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 ·-

'604-S- 1
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· ·..
.
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DOC. COltf~CTiOtl

REPORT ON TECHNOLOGY TRANSFER

T,Q

ENGINEERING ORGANIZATIONS
IN
DEVELOPING COUNTRIES

PREPARED BY

SEEVARAM. N.A. CHARY

TECHNICAL ADVISER
UNIDO , VIENNA
December, 7-22 .. 1982

7. 2 ,?·
~-m•: : '-zazp a ¥04 4 •

PREFACE

i) In response to a request from the Governnent of the Arab

Republic of Egypt for Special Industrial Services. UNIDO
assigned the undersigned as • Technical Advisor on Technology
Transfer to Engineering Organizations in Developing Countries•.

ii) The terms of reference are to improve the engineering capacity

of the Egyptian Petroleua and Chemical industries through
manpower development of the sole national engineering fil"ll
(ENPPI).

iii) The duties as envisaged during the two week assignment are

- Advise on the possibilities of collaboration with similar

engineering companies in other developing countries such
as Mexico, Brazil and India.

Advise of possibilities of collaboration with UNIDO and

UNIDO resources in areas of technology services. licensors'
selection and feasibility.

- Advise on suitable places for practical on-the-job

training of ENPPI personnel at ;nternational engineering
finns. ..
 . ·-- -·- ·-" . ----

This is one of the solid examples-of the initiative of UN

agency ~ere technical cooperation among developing coun-
tries is proll)ted and the benefit that one devele>ping aruntry
can get fro11 the advise and assistance of another that have
r.ecently passed thro 1 a compare' le phase of developing an
engineering design organization, is illlftlY- exemplified.

v) The undersigned left for Cairo, Egypt on_-eec. 7, 1982 and

·Worked witlt ENPPI, Heliopolis, Cairo in clpse association
with .UNIDO, Cairo till Dec. 22, 1982. A list::.f persons
-
~ntacted and the insti~tions to which tliey belong is given.
in Annex are i.

--vi) My warEst thanks to Dr. Mustafa El Rifai, Chai nuan EMPPI

•
and his competent, officers who are associated during the stay
for ·their cordiality, frank discussions and for the facilities
111ade available during the entire period.
My personal indebtedness to my efficient secretary Mrs. Amany,
but for wnose unstinted cooperation the report 1«1uld not have
taken the shape it has presently.

My sincere thanks are to Mr. J.E. Kunitzberger, Mr. T. Sabry

Mr. Omar Amin and Krs. Mona Hatata of UNDP and other personnel
of UNCP for all the help pr-ovided during the 2 weeks mission.

.... ~ .. -,-·-~---·-·•· .. ·-··· ·----· ... ·----- ..... ·----· ..• ·-- .. ···-- ......... ·•.-•r-•·"'*•
 ---~---·-

The report is covered in the following chapters :

- Introduction
- ENPPI - Present Status
Scope for collaboration with si•ilar engineering companies
in other developing countries such as Mexico and India
- Scope for collaboration with urtIDO and UMIDO resources in
areas of technology services, licensor selection and feasibility.
- Advise on suitable places for on~ttae-job -,raining of ENPPI
personnel at International Engineering Fil'llS
Meeting the ilmllediate objective of setting up of a division
for procurement.

(:
·.

"

. . -·--···----.... ,, .......... ~·· ... -······ ~ .. ···-·-·~···---·11··· -····-·----·-····---··-·-... ···········-·-····--· --·-··· ·--· -
 ~· "' --=""'....
--·~- "'.- ,~----~·- -·-----~

-. ··- - . ~ ...
_ ' -- - ..

INTRODUCTION

Eng~neering design organisation are the key links that con- _.

tribute in a significant •nner to industrial growth and enhances the
.capaci.ty of developing countries for self reliance.~Self reliance implies an
inherent strength for growth and development of the economy cs a
whole thereby achieving a long ten1 equilibri• in the balance
of pa,Jllents including pa,Jllents for technology in all its aspects.

Organisations like ENPPI are necessarily to play a crucial

role in the developEnt and acquisition of technology and in
selection, planning and execution of industrial projects.
Their role is very significant in pr..r:fding e11ploy11ent potential
in skills hitherto restricted to advanced countries and in inte-
gration of a large IUlllber of activities and agencies that are
needed to bring a project from concept to comaissioning using all

the resos1rces of time, funds and tectmical expertise in an optimal

•nner •

••
.....

