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INDUSTRIAL ECONOMIST
Cover Story

The initial big strike at Bombay High… The proximity of Gujarat and Maharashtra to the source of production, was a great boon. The states built in quick time large capacity fertilizer, petro-chemical and power plants based on gas and also used gas effectively for a variety of other industries.
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KG GAS - a fair share for south. IE organized a seminar on 19 December on the subject of the southern states making use of the elegance, economics and the eco-friendly nature of gas as a prime source of energy and as a feedstock for urea.
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The way forward…
There was welcome consensus on the urgency to make use of the large production of natural gas from the KG Basin.
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Inklings

KG Gas – promise of plenty: When we launched IE 41 years ago, we pledged to focus on balanced economic development of the different regions.
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Editor's Notes

Case for southern chief ministers to work together...
Activate the zonal and inter-state councils
Unstable equilibrium…
CII partnership summit returns to Chennai
‘Yellow Peas Dhal’ only at Rs. 26 per kg...
Chennai, the beautiful…
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Banking

Banking in Sikkim:
spreading slowly...For a population of 5.40 lakh, Sikkim has 73 bank branches.
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Politics

The lesson from Telangana and other regional movements need to provide greater autonomy for local and regional bodies.
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Interview

Sharad Pawar: We are not sitting idle on the price rise issue
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SAIL Chairman Roongta estimates Indian crude steel production to cross 100 mn tonnes over the next five years from the current level of 55 mn tonnes...
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COPU chairman K C Deo: Virtual loot in NHAI
more...
Uday Shankar - CEO, Star India: Cable industry continues to be medieval in this country
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Macro Economics

Economy & markets: outlook 2010. India:
will we have NICE?
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Energy

Shale Gas: The biggest energy innovation of the decade. Why has India failed again?
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Capital Notes

TATA Nano going places
TCS
lone bidder for UK pension scheme
Deutsche bank
top foreign banks investing in India
HUL,
threatened by royalties from parent
More on autos -
VW goes aggressive
more...

Commentary

Expatriate workers: Notification on expatriate workers hits steel projects
more...

Highway

A third of all highway
projects stuck in arbitration
more...

Marketing

Soaps & detergents: HUL arrests market share decline
more...

History: Durgapur - fifty years ago


A voice from the past – beyond the oblivion.

Durgapur, perhaps the only steel plant in the modern era, was born without a feasibility study or detailed project report! Sir Eric Coates’ recommendation became the feasibility report. Vendor catalogues and offers papered together as part of Coates’ report served as the detailed project report.

I was part of the team that created Durgapur Steel Plant, saw through its construction and witnessed its inauguration.

It was on a late winter afternoon, 26 December, 1959, President Dr. Rajendra Prasad symbolically pushed a lever that started a loud siren. Hot metal flowed out of blast furnace No.l (Sharada Devi). A group of engineers and workmen, including S R Mitra, C S N Raju, Y S Bhat, M F Mehta, P G lyengar and C R Srinivasan, saw the lava flowing out, clapped and wiped their tears of joy.

Across the road, near the power house, under a small shamiana were seated President Rajendra Prasad and other dignataries, including Minister of Steel and Industries, Swaran Singh, British High Commissioner Mac-Donald, Steel Secretary
S Bhoothalingam, West Bengal Governor Padmaja Naidu, Hindustan Steel Chairman G Pande, General Manager, K Sen and Indian Steel Consortium (ISCON) representatives.

An uninspiring speech...

At the inauguration, Dr. Rajendra Prasad merely read out an uninspiring speech, written by a Delhi bureaucrat (some of us expected Rajendra Prasad to speak in Bengali but we were disappointed, He had spoken in chaste Bengali at the Calcutta University convocation a few months earlier). The crowd consisted mostly of construction workers, people from nearby villages, the British technicians and a small number of Durgapur Steel employees. Indian and British journalists all over were talking and interviewing people. Television cameramen were jostling through the crowd seeking vantage positions (My wife who was seated with families of friends got a Pelican pen stuck in her hair). Unmindful of the bustle around a few farmers were cutting crops between pig-casting machines and the oxygen plant.

Outside the plant boundary a hoarding announced the names of thirteen British companies (Lucky thirteen) who were members of ISCON which was constituted to build the Durgapur Steel Plant.

Taking you through history…

Dating back to the post-Second World War times, the then Labour Government of Britain nationalised the steel industry. With the nationalisation came rationalisation, unyeilding and unprofitable steel plants were weeded out. The British engineering industry, shattered by the war, tried to limp back to health. However, their hopes were ruined as the government did not envisage any new steel plant.

