Kirloskar not the best pipeline contractor around

Vol 14, PW 22 (05 May 11) Midstream & Downstream

Kirloskar is a household name in India for its back-up electricity generators when homes suffer power cuts.

But in the oil industry, Kirloskar Construction & Engineering is fast earning a reputation as a company that can’t get the job done. Ask GAIL and IndianOil, who both recount similar experiences in dealing with Kirloskar on two separate pipe-laying projects.

Last October, GAIL awarded Kirloskar a Rs49cr ($10.8m) contract to lay a 12-inch diameter, 101-km gas transmission pipeline from Karanpur village in the Budaun district of Uttar Pradesh to the ‘Kashipur Receipt Station’ in Uttarakhand, passing through Moradabad. January this year was the deadline for project completion but GAIL says Kirloskar has completed only 80% of the Karanpur to Moradabad stretch and 20% of the Moradabad to Kashipur stretch.

“We have given them another 15 days to accelerate work,” says a GAIL source, “or we will offer the work to someone else.” So desperate is GAIL that it is now bypassing Kirloskar and talking directly to the sub-contractors.

“If Kirloskar is not paying you,” adds GAIL, “we are saying ‘we will pay you directly’.” June this year is GAIL’s new deadline for completion of the pipeline, designed to carry 2.5m cm/d to the first 225-MW phase of a 450-MW proposed power plant, promoted by Sravanthi Energy.

Gas is also promised to a light fittings factory owned by Surya Roshini and to Moradabad-based CGD operator City Energy, owned by Zee TV owner and media mogul Subhash Chandra. From Kashipur, GAIL wants to extend the pipeline by another 58-km to Rudrapur in Phase-II.

Bids for this extension have already been submitted and GAIL is targeting completion by January 2012. When contacted, Kirloskar spokesman Anant Sathe admitted delays to the project, but said GAIL was equally to blame for its delay in securing the RoU.