As the capability of organisation increases it becomes the

eyes and ears of the policy making body in the field of technology
transfer.

The growth of such capability in the field of Petrole1111 and

Petrochemical Industry is directly ralated to the natural resources

... ~··· . . ·~-- - ... ~• • • • • ··-. h

 5

of Natural Gas and Crude Oil.

National Policy on issues such as Investment. roles assigned to
foreign :investment. State and Private Industrial Sector. highe.·
educational policy and policies concerning development and pro-
· 110tion of 111npower resourses and policies on technology transfer.

Egypt is endowcl with favourable natural resources of Natural

Gas and Crude oil for the grouth of Petroleum and Petrochellicals
Industry. Existilig capacity for Crude oil facilities and development
of clown stream facilities of petroleliil products. refinery inten11e-
diates and bye products on the basis of imported technology and equipment
•king use of indigenous capability in basic engineerin~. detailed
engineering-appropriately are ~avourable grounds for the grouth of
engineering design organisations_ like ENPPI.

The increasing use of Natural Gas for the 111nufac.ture of basic

fertilisers. petrochemical derivatives. industrial fuel ••• etc.,
further adds to the opportunities for the growth of technical
I
..........
expertise • It is pertinent to mention that constructicn activities
in all these projects are a good tr~inf ng ground for artisans of
all categories.

The National Policy of Egypt on investment in such priority

sectors of the economy is very progressive and fav~urable.
 6

Plans to set up grass J"tlots refineries of a complex nature

of 6 111 tonnes per ann111 provides a fund of oppurtunity for a big
•1eap forward• for ENPPI in the COiling years •

With this background and keeping in •ind the present strength

of ENPPI the report is prepared within the tel'l1S of reference and
duties specified elsewhere •

--
.-

......,.. ··-- "'

·- s; -" -·
;_ ....
~~--,.~·-~~--~....-,---

----- ·- - -----=-:..-·
....... ~~ ..--- ... ~- --- -.-~--
..

ENPPI - FRESENT STATUS

Engineering for the Petrolem and Process Industries (ENPPI)

was set up as a jointventure company in 1978 with the collaboration
of M/S C.F. Braun. California. EGPC and ttae other National Oil
Collpanies owned 40 S of the eqtiity and C F Braun owned 60 S.

However this joint venture participation was terminated after

a year and half and collaboration with M/S Brown and Root was
entered into.Presently it is operating as a joint venture company
with 90. S equity participation of EGPC and the National Oil Compa-
nies and balance 10 : with M/S Brown and Root.

The field of services presently covered are process studies.

•
licensor selection, basic and detailed engineering, project mana-
gement for grass roots and expansion of refinei;es, gas gathering
stations, assoctated gas processing. LPG recovery, storage and
transmission, pipe·. line transportation.

The list of jobs~handled so far are as in attached table.

By virtue of this association in these national projects ENPPI

has gained considerable competance and confidence in the field of
its operation. The present strength of its personnel is 270 of h
which 200 are technical •

• - ••.• , , . . . . . - , . . ., . • .4 _ _ _ _ _ _ _ •• ~- ... _ -·-· -

 8

The organisation. consider~ng its limited personnel. is not

very elaborate and is as per the attached table.
It has plans to expand and diversify so as to serve the petrole•
and petrochemica_l industries with total responsibility from
concept to coanissioning for all their projects.

-r--.·-· ............ ,. ··-·.--.. , • "' ,.,_.,._. ••'• .. __ . •·--•,••• .. ••••·--... - ....... - -•• ·-•••·· - ..... •- • ••••·-• • ·•
 ,/
&.•··,
',~~ j
','

Cha1nnan
•.
•. . ,'·~::
,\
· ....

.
~
,,

' ' d
~--- · ~ r-·----·--:-r
Assistant General
~r-- ,,
Engineering Proposal I Sal._s Finance Administration Project;
Management (40)
- Process (4)
P&I (5)

~
I Process a---+ I

Chemical Rating and Combustion (10)

Piping Project roject .
Envirorvnent (2) Manager Contro~
(65)
Chil Fire Fighting (1) Project
Engineer
,_J •tiononstruc-
ma- , !
(22) nagement
Packages (5)
E'lectrical • rrocure- ;
Materials ( 1) ment ~ i ·
(11) '.,

lnst,,.nts Vessels (5)

: '' 1
(14) Machinery (3)
l
' ·1
;l
i ' '
I
'.I
J
l
- Nullber within the bracket indicates No. of personn·el 1
': l
-•still to operate as a full fledged division ,,j
'
. 1I
: !
'•
Total Strength 270 I~

.'°
 ....... "":"*' :··-"'· _. ':*¢_ '*"* 5'.'£!7 - - ·- ~-swuc-:::- .........._,,...'{......_....•.-.,.._
..~_·;-<f".......,,_..,..._
.."""'_..,~,~·....... ~~------:"-"'-------:-:--::--,-:~-----~ -.- -
- ------... .-- --- . ~ - .·
10
...
. ...... -
_,.. .,,; ......
PkOJECT CO~T~l~

..... - .....•-
..,.; . - . .;

---------·- ----- - ------------------- --- .

