DK Sarraf delegates spending power to directors

Vol 18, PW 9 (18 Dec 14) People & Policy

ONGC chairman DK Sarraf is showing he’s serious about reforming the company.

Normally people in his position jealously guard files relating to high-value multi-million dollar contracts. After all, how else do you prepare for retirement? But Sarraf is doing the exact opposite, delegating high-value contract files to fellow directors.

ONGC’s board on December 12 increased the size of contracts directors can approve on their own without the chairman’s approval from Rs250cr ($40m) to Rs1000cr ($160m). Astonishingly, the decision to move this hugely significant resolution came from none other than Sarraf himself, a small gesture that speaks volumes about his character.

“Sarraf’s integrity is very high,” says an ONGC colleague. “He doesn’t want to indulge in arm twisting.

He wants only to focus on bringing in effective implementation of ONGC’s new procurement policy and to speed up the process.” ONGC’s new procurement policy kicks in from January 1, 2015 and will see contracts awarded using quality and cost-based bid evaluation criteria through a new rating system.

“Each vendor will be rated according to its individual track record,” adds a senior ONGC source. “Contractors who meet delivery timelines and supply equipment in line with the tender specs will get a better rating.

Contractors with a bad track record will get a poor rating and less business.”

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