It was at this time that India's Minister of Steel T T Krishnamachari grabbed offers to build greenfield steel plants by West Germany and Soviet Russia. Not to be outwitted, Britain offered financial and technical assistance to build a new one million tonne steel plant in India. Tatas had been working on their two million tonne expansion at Jamshedpur. Indian Iron and Steel Company tried to beat out their old plant in Burnpur to a million tonne capacity with World Bank aid.

Without a feasibility report or DPR...

A team of Colombo Plan (an aid programme for Commonwealth countries), under the chairmanship of Sir Eric Coates, surveyed four sites in Eastern India, two near Sindri, one near the present Bokaro and Durgapur on the river Damodar. The team zeroed in on Durgapur, thanks to the vision of Dr. B C Roy, the then West Bengal Chief Minister, and the robust rapport he enjoyed with Jawaharlal Nehru.

Durgapur, perhaps the only steel plant in modern period, was born without a feasibility study or detailed project report! Sir Eric Coates' recommendation became the feasibility report. Vendor catalogues and offers papered together as part of Coates' report, served as the detailed project report! The consortium approach of construction management was an innovation (one does not know how much truth was there in the rumour that a modern steel plant waiting to be built in the north of England was shipped to India). An anomaly was that the International Construction Company (ICC) consultants to the Indian Government, were also consultants to the British consortium and its thirteenth member- a case of hunting with the hounds and running with the hares.

When re-rollers made a killing!

Durgapur's product-mix was heavily loaded in favour of railway requirements. But even before the wheel and axle plant went on stream, Railways decided to put up a wheel plant in Bangalore. Steel sleepers were being replaced by concrete sleepers. Some market survey, this! The rest of the product-mix were longs-billets, blooms and bars and commercial sections sold at uneconomical prices, to re-rollers, an unscrupulous class. The re-rollers made heavy profits and in that bargain brought a bad name to Durgapur.

Raw materials remained a constant worry - coal with high ash content and ore with maximum insolubles. The assumption that the leftovers from the mill would serve as pedigree scrap to feed alloy steel producers was never put to test. One of the three blast furnaces was to produce solely foundry grade pig iron.

A sure prescription for certain suicide…

Piles of dirty, foul smelling files...

The worst stab was the work-culture of Durgapur or the lack of it. The entire administration was manned by pan-chewing, dhoti-clad babus of taluk offices of West Bengal. They scurried from one building the other with endless piles of dirty, foul smelling files, most of which were never opened. The efficiency of these babus was measured by the number of files they carried or by their weight. The Tottenham system of East India Company remained strong. There were so many of them that the Nissen huts and tubular structures (temporary office building) were literally splitting at the seams. It was no accident. It was in fact a deliberate policy of the project head to give jobs to local people. Surprisingly, K Sen, one of the senior-most ICS officers of West Bengal Government was quite at home with them and spent hours in their company.

A few days after my joining, I sought a meeting with Sen. In his spotless Oxford accent he spoke to me for half-an-hour with veiled reference to my lack of knowledge of Bengali. After the meeting, I stood up and extended my hand. He jumped: "you don't shake hands with your General Manager and particularly with a senior ICS officer."

I decided to live down my private sector ecletic background.

The early recruitment for the plant's ground staff was solely from villages covered by the steel plant and the sprawling township. Two Congressmen, Anand Gopal Mukherjee and Lavanya Ghatak, sent slips of brownish yellow papers to the Recruitment Department which were implicitly accepted and persons mentioned in the paper slips were given jobs. Heads of Technical Departments were primarily those aged between 58 and 65, retired from Tata Iron and Steel plant or spewed out of Indian Iron. The middle level plant supervisory staff consisted mostly of the dead wood of Indian Iron.

The bright graduate engineers...

The saving grace was the highly efficient and competent force of graduate engineers and graduate officers recruited centrally through competitive examinations. A majority of these engineers were from Bengal Engineering College and Jadhavpur University, some from IITs, BHU and few also from well known colleges from the south. But they were not enough in number to form even a cricket team.

The graduate engineers were given training in steel plants and vendor organizations in the USA, UK and Australia (one engineer was also sent to Canada). The training in the USA under the INSTEP program was quite effective as they worked hands-on with the plant engineers, sweating and dirtying their clothes. At the end of the training, each of them was presented with the encyclopaedic volume- The Making and Shaping of Steel, published by the US Steel Corporation. The training in Australia was on par with that at the US, all of them were trained in one company-Broken Hill Proprietory Company's steel plants. Training in the UK left much to be desired. Indian engineers were not allowed to handle any equipment, the colonial hangover seemed to have had an impact.

