waves. For any exceptions that he made, he charged personal levies. Our present day royal hangers-on have found any number of reasons for personal levies !) .
Frivolity apart, I do not agree that employment of Civil Engineers would decrease by adoption of the scheme suggested in ' SHOULD WE BUILD TOWNSHIPS '. It may even increase. How ? Well, it is a CIvil Engineer's secret ! When winds of change blow, it is wise to bend rather than get uprooted. The ingenious Civil Engineer will, I am sure, bend and find a way.
Coming to the statistics quoted by my admiring Confucius (or is it Confusius ?), he deducts the figure of Rs. 15 Lakhs p.a. from the recurring cost of Rs. 28 lakhs p.a. Actually, these costs are mutually exclusive, being comparative. If I take into account depreciation, the annual recurring costs would be 28 + 250/20= 28+12.17 = 40.17 Lakhs p.a. as against rs. 15 Lakhs p.a. in the form of house rent allowance to the employees, making my scheme even more attractive. There is thus no catch anywhere. Even if as statistically contended, the Company could make up the investment in 25 years' time, there are perpetual headaches in maintenance, allotments etc. which are much more troublesome than finding additional land space once in 20 years.
Thus the the contention that the total extra expenditure is only Rs. 104 Lakhs is not correct. The extra expenditure is Rs. 25.17 Lakhs per year which in 8 years' time, would, amount to Rs. 201.36 Lakhs. To wipe out this amount of Rs. 201.36 Lakhs, it would take infinite number of years ! The interest charges on this amount alone would be Rs. 18 Lakhs as against a house rent allowance of rs. 15 lakhs per year.
Finally, the ' Admirer ' is afraid of the Company is afraid of the company losing the increment in the value of the township over a period of years. To this, the question is - Will or can the Company sell the township ? Will or can the Company raise the rents ? No, it would not even if it could. And the value of a property is judged by these factors. However for the individual employee, the value would increase as he has no such limitations. Hasn't someone said about something being good for the goose not being necessarily so for the gander ?
---R N Desai
P.S. :- Isn't it a good thing for all concerned that the "Admirer" has refrained from saying whom or what he is admiring ?
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EPILOGUE
It is 40 years since the above was written. Following my own advice, I had built a house then for myself on a 5000 Sq.Ft. plot costing a total of Rs. 42000/- (Forty two thousand only) at Vadodara in Gujarat. Today, I am told that it can be sold for Rs.1,50,00,000/- (One Crore and fifty Lakhs only) . The Company did not accept my scheme (of not building townships) due perhaps to the then existing mind set. I do not know what is the position in other Indian Oil townships but I am told that about 400 quarters are lying vacant in the Jawaharnagar township at Vadodara (Baroda) in Gujarat. They are not known to have been sold. A large number of employees have built their own houses and have an experience similar to mine. Many out of towners and even Non-Gujaratis among the employees have built or bought houses/flats here. In general, all over India, a house building spree is still on. Civil Engineers, once almost wholly dependent on the government/public sector for jobs, after a short period of glut, are today in great demand again in both public and private sector as judged by the rush for admissions to Civil Engineering discipline.
Sunday, October 2, 2011
RESURRECTION OF TAMRALIPTA
NOTE :- This article was published perhaps in the inaugural issue of Haldia Refinery News or soon thereafter. It records the dreams of planners of those days. Maybe, now is the time to take a stock of the situation by interviewing the various stakeholders to find out if the dreams were fulfilled. I hope that someone would do it in a dispassionate manner for our future learnings.
RESURRECTION OF TAMRALIPTA
SIXTH DECEMBER 1969 will carve out for itself a place in the annals of the socio-economic history of West Bengal, nay of India. On this memorable day, the foundation stone was laid by Hon. Dr. Triguna Sen, Minister of Petrleum,& Chemicals. Mines and Metals, Government of India at Haldia for the construction of a most complex refinery under the Indian Oil Corporation Limited.
Till recently, Haldia was a typical Indian village but now, it holds out a promise of great economic and industrial re-awakening to the people not only of West Bengal but also to the entire India. Haldia Refinery Project is a public sector oil refinery fully owned by the Government of India that is by the people of India.
The first refinery in the public sector was commissioned on !st January 1962 at Gauhati for processing 0.75 million tonnes of indigenous crude oil with Rumanian assistance. In 1964, the second refinery was built at Barauni in the state of Bihar for processing 2 million tonnes of crude oil from Assam oil fields with Soviet Union's assistance.. The third refinery was built at Jawaharnagar in Gujarat in 1966 for processing 3 million tonnes of Ankleshwar crude oil, again with Soviet assistance.
