Indian Oil Corporation Ltd.

1.0 Introduction of the Project

1.1 One of the Squadrons of Indian Air Force is positioned at Thoise, which is
approx. 130 Kms away from Ladhak (J&K). The location at Thoise serves as
a base camp for the Air Crafts going to Siachen Glacier to cater to the needs
of Defence Personnel positioned at the Glacier.

1.2 Thoise is at an altitude of 11500 Feet from mean sea level. Khardungla
Bypass, located at an altitude of 18500 Feet from mean sea level (worlds
highest motorable road) needs to be negotiated for mobilization of resources
at Thoise. It is remotely located location with extreme weather conditions
having temperature variation from (+) 16o C to (-) 20o C.

1.3 The total project cost was `.450.0 lacs. The working period in Thoise is limited
from June to September in a calendar year and the project was scheduled to
be completed in two working seasons i.e. 8 working months.

2.0 Necessity of the Project

2.1 Before setting up of the facilities at Thoise, Aviation Fuel was transported
through Barrels from Ladhak to Thoise. The fuel was supplied directly from
Barrels to the Air Craft

2.2 Temporary storage of fuel in the barrels was posing serious threat to the
quality of the product and therefore a need was felt to provide bulk storage
facilities at Thoise itself so that fuel can be transported in Tankers from
Ladhak to Thoise.

3.0 Scope and Project deliverables

3.1 Construction and successful commissioning of facility for receipt, storage and
delivery of Aviation Fuel to the Air Crafts operating from Thoise Air base of
Indian Air Force.

3.2 To ensure commissioning of the project within 8 working months without any
cost overrun.

3.3 Handing over of history cards of all equipments to the end user.

3.4 Handing over of all warranty related certificates to the end user

3.5 Impart training to operating persons for use of fire fighting facilities in case of
any emergency

3.6 Impart training for operating the facilities provided

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 Indian Oil Corporation Ltd.

4.0 Facilities provided

a) Total Tankage 800 KL

b) Pumping Facilities
c) Tank Lorry decantation and Filling Shed
d) Pipelines for decantation and Filling of Product
e) Fire Fighting Facilities
f) RCC driveway
g) Electrical works
h) Administrative Buildings
i) Quality Control Lab

5.0 Stake Holders:

5.1 Indian Air Force

IAF was a major stake holder. The connectivity from Leh to Thoise is only by
road which is not an all weather road. During winters, due to heavy snow fall,
the road gets blocked and the supply of fuel (which was earlier transported in
barrels by road) gets interrupted.

The Air base being an important strategically located for IAF, needed
uninterrupted fuel supply for its fighter planes. The storage facilities were
therefore required to be created to ensure availability of fuel for minimum of
three months requirement without receipt of any product.

5.2 Indian Oil Corporation Ltd

Apart from IAF being one of the major customers of IOC(IOC catering to
approx. 88% of their fuel requirement), the project was taken up by IOC as a
part of its commitment to serve the nation. The project was conceived at a
very low IRR of 2.5%.

5.3 Ministry of Defence, Government of India

To ensure uninterrupted supply of fuel to the remote locations which are

inaccessible having hostile weather conditions, is also the prime responsibility
of Ministry of Defence.

5.4 Ministry of Petroleum, Government of India

Indian Oil is being administratively governed by Ministry of Petroleum, and

therefore this Ministry was also one of the stake holders.

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 Indian Oil Corporation Ltd.

5.5 Government of Jammu and Kashmir

The developmental facilities at such remote locations indirectly leads to the economic
development of the region and as such J&K Government was also one of the stake
holders.

5.6 Project Team

5.7 Vendors and Contractors

The Project was executed by Indian Oil for providing facilities for receipt, storage and
dispatch of Aviation Turbine Fuel for end user as Indian Air Force. The Project was
executed at Thoise which is Base camp for Flights to Siachin Glacier and therefore, is
of strategic importance.

Due to strategic importance for the security of the nation, the Ministry of Defence
took up with Ministry of Petroleum & Natural Gas to undertake this project, who in
turn entrusted the job to Indian Oil.

As a part of Indian Oils commitment towards the security of the nation, the
Project was taken up even with negative IRR

Major Mile Stones

Planned Actual
S.no Mile Stone
Duration in weeks
1 Procurement of MS Steel Plate 8 8
2 Transportation of Plates 3 1
3 Finalization of Contract 8 10
4 Mobilization BY Contractor 2 1
5 Boundary Wall 4 4
6 Fabrication of Tanks 21 21
7 Installation of Tanks 14 13
8 Construction of Tank Lorry Shed 8 9
9 Pump House 7 8
10 Piping Works - Product Pipelines 7 6
11 Piping Works - Fire Fighting Pipelines 14 14
12 RCC Driveway 13 13
13 Electric Works 10 10
14 Automation Works 5 6
15 Administrative Building 8 9
16 Quality Control Lab 8 10
17 Trial Runs 1 1
18 Commissioning 1 1

Total number of milestones planned : 18

No. of milestones delayed for Completion : 6 (33.3%)

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 Indian Oil Corporation Ltd.

