These include L K Raina, the executive director in charge of the refinery, two deputy general managers and two general managers. Interestingly, IOC was also to commission a 300 mw power plant at a cost of Rs 1,300 crore along with the refinery, and this is also hopelessly behind schedule. The power project, to be constructed with assistance from Marubeni of Japan, was cleared by the Power Ministry only a few weeks ago and is currently slated to come up before the CCEA.

The refinery itself was partially commissionedin May, but with only the primary distillation units (the Crude Distillation Unit and the Vacuum Distillation Unit) functional, the refinery was crippled from day one. With two secondary units (the FCCU and the Hydrocracker) not operational, while crude oil is being processed, what is coming out at the other end is primarily heavy ends, or low value products such as furnace oil and bitumen -- the profits on this are very low, especially with today's depressed prices. While experts were against commissioning the refinery, the IOC management rushed to do so, in order to convince the Prime Minister that there was only a minor delay in commissioning -- at that time, the PM was monitoring all large projects very closely.

Soon after this commissioning, it was found that even the VDU was `shaking'. At that time, IOC gave out a fresh date of October and said that the refinery would be fully functional by then. While the VDU was made operational by this date, it was found that because of `over-firing', the furnacegot burnt, and a new one had to be ordered. According to senior IOC officials, the VDU is operating now, but "only to keep the refinery on float" -- that is, just to keep the refinery from closing down. Replacing the furnace and repairing associated equipment cost a total of Rs 100 crore. This, of course, does not include the loss in profits that IOC had to incur because the refinery was not ready on time.

From the original date of commissioning in July 1997 till April 1998 when the Administered Price Mechanism dismantling was begun, refineries were guaranteed a minimum post-tax return of 12 per cent. Based on the cost of the refinery, that alone meant a loss of around Rs 350 crore. Add to this the notional profit that has been lost in the full year after that -- the new target for the refinery to be fully operational is now April 1999 -- and you're talking of a similar amount, even if you account for the fact that profits in the post-decontrol era are far lower.

While IOC is yet to come out with a fullreport on pin-pointing the blame -- it has also been blaming several public sector suppliers for delays and faulty equipment -- what is heartening is that this is perhaps one of the few instances of senior officials being punished for lapses on their part.