Case 2: Award of GT Transportation Contract in

Record Time

Overview
Generator Transformer of SSTPS unit-5 caught fire while in operation at
around 10 AM. Unit tripped and was taken on bar. Spare GT was not
available at station and Unit has to be kept under shut down till
replacement of the damaged GT. It was heavy loss to the station,
envisaged about Rs 20 lacs per day at that time. Unit-5 has to be out
till the revival and replacement of the damaged GT with the spare GT.
Spare GT was available at Korba plant. But that was about 450 Km by
road from Saktinagar. This task was assigned to station level team
comprising of F&A, C&M and maintenance executive under the
guidance of GM- Singrauli.
Deliberation of the Solution
Top management took the decision to bring the spare GT from Korba in
shortest possible time. The team explored the possibility of bringing
the GT by road or by rail route. GT weight was around 195 tonnes and
so it was not so easy to arrange transportation by rail or road. It is to
be transported by special trailer or wagon. There was no direct link of
Saktinagar and Korba by Rail route and arranging transportation by rail
route seemed time consuming and involvement of lot of coordination
/follow-up with railways. Distance by road between Korba and
Saktinagar was less as compared to rail route (almost Half) and party
was also available who was having experience of handling such big
consignments. So It was decided that GT to be brought by road
transport. Target was set for awarding of contract for loading /
unloading and transportation with in 24 hrs as financial losses because
of the outage of the unit estimated to be around 20 lacs per day.

In view of the very stringent targets for awarding of contract, relevant

DOP sections were referred. Initial budgetary offer of Rs 19.5 lacs was
received from the concerned party. Accordingly technical and
administrative approval taken from competent authority as per
provision in the DOP for these type of emergency works arising out of
natural calamities or fire etc in section –II clause for which financial
powers were limiting to 10 lacs for GM and 20 lacs for ED. Secondly for
15 lacs and above, contact to be floated through Open Tender
procedure as per procurement and works policy.

Decision had to be taken in this regards to meet the target for award of
contract as open tender will take it its own course and would be time

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consuming. In view of the financial losses envisaged because of outage
of the unit, it was decided to go for single tender keeping in view the
past experience of the party with the NTPC and other PSUs. Enquiry
was sent to party by fax and party also submitted the offer by fax with
in 04 hrs. Party increased the final amount to 23.5 lacks as compared
to budgetary offer sent in the morning on account of liaising
expenditure as well as movement of prime mover from Indore to Korba
as informed by party. In this step some problems were also faced
because as per NTPC’s policy contactor should be given sufficient time
for assessing and verifying the site conditions for carrying out the job.
But in this case in view of the heavy losses envisaged per day,
communications were done very fast over phone and on fax and finally
party agreed at a price of Rs 23 lacs and a time frame of 5 days after
lot of persuasions with in which GT to be brought from Koba to
Saktinagar. Multilevel decisions were taken in a very fast fashion. Top
executives were consulted over phone for taking fast decision and their
consent was taken. The final contract was awarded before midnight
the same day and formal award letter was also issued (by Fax) to the
party for commencement of work.
Execution of the Job
At the time of award of contract, party’s trailer was stationed at Indore.
Party immediately moved the trailer to Korba for transportation of the
GT. Now the party had to finish the job in 5 days i.e. bring the GT from
Korba to Saktinagar in 5 Days. Party mobilised the required resources
in time and GT was loaded on trailer and moved towards Saktinagar.
But as the time for exploring the route was very less or can say few hrs
only so during transportation party found that one of the bridges on
the predefined route to Saktinagar was not fit for such heavy load (195
T) movement.

Concerned CPWD officials did not allow transportation of GT over that

bridge. In this scenario there was no option but to change the original
route. Other route was followed this time after exploring the route
carefully so that such clearance related problems must not appear
again. This time safe route was followed but distance travelled was
almost double. Finally GT was delivered at Saktinagar in 12 days.
Dealing with Deviation
In view of the extra distance be travelled in view of the clearance
problem in the shortest route, party claimed Rs 37 Lacs extra for the
extra distance covered. Case was referred to a committee and CC also.
Although party has stood by NTPC in time of crisis and did a good job,
coordinating with NTPC in any possible way but RS 37 seemed difficult
to justify. The party submitted copy of the rate contract with BHEL as

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justification of the extra billing. Finally after negotiation party agreed
for Rs 22 lacs as extra payment in liew of the extra distance travelled.
Conclusion
Although provision is there in DOP for dealing with emergent situation
but those proved to be insufficient for site for technical and
administrative approval when financial implication were more than 20
lacs.
No clear cut guidelines available in contracts and purchase manual for
dealing such type of emergency situation on fast track, multilevel
decisions were taken at the project level by the team and make it a
success.
NTPC and contactor personnel worked as a common team and
overcome all the difficulties which came during execution of the job.
For doing such types of jobs in emergency situations, rate contract
with logistic company may be entered in the short run.

Authors

 Anup Kumar (SS- MTP-Anta)

 Ch R K Rao (SM- F&A –SSTPS)
 R R K Sahu ( SS- NSPCL – Bhilai)
 Balram Prasad ( SM- C&M- SSTPS)

Suggested Case Teaching Notes

Objectives

This case may be seen as related to handling emergency through

timely and effective decision by the management. Innovation & speed
being one of our core values, such timely decisions may be
encouraged and procedural requirements and provisions of DOP must
be interpreted and used effectively so as to solve the problem in time
bound manner.

The case highlights that despite procedural requirement of PSU,

important decision could be taken through cooperation & team work.
The case also highlights the importance of collaborative problem
solving through trust and cooperation of Vendors and suppliers.

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Key points to be highlighted

 The context & background of the case

 Importance of timely decision making in emergency.
 Significance of developing a culture of trust & calculated risk
taking for handling emergency situation.
 Positive interpretation of DOP provisions in light of NTPC values
of innovation & speed.
 Collaborative Problem solving through trust and cooperation of
vendors and suppliers.

Questions for discussions

 Identify main outcomes and key events in the case

 What is the importance of this case for developing a culture of
collaborative problem solving & decision making in emergency
situation?
 How to reinforce NTPC values of innovation & speed despite
constraint in PSU work culture?
 What are the learnings from the case? In what way the decision
making & execution further improved?
 What is the right thing to do in such a situation?

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