6.0 Role as a Project Manager

6.1 To carry out pre-project activities to establish the feasibility of the project and
to prepare budgetary estimates so as to facilitate the Management to take the
decision for investment for the project.

6.2 Detailed Engineering and Design for various works viz., Civil, Structural,
Piping, Electrical and Instrumentation.

6.3 Procurement of materials

6.4 Invitation of tenders, finalization of contracts and placement of work orders

6.5 Monitoring of project activities at site, ensuring adherence to quality

assurance plans and completion of the project without time and cost overrun.

6.6 Fortnightly visits to site for assessing the physical progress and for
coordination with vendors and contractors

6.7 Progress reporting for review of Management

6.8 Ensuring checking, testing, trial run and successful commissioning of the
project

7.0 Risk Analysis:

7.1 Finalization of contracts due to non- availability of technically competent and

financially sound parties because of inaccessible remote location, extreme
weather conditions and very low oxygen level.

To mitigate the risk, one comprehensive package covering all the activities
was planned to ensure sufficient quantum of work to the contractor.

Indian Air Force was persuaded to provide shelter and food on chargeable
basis to the contractors supervisor & labour. The assurance of Indian Air
Force was spelt out in tenders and the same motivated the contractors to
come forward.

7.2 In the event of break out of war with China, Thoise is within the range of direct
shelling from China. In such a scenario, petroleum products are of vital
importance for Defence and therefore petroleum storage locations are the first
target of enemy.

The location of the project was strategically located at foothill of mountain so

as to provide natural cover from direct shelling.

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 Indian Oil Corporation Ltd.

7..3 Uncertainty of weather conditions leading to delay in completion schedule of

the project.

In case of loss of man days due to weather conditions, permission was

obtained from Air Force authorities to commence work from early hours
starting from 05:00 Hrs (the sunrise is at 0400 Hrs) to compensate for the
delay.

7.4 All labour to be mobilized by contractor from plains due to non availability of
local workers. Workers falling sick due to hostile weather conditions leading to
delays.

Arrangements were made with Air Force for airlifting of sick workers to plain
areas and bringing additional labour.

7.5 The approach to Thoise is through extremely difficult terrain requiring

negotiating Khardungla Bypass, located at an altitude of 18500 Feet from
mean sea level ( worlds highest motorable road). The approach is prone to
frequent road accidents. Any possible road accident while mobilizing material
would have badly hampered the completion schedule.

Indian Army was regularly operating their transport aircraft IL-76 from
Chandigarh to Thoise to transport material for Defence needs. Liaisoning was
done with Indian Army to transport material required for the project on
chargeable basis.

7.6 Working period being limited from June to September and work was to be
completed within stiff target of 8 working months, any slippage in adhering to
completion schedule means contractor to de-mobilize in September and re-
mobilize again in June. This leads to minimum delay of ten months in real
sense.

To ensure timely completion, provision was made to keep standby DG Sets,

Rectifiers for welding and other tools and machinery etc., so that in case of
any failure, standby machinery is immediately put to use and there is no idling
time.

8.0 Communication Strategy

8.1 Formats were developed to have well defined channel for communication to
all the stake holders.

8.2 As per the defined strategy, the Project Manager was to get weekly progress
report of all the activities undertaken. These weekly reports were also shared
with local IAF authorities. The weekly reports were to clearly define the
planned work vis-a-vis actual work executed at site, comparison with variance
and recovery plan for any short fall in progress.

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 Indian Oil Corporation Ltd.

Monthly review meetings were held at site by self along with IAF authorities

E The agenda of the review meetings consisted of following :

Status of implementation of the decision taken in previous meeting
Progress achieved during the review period vis--vis agreed targets
Problems

Decisions regarding resolution of problem

Agreed action Programme and progress target upto next review meeting.
Identify owner for action plan
Ensuring implementation of Quality Assurance Plans

8.3 All meetings between Project Manager and Stake holders were documented
and Minutes of the Meeting were circulated to all concerned.

8.4 All decisions taken with regard to execution of work at site were documented
and conveyed to Site Engineers and E&P contractors.

8.5 The communication was by means of fax facility provided by IAF as there
was no mobile network / internet facility or any other means of
communication due to location being remote and security reasons of IAF.

8.6 The regular flow of feedback / information from site regarding progress of
work and difficulties encountered ensured timely completion.

9.0 Change Management

9.1 Any decision with respect to change in scope of work was taken only after
deliberations with all the stake holders and all such changes were
documented.

9.2 Project Manager was also assigned the responsibility of Change Manager. It
was his responsibility to document all the changes approved by IAF and
General Manager of IOC. The document to be prepared by the Change
Manager included the likely impact on financial implication and completion
schedule.

9.3 A mandate was given by IAF that any change impacting the time schedule
should not be implemented, the same was strictly adhered to.

9.4 All stake holders were kept informed about the approved changes and action
plan to implement the same.

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 Indian Oil Corporation Ltd.