Despite the sad state of affairs, Durgapur remained the best laid-out steel plant when compared to Rourkela, Bhilai and Burnpur. When you took a walk, in the night, from the plant stores to coke ovens with rolling mills on the left and blast furnaces on the right, it would be a breath-taking sight, with subdued roar of blast furnaces and power house and the clanging of overhead cranes and rolling mills. The illumination was brilliant.

Then came the deluge...

It came in two forms. One,when all sections of the plant were commissioned, the technical parameters for each of them were put to test. Most of them buckled down. As Bhilai tried to demonstrate higher capacity utilization and better technological application, ISCON, the British consortium, got the jitters. D J Bell, who was CEO of ISCON, was pulled out and made General Superintendent of the Plant. (General Superintendent of those days was equal to General Manager (Works) of today and one step below Managing Director.)

D J Bell was a daredevil and a bulldozer. He had two aides, Asst. General Superintendents, Davies and Hoskins. Bell made many variations and brought out changes in some operation regimes.

P C Neogi succeeded K Sen as General Manager. A civil engineer of the Indian Railway Engineering Service, Neogi retired as General Manager of RDSO. He was able to understand plant problems.

Neogi was phlegmatic and did not inspire those who worked under him. When his term ended, Steel Minister C Subramaniampinch-forked D J Bell to the position of General Manager. There was dissent and murmur all over. Uma Neogi, wife of P C Neogi, wrote to President S Radhakrishnan. But, Subramaniam had his way. Bell was General Manager for nearly three years.

Collapse of coke oven...

When Bell's term ended R K Chatterjee became the General Manager. A Mechanical Engineer of Jhadhavpur University, Chatterjee was out and out a Burnpur product. A pipe smoking, healthy looking Chatterjee was in his late forties or early fifties. He was considered an expert in rolling mill operation. As he was the first insider to climb to the general manager's post there was warm welcome.

When his appointment papers went to Finance Minister T T Krishnamachari, the minister put a dissenting note : ‘I understand he is a good technical expert. I wonder whether he would be able to shoulder the responsibilities of a General Manager.’ It was the post-Nehru period. Lal Bahadur Shastri was the Prime Minister and he could not say 'No' to Atulya Ghosh who backed Chatterjee.

When Chatteriee was hardly one year in office, one of the batteries of coke ovens collapsed. It sent tremors in steel industry circles. Simon Craves had a good reputation and built similar batteries in India.

A committee under the chairmanship of G Pande, the first Chairman of Hindustan Steel, probed the coke oven fiasco. The Commission relied heavily on the report of Suku Sen, a coke oven expert and a former general manager of Bhilai.

Dr D K Dutta, Chief of Coke Ovens, had to go. One after another several technological failures surfaced.

The axe fell on R K Chatterjee. He went to court. He lost the position but not the job. A N Banerjee, General Manager of Rourkela who was just then promoted as deputy chairman following the retirement of M S Rao, became Resident Director of Durgapur as well. Three hats at one time!

On hindsight everyone felt R K Chatterjee was more sinned against than sinning. D J Bell who flogged the plant beyond capacity escaped the blame and was happily settled in England and enjoyed the retirement benefits of a top British company's CEO. The British government knighted him. D J Bell became Sir Douglas J Bell. That was the end of the second East India Company and exit of Warren Hastings!

The red riot...

The second deluge was red. With the Communist government coming to power in West Bengal and Jyoti Basu assuming office as chief minister, the CITU became very powerful at Durgapur and elsewhere in West Bengal. The INTUC union under Anand Gopal Mukherji was never strong.

The CITU received lot of party support from outside. They mounted demands over several issues threatening violence. They laid siege around offices and did not allow their officers to come out, starved them and humiliated them. This form of compulsion was called gherao and this Bengali word slipped into the English vocabulary as a form of trade union tactic.
Executive morale touched the lowest bottom. Some of them feared for their lives. Families became panicky.

The unbridled gherao movement of CITU led to the exodus of executives. Gresham's Law operated and the earliest to go out were the best brains. They migrated to other steel plants, other industries and other countries, particularly to the US.

Durgapur became emasculated. Production suffered. The serious challenge before Durgapur was the industrial unrest.

