I.

Summary

The Assam Gas Cracker project is launched by Assam Accord that has been signed in 1985.

The Gail Company (government of India enterprise) having a share of 70% is implementing the said

project with another public enterprise OIL having 20% share and the Government of Assam as minor

partners. A lot of problems came up such as availability of raw materials, lack of investors, increasing

project cost, unsettled land acquisition and location. To sum this up, the whole project is economically

unviable.

As of now, the Assam Gas Cracker project of Assam Accord is still on-going and currently

facing uncertainties because of some factors that affects the feasibility of the project.

II. Introduction

The Assam Gas Cracker Project of Assam Accord is delayed for almost 23 years despite of

partnership with other companies. As the project continues to be delayed, the possibility of achieving

the project becomes lesser.

This case study is mainly focused in identifying the major factors correlated with the

problems of the proposed project of Assam Accord. It aims to provide possible solutions and

alternatives through critical analysis of data and evaluations.

III. Viewpoint

From the viewpoint of GAIL (a Government of India enterprise)

IV. Statement of the Problem

The project delays of the Assam Accord

V. Causes of the Problem

MANAGEMENT

Feasibility of the plan - The management does not able to critically look or identify the other

factors that may greatly contribute to make the Assam Gas Cracker Project realistically possible.
 The land acquisition is yet to be completed - The management is not yet finished with the

settlements of compensations, rehabilitations and resettlements for the affected personas.

MAN

Lack of investors - Investors are not satisfied or convinced with the proposed plan because

according to them it is economically unviable.

ENVIRONMENT

Availability of the resources for the project production - The Assam Accord is struggling

to find source of materials and technologies for the project production of Assam Gas Cracker Project.

TIME

Poor project development - The Assam Gas Cracker Project is signed in 1982 but it is still

on going in mid-2008. The project cost is around INR 50 billion which may likely to go up further.

MANAGEMENT MAN

Feasibility The land Lack of

of the plan acquisition investors
is yet to be
completed
PROJECT
DELAYS
Availability of Poor project
the resources development
for the project
production

TIME
ENVIRONMENT

Figure 1. Fishbone Diagram of the Problem

VI. Objectives of the Study

 To analyze the existing project plan for possible improvements;

 To minimize the project cost;

 To determine the ways to encourage more investors;

 To find resources for low-cost materials with quality;

 To determine the possible solution for the problem.

VII. Analysis of the case

a. SWOT Analysis (Strength, Weaknesses, Opportunities and Threat)

Strength

Assam Gas Cracker Project is signed in 1985 with a partnership of GAIL as the lead

promoter with another public enterprise OIL and the Government of Assam as minor partners. The

original project location is at Tengakhat and was later move to Lepetkata.

 Has target location

 In partnership with Indian government and other public enterprises

Weaknesses

Assam Accord has many problems in their proposed project. A lot of time has already

consumed for this project which causes an increase project cost. As the project delays, it increases

its possibility of being uncompleted.

 Economically unviable

 Availability of raw materials

 Lack of investors

 Increasing project cost

 Unsettled land acquisition

 Opportunities

In view of the fact that the Assam Accord is mainly focused on the gas mining project, it may

bring high profit on the Assam Accord. Stated below were other opportunities of the project:

 Provide more job opportunities

 Contribute to the economic status of the country

Threats

If the Assam Gas Cracker project will succeed, there is a possibility of having competitors.

Expenditures for the possible liabilities for the employees and environment are also presumed.

 May produce hazardous wastes

 May affect the health condition of the workers

 Increase in domestic and foreign competition

b. Alternatives and their evaluation

Alternative Courses of Action

ACA#1. Construct improvements and amendments for the Assam Gas Cracker

Project

ACA#2. Create more appealing and realistic project proposals for the investors

ACA#3. Research low-cost yet good quality materials considering the importation of

advanced and appropriate technologies from other countries

 Analysis of the ACA

ACA #1. Construct improvements and amendments for the Assam Gas Cracker Project

FACTORS ALTERNATIVE WEIGHT RATE

The improvements and amendments will consume 3

TIME 20%
too much time to be approved by the board (0.60)

Low cost will be used merely in planning and

4
COST conducting a conference for improvements and 30%
(1.20)
amendments

The improvements and amendments will surely 5

EFFECTIVITY 50%
make the Assam Gas Cracker Project feasible (2.50)

Legend: 1- lowest; 5- highest

ACA #2. Create more appealing and realistic project proposals for the investors

FACTORS ALTERNATIVE WEIGHT RATE

More appealing and realistic project proposals for 2

TIME 20%
the investors to be created will take time (0.40)