9.5 Example of Change Management

During midterm review of the project, issue of augmentation in storage

capacity was discussed among all the stake holders. It was proposed to
change the distribution of different capacity of storage tanks. While carrying
out cost benefit analysis it emerged that incremental increase in cost favours
the augmentation of storage capacity at construction stage. In case the
augmentation is taken up in second phase, the incremental cost was much
higher due to increased requirement of fire fighting facilities.

Decision was taken to augment the storage capacity by 200 KL. Before the
start of next working season, all approvals were obtained and the same was
communicated to Project execution group. The change did not affect the
completion schedule.

10.0 Other Details

10.1 Cost Performance :

Approved Project Cost : `450.0 lacs

Final executed cost : `.525.0 lacs

The cost over run was because of approved change for augmentation of
tankage by 200KL

10.2 Time Performance :

10.2.1 Percentage increase with respect to Planned Schedule :

There is no time overrun for the Project.

11.0 Safety / Statutory requirements / Administrative requirements

11.1 Number of reported accidents at site - NIL

11.2 Statutory clearances

Consent to establish from J&K Pollution Control Board

Approval from Factory Inspectorate
Registraton & Licence to work a factory
Consent to operate from Pollution Control Board
Central Excise Registration
Approval from Central Electricity Authority
Explosive License

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 Indian Oil Corporation Ltd.

12.0 Environment protection / Ecological balance

Green belt was provided all along the periphery of the plot.

Oil Water Separator has been provided, OWS is designed to ensure that
oil content at the outlet side of the OWS is less than 10 PPM.

13.0 Experiences & Recommendations

13.1 What went well

a) Project was completed within the scheduled completion target of 8 months

without any cost overrun.

b) Positioning of stand by machinery ensured zero idling time of machinery

due to non-availability of spare parts in case of any breakdown.

c) Positioning of material was well planned and it was ensured that all critical
material was positioned ahead of schedule.

d) Part fabrication of plates in terms of edge cutting and rolling was done at
Chandigarh to reduce fabrication time at site.

e) Use of concrete block masonry, instead of stone / brick masonry. There

was total requirement of 70,000 blocks. In a day it was possible to cast
maximum of 800 blocks and therefore minimum of approx. 85 days were
required for casting of blocks. The casting of blocks including its curing
was completed in non working season thereby leading to saving of critical
time during working season.

f) Due to extreme weather conditions, instead of electronic units for

dispensing pumps, mechanical units were used.

g) Start of work during early hours resulted in better efficiency especially for
welding works. Due to heavy wind speed after around 2o clock, it was
difficult to achieve radiography quality of welding.

h) Air Force was successfully persuaded to provide boarding & lodging

facilities to the contractors supervisor and the labour. The same ensured
high morale of the workmen at site.

Intermingling of the labour with Air Force personnel inculcated a feeling of

serving the Nation by way of associating with the project.

i) Involvement of ultimate user even in the project execution stage ensured

their whole hearted support while undertaking construction activities

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 Indian Oil Corporation Ltd.

13.2 Lessons to be learnt

a) Clubbing of different work packages in one tender should be considered

especially in case of remotely located sites.

Initially, tenders were invited based on the work packages viz., tank
fabrication, piping and civil works. Due to quantum of work limited to
approx. 150.0 lacs, and also extreme weather conditions and remote
location no party came forward to participate in the tendering process.

Inviting one tender for all the works could ensure participation by one
party.

b) Should have envisaged to setting up of a Quality Control Lab at site itself

to save time

c) Alternate construction materials and procedures to be considered for

projects to be executed under hostile weather conditions.

In this project also, for driveway we should have considered heavy duty
paver blocks instead of RCC. The same would have resulted in less efforts
in mobilizing machinery and skilled labour for RCC.

d) One of the major constraints during commissioning was internal cleaning

of pipelines after hydro-testing. Since the product pipeline was completed
during first working season and thereafter water was drained out also,
however, residual water content was still left in the pipelines which lead to
rust formation. The pipeline was to be put to ATF use and therefore apart
from the effort put in for complete flushing of the pipeline, substantial
quantity of ATF (it is mandatory to flush the pipelines with ATF before
being put to use) had to be downgraded to Kerosene.

e) Indian Airforce and Army personnel undergo weather acclimatization to

sustain very low levels of oxygen. We should have insisted on contractor
to ensure their labour also undergo weather acclimatization process for
minimum of 7 days.

14.0 Project close out Report

14.1 After successful trial runs, the facilities were commissioned and were handed
over to IAF for its operation.

14.2 The contract was closed after making final bill to the vendor.

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 Indian Oil Corporation Ltd.

14.3 Report containing technical details of the facilities provided, their operation
manual and important contacts for maintenance / OEM were handed over to
IAF.

14.4 History cards and warranty related certificates of all equipments were
prepared and handed over to IAF.

14.5 The facilities were to be operated by IAF, their personnel were imparted
training for operating the facilities and for use of fire fighting facilities.

14.6 A detailed report was submitted to Aviation Group (our internal customer),
containing the details of facilities provided along with expenditure details vis-
-vis budgetary provisions.

***

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