Haldia refinery is the fourth link in the chain of oil refineries owned and operated by Indian Oil Corporation Ltd. When Haldia refinery goes on stream, we shall be processing 2.5 million tonnes of crude oil which will be imported from the Aghajhari oil fields of Iran. The initial capacity of 2.5 million tonnes per annum will be expanded to 3.5 million tonnes in the foreseeable future. Haldia Refinery will mainly produce Cooking gas, Naphtha, Petrol, Solvent Mineral Oil, Aviation fuel, Kerosene, High Speed Diesel, Jute Batching Oil, Lubricating Oil, Furnace Oil, Bitumen and various grades of Paraffin and Micro-crystalline Waxes.
KEROSENE FOR THE JANATA AND LPG FOR THE ELITE
When a villager will light a lamp in his humble hut, a housewife will burn a Janata stove to cook meals for the family, a doctor will drive a car to attend to a patient, a modern miss will bake a cake in her gas oven or a farmer will run his diesel pump to irrigate his fields - they all will remember the refiners of Haldia. We, at Haldia will be happy to contribute our mite to make the nation self-reliant. Like individuals, only a self-reliant nation can be strong and happy. Has not Cicero said ? " Most happy is he, who is self-reliant and who centres all his requirements on himself alone. " As stated elsewhere, we shall be procuring 70 % of the equipment required for the construction of the refinery, from indigenous sources. This sets a fine example for other projects. " Is example nothing ?" said Burke, " It is everything. Example is the school of mankind and they will learn at no other. " So we shall be helping the nation in our own humble way by trying to be self-sufficient and self-reliant.
HALDIA - THE HARBINGER
This is not all. As the Hon. Minister for Petroleum & Chemicals, Mines and Metals said, " Haldia refinery when completed will certainly act as a harbinger of rapid development of the state (West Bengal) in all fields including agriculture and industry." The production of fuel oil as mentioned elsewhere, will be 1.53 lakh tonnes per year. This product will be utilised for producing nitrogenous fertilizers. The Government of India has already taken a decision and necessary initial steps to set up a big fertilizer complex adjacent to our refinery at Haldia with an annual production of 1.65 lakh tonnes of Urea, 3.6 lakh tonnes of nitrogenous phosphate and 60,000 tonnes of Soda Ash. There are other promising features as well. While on one hand, the refinery will produce certain specified products for consumption, on the other, it can provide feed stocks to Petrochemicals industries under the present day technology for manufacture of downstream items like man-made fibres, pesticides, dyestuffs, pharmaceuticals, plastics, synthetic rubber etc.
There is actually a two-way process. Whereas we shall be feeding our products to other industries, we shall require materials and other services from others for which ancillary industries in the public/private sector are expected to come up in this area. Thus with the advent of Haldia Refinery, a host of other industries will come up in Haldia Region. As is welknown, for a long time, west Bengal has been a one city state since all the industries had been centred in and around Calcutta. After independence, the Government of India have set up a number of heavy and other industries in the Durgapur-Asansol region with a view to relieve congestion in Calcutta. The Haldia complex will be the third industrial area in west Bengal. The difference between the Durgapur-Asansol belt and Haldia complex will be that the latter is served by a major port and is therefore expected to become a swinging metropolis on the lines of Calcutta, Bombay and Madras in course of time. It will in fact, be better than the above metros since it is being planned de novo.
WE ARE ALL CO-PARTNERS
An effort on this scale naturally calls for certain sacrifices on our part. We are sure that the people from this area who will naturally have to bear the brunt of these sacrifices and who would ultimately stand to gain, would not mind a temporary dislocation in their normal way of life. In due course of time, everyone of us will be a co-partner in this effort of national reconstruction. The ultimate good that will come out of this temporary dislocation will far outweigh the disadvantages now being faced.
We are therefore proud that we are taking part in the regeneration of this area which had, inthe long bygone days, had been a flourishing trade centre served by a busy port known as TAMRALIPTA, the present day Tamluk.
RESURRECTION OF TAMRALIPTA
SIXTH DECEMBER 1969 will carve out for itself a place in the annals of the socio-economic history of West Bengal, nay of India. On this memorable day, the foundation stone was laid by Hon. Dr. Triguna Sen, Minister of Petrleum,& Chemicals. Mines and Metals, Government of India at Haldia for the construction of a most complex refinery under the Indian Oil Corporation Limited.
