IndianOil and Adani face problems in Ernakulam

Vol 19, PW 23 (28 Jul 16) Midstream & Downstream

Kerala's tourism board romanticises the state with its abundant natural beauty as 'God's own country.' But 18 months after it won authorisation to set up a gas network at Ernakulam in Kerala the IndianOi/Adani joint venture IOAGPL is less than impressed with this southern Indian state ruled by a leftist government and blessed with the highest (93.91%) literacy rate in India.

The problem it seems is that local workers are too educated and keenly aware of their rights. In short, they won't work cheap.

"Unlike Gujarat," admits a joint venture source, "it's difficult to work in Kerala." A source at another gas retailer explains that in Gujarat workers are "not only docile but also unaware of their rights," ostensibly making it more attractive. Problems with manpower mean IOAGPL, which received provisional authorisation for Ernakulam on December 29, 2014, has so far only managed to connect 100 homes which are taking 200 cm/d of piped gas and 12 businesses which are taking 800 cm/d.

This is nowhere near its committed target to connect 40,701 homes and lay a 1099.44-km steel pipeline network within five years. To be fair the JV had to fight off a legal challenge from Delhi-based Synergy Steel against the Ernakulam authorisation and received the final PNGRB go ahead only in October last year (2015).