The government thought a strong outsider would be able to tackle this growing menace. Maj. General Wadhera from Pune Army Staff College was brought in as Director-in-Charge of Durgapur Steel Plant. (All this time R K Chatterjee held the post of General Manager). Wadhera could not establish any rapport with officers and workers of the plant. He did not even attempt it seriously. He frequently visited New Delhi and Ranchi where the Head Office of Hindustan Steel was situated.

When the director’s hair cut cost the company Rs 12,000

Once I saw him with his leather briefcase on left shoulder and his right hand holding it walking along the Directors' corridor. I hailed him and asked him how was he there when the Chairman was not in town. He laughed. "Srini, the barber in Ranchi Railway Hotel gives me the real army cut and trim. The Durgapur chap every time asks for a job for one cousin or other." The Major General's hair cut cost the company Rs. 12,000 for two Beachcraft flights between Ranchi and Durgapur. A few years later after his retirement, I saw him waiting to see K C Mohan at MECON office at Ranchi. Wadhera then represented an engineering equipment firm of the Tata Group.

New experiments in management...

When Mohan Kumaramangalam became Steel Minister, he experimented with the appointment of new CEOs unconnected with the industry. Bagaram Tulpule was one such selection. Tulpule who studied at Ferguesson College, Pune, graduated in Mechanical and Electrical Engineering, worked in Tata Steel at Jamshedpur. Without his realisation, he was drawn into a few disputes which ultimately ended in a big strike at Jamshedpur. He had to face criminal charges. After much struggle he extricated himself from those cases and returned to Pune where he became a HMS trade union leader.

His selection as the managing director of Durgapur was one of the sanest. He talked to the workers in their idiom and understood their problems. His simple life style and unpretentious mode of operation were in dire contrast to the Moghul style of Wadud Khan, SAIL Chairman who was a Communist Party cardholder.

Bhagaram Tulpule, saint of a man and managing director of SAIL, had to wait in vain for three days in Delhi to meet his Chairman Wadud Khan. Frustrated Tulpule threw up and left for Durgapur. Another reason for his frustration was the technical incompetence of men like Guhamullick. When workers were willing, the plant middle management failed.

My close association with Durgapur ended in 1967. However, since I was not in the company I watched Durgapur developments as an observer from outside.

Another great CEO of Durgapur was P K Paul, gentleman to his fingerprints, I was close to him during his short exile in Ranchi.
Any reminiscences over Durgapur would not be complete without a sketch of K Sen, ICS. Karunaketan Sen would be a cartoonist's delight. Black, baldheaded, sunken cheeks with a few teeth missing in the lower jaw, pipe smoking. Sen spoke with an Oxford accent. He dressed slovenly, wore chappals and walked as if one leg was shorter. His Bengali was equally good. A student of history and literature, Sen was at home equally with collectorate babus and suave diplomats.

He was averse to technology and left interaction on plant construction and negotiations on schedules with ISCON engineers to his Deputy General Manager, A.N. Banerjee, who was only too willing. Steel Secretary Bhoothalingam and his deputy Ramanathan dealt directly with Banerjee.

A total contrast to Sen...

A N Banerjee was a total contrast to K Sen. Son of a minor Bengali poet Anuroopadevi Sen was commissioned as an officer during Second World War. He became a Major. In 1952 he was nominated to the Indian Administrative Service on the Ex-Servicemen quota. He was District Collector of Bankura prior to his appointment as Deputy General Manager of Durgapur Steel Plant.

A tall (6 foot plus) handsome aristocrat, with dark shining hair which fell on his forehead, Banerjee was a chain smoker and heavy drinker. He came to office just before lunch, carrying a tin of 555 cigarettes. The office peon who carried the files, brought a few more cigarette tins.

He browsed through all Calcutta dailies and kept himself updated on all political and economic matters. Except the top level officers no one dared to enter his room. He had a way of talking to you while looking at the ceiling.

Too small for few giants...

K T Chandy became Chairman of Hindustan Steel in June 1968. Banerjee worked with him for six months. Highly embarrassing six months. Hindustan Steel was too small for two giants. Banerjee, became Additional Secretary and Director General of Bureau of Public Enterprises, Government of India.

He penned a beautiful farewell message which said: the plant is shaken out of the earth. The plant feels the pain of parting and hopes the earth would feel the same way." What a message after an association of ten years!

I have been a nomad without sticking to one place. My life in Durgapur was just over eight years. In Madras, Durgapureans meet at least once a year, besides meeting at marriages and social events. We chew over those early days. I enjoyed living and working at Durgapur. Those happy memories would always remain green.

 
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