Till recently, Haldia was a typical Indian village but now, it holds out a promise of great economic and industrial re-awakening to the people not only of West Bengal but also to the entire India. Haldia Refinery Project is a public sector oil refinery fully owned by the Government of India that is by the people of India.
The first refinery in the public sector was commissioned on !st January 1962 at Gauhati for processing 0.75 million tonnes of indigenous crude oil with Rumanian assistance. In 1964, the second refinery was built at Barauni in the state of Bihar for processing 2 million tonnes of crude oil from Assam oil fields with Soviet Union's assistance.. The third refinery was built at Jawaharnagar in Gujarat in 1966 for processing 3 million tonnes of Ankleshwar crude oil, again with Soviet assistance.
Haldia refinery is the fourth link in the chain of oil refineries owned and operated by Indian Oil Corporation Ltd. When Haldia refinery goes on stream, we shall be processing 2.5 million tonnes of crude oil which will be imported from the Aghajhari oil fields of Iran. The initial capacity of 2.5 million tonnes per annum will be expanded to 3.5 million tonnes in the foreseeable future. Haldia Refinery will mainly produce Cooking gas, Naphtha, Petrol, Solvent Mineral Oil, Aviation fuel, Kerosene, High Speed Diesel, Jute Batching Oil, Lubricating Oil, Furnace Oil, Bitumen and various grades of Paraffin and Micro-crystalline Waxes.
KEROSENE FOR THE JANATA AND LPG FOR THE ELITE
When a villager will light a lamp in his humble hut, a housewife will burn a Janata stove to cook meals for the family, a doctor will drive a car to attend to a patient, a modern miss will bake a cake in her gas oven or a farmer will run his diesel pump to irrigate his fields - they all will remember the refiners of Haldia. We, at Haldia will be happy to contribute our mite to make the nation self-reliant. Like individuals, only a self-reliant nation can be strong and happy. Has not Cicero said ? " Most happy is he, who is self-reliant and who centres all his requirements on himself alone. " As stated elsewhere, we shall be procuring 70 % of the equipment required for the construction of the refinery, from indigenous sources. This sets a fine example for other projects. " Is example nothing ?" said Burke, " It is everything. Example is the school of mankind and they will learn at no other. " So we shall be helping the nation in our own humble way by trying to be self-sufficient and self-reliant.
HALDIA - THE HARBINGER
This is not all. As the Hon. Minister for Petroleum & Chemicals, Mines and Metals said, " Haldia refinery when completed will certainly act as a harbinger of rapid development of the state (West Bengal) in all fields including agriculture and industry." The production of fuel oil as mentioned elsewhere, will be 1.53 lakh tonnes per year. This product will be utilised for producing nitrogenous fertilizers. The Government of India has already taken a decision and necessary initial steps to set up a big fertilizer complex adjacent to our refinery at Haldia with an annual production of 1.65 lakh tonnes of Urea, 3.6 lakh tonnes of nitrogenous phosphate and 60,000 tonnes of Soda Ash. There are other promising features as well. While on one hand, the refinery will produce certain specified products for consumption, on the other, it can provide feed stocks to Petrochemicals industries under the present day technology for manufacture of downstream items like man-made fibres, pesticides, dyestuffs, pharmaceuticals, plastics, synthetic rubber etc.
There is actually a two-way process. Whereas we shall be feeding our products to other industries, we shall require materials and other services from others for which ancillary industries in the public/private sector are expected to come up in this area. Thus with the advent of Haldia Refinery, a host of other industries will come up in Haldia Region. As is welknown, for a long time, west Bengal has been a one city state since all the industries had been centred in and around Calcutta. After independence, the Government of India have set up a number of heavy and other industries in the Durgapur-Asansol region with a view to relieve congestion in Calcutta. The Haldia complex will be the third industrial area in west Bengal. The difference between the Durgapur-Asansol belt and Haldia complex will be that the latter is served by a major port and is therefore expected to become a swinging metropolis on the lines of Calcutta, Bombay and Madras in course of time. It will in fact, be better than the above metros since it is being planned de novo.
WE ARE ALL CO-PARTNERS
An effort on this scale naturally calls for certain sacrifices on our part. We are sure that the people from this area who will naturally have to bear the brunt of these sacrifices and who would ultimately stand to gain, would not mind a temporary dislocation in their normal way of life. In due course of time, everyone of us will be a co-partner in this effort of national reconstruction. The ultimate good that will come out of this temporary dislocation will far outweigh the disadvantages now being faced.
We are therefore proud that we are taking part in the regeneration of this area which had, inthe long bygone days, had been a flourishing trade centre served by a busy port known as TAMRALIPTA, the present day Tamluk.
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