Low cost will be used merely in creating more 2

COST 30%
appealing and realistic project proposals for the investors (0.60)

May somehow be not effective depending on the 3

EFFECTIVITY 50%
preference of the investors (1.50)
 Legend: 1- lowest; 5- highest
ACA #3. Research low-cost yet good quality materials considering the importation of advanced and
appropriate technologies from other countries

FACTORS ALTERNATIVE WEIGHT RATE

Average time will be utilized in finding low-cost yet

good quality materials considering the importation of 3

TIME 20%
advanced and appropriate technologies from other (0.60)

countries

It will be costly since it will engage on

3
COST transportations, surveys and checking of low-cost yet 30%
(0.90)
good quality materials possibly in other countries.

The research for low-cost yet good quality materials

4
EFFECTIVITY can possibly lessen the project cost of Assam Gas 50%
(2.00)
Cracker Project.

Legend: 1- lowest; 5- highest

 COMPARISON OF ALTERNATIVES

ALTERNATIVES TIME COST EFFECTIVITY TOTAL

1. Construct improvements and
2.50
amendments for the Assam Gas 0.60 1.20 4.30

Cracker Project
2. Create more appealing and
realistic project proposals for the 0.40 0.60 1.50 2.50

investors
3. Research low-cost yet good
quality materials considering the
importation of advanced and 0.60 0.90 2.00 3.50

appropriate technologies from

other countries

The data presented reflect the results obtained from brainstorming. It intended to show which

alternative is the most effective solution for the problem. Time, cost and effectivity are the main

factors considered for each alternative with appropriate weight in percentage and corresponding

rating which are primarily based from thorough analysis of the case. According to the table, ACA #1:

“Construct improvements and amendments for the Assam Gas Cracker Project” accumulated a total

rating of 4.30, ACA#2: “Create more appealing and realistic project proposals for the investors” with

2.50 rating and the last alternative course of action with a rating of 3.50.

This indicates that the first alternative course of action, ACA #1: “Construct Improvements

and Amendments for the Assam Gas Cracker Project” obtained the highest rating of 4.30. It simply

implies that this alternative is the best solution for the problem. The improvements and amendments

will certainly make the Assam Gas Cracker Project feasible.

VIII. Recommendation

After a thorough analysis of the problem, the most effective alternative for the Assam Gas

Cracker Project is ACA #1: Construct Improvements and Amendments. This will help the Assam

Accord to have a better and efficient project plan. This alternative course of action (ACA) will also

help in reducing the project cost and period of time in implementing the project plan.

IX. Conclusion

The Assam Gas Cracker Project is delayed for almost 23 years, probably because its project

plan is economically unviable. Since it is said to be economically unviable, the investors are not

satisfied or convinced which lead them to back out. Moreover, the resources for the project plan is

still unavailable and the land acquisition is not yet settled. Through the case study, we came up with

the first alternative course of action (ACA #1) which suggests to construct improvements and

amendments for the Assam Gas Cracker Project. The said alternative course of action will possibly

help for the improvement of the project plan. The improvements will include the settlement of land

acquisitions and finding available resources. If the project plan is already amended, the investors will

be interested to invest money that will greatly contribute to the progress of the delayed Assam Gas

Cracker Project.
X. Action Plan

RESPONSIBLE
ACTIVITY TIME HORIZON REMARKS
PERSON
This involves the
President
identification of
Identify the Director
weaknesses that
weaknesses of the 5 days Manager
makes the project
plan Consultants
plan economically
unviable.
The research will
Research low-cost yet President also consists of
good quality materials Director visitation of firms that
2 weeks
that will be utilized for Manager offers low-cost yet
the project plan Analysts good quality
materials.
This includes
President generating of ideas
Revision of Director and decision making
1 week
project plans Manager through
Consultants brainstorming and
critical thinking.
Conceptualizing
Finalized the project President more appealing and
Director
proposals for the 6 days realistic project
Manager
target investors proposals for the
investors
Sending business
Schedule business President letters to the
meetings with the 1 week Director
investors for the
target investors Manager
business meetings.
President
Meet the prospect Director Presentation of the
1 week Manager
investors project proposal
Representatives
Execution of the
President project plans
Implementation of the
Director considering the other
project plan Manager factors that affect the
whole plan
XI. Appendices

PHOTOGRAPHS

Photograph 1. Conceptualizing ideas individually

Photograph 2. Brainstorming of ideas

Photograph 3.1 Making of the case analysis

Photograph 3.2 Making of the case analysis

Photograph 4.1 Finalizing of the case analysis

Photograph 4.2 Finalizing of the case analysis