!. OIL REFINU:G

-r - ~~lCT --·-u J~~C!TY I I s1Allis stoPt

-·1
-
I

'--: !I $\'~J '

I
i
£GPC Assiut ~- ....
Gra_--> l:.· ..• t ~Pf1"ner••
- - ''" - •, F...,.t ...!

.
- IP k~it. t~u\fel"if!S.
··APO ; ;~;:~;tdric. • CJ"t..:·:!f. Distfllatior: 2 r-:IT/Y c ' Basic & detan::
unit (CD-4) ·1
engineerfr:.:
IPC !.: :- :.:::- ·•\!.:'·;a Suez Refinery Expansion 5 ~'T/Y i
I IP Basic er;.. - : 1n;
•
'
Catalytic ~efor·mer 1500 BSD c f De~fled Eng.
TPL
F.·..; !'\.: :reater

'
i - ~·-.:=~ . f=-~:~t~:.;&tetr
- iloj·;.,;.;r recovery urait .,
.. APC Alexan:~ria Light Ends Recovery Unit 159 T/D c . ' aasic & detaile·:'.

Crude Distil 1at ion Rev~'.::;•

I 1 ,r . •..
.·
•-:
..,,.
I r
c
engi need r. ~-
Pre,;:-=~ : study
(CD-5) c Basic Engirieering
IP Detailed tng.
SOPC Suez Ce>ker Reva111p 800 T/D IP Pr~cess Study
Basic and Detailed
..

Alexandria ' . 20 ,..... ~ T ·'''

• •••• I • I .! ,, I Processing study &
! Licensor select
 11
PROJECT COHTROlS

C : Completed IP : In progress

-: ..·-....... - ·- -- .
~
. ......... --·-- .. -· -··-- -- -··-
 PROJEC COHTROLS 12
-
SUMMARY OF PROJECTS ENGINEERED BY ENPPI
.
I
.

III. TERMINALS &PIPELINES

-
.

CLIENT SITE PROJECT CAPACITY STATUS SCOPE

.- suco Ras Ghareb Fresh &Fire Water 100 Nrf/D IP Basic & Detaile~
Supplies . engirieering
.
Petro- Suez . LPG Storage !- Trans- 2X30000 NM. c Basic engineerir.,;
gas mission Facilities
I Crude Storage & Trans- Basic & detailec
EGPC Ain Sokhna/ 4X100000 IP
Sidi Kreir mission Facilities a~ en~ineering

.
Petro- Great ta1ro . .
Telec01m1Un1cat1on c .
Bas1c . .
eng1neer1r.~

gas System for Domestic

Gas Network

CTIP/ Ras Shukheir Crude Oil'Pipeline 120 Mr-BSD c Detailed eng.

EGPC

••
..-

C : Corr.;> 1eted IP In progress

·-"'' ...... -·. ··---·····-·- ··- ·······p·--·-····- ....

 4 • • ... ~......... ~ .. =·~-..,-,-"'"·*"" } ;: .. ~----~~--~~:=--"T"!""'!-..,.,.,.,,"""-: ·-.- - . . . . - ~-=- ....--~--:--~ -:·~-·~
:"t--~·:,;_,..__-::;:.. ____ ._-:--,-- ··:·~~-:~..:..;_-~.~- ~. -. . _·_: =---·-- ~ :.--··---- - ·- -.. -:------~ --~----------------
. ..
13
- ., PROJECT CONTROLS

SlHIARY OF PROJECTS ENGINEERED BY ErtPPI

.
I
.
~

.
. -
-
-. -. -
IV~ PETROCHDll CALS
::
. -

"
. -
.
CLIDff - SITE PROJECT CAPACITY STATUS SCOPE .,
~

NPC .Alexandria Linear Alkyl-Benzene 40000 Tty· IP _Detailed eng.

Plant include '
.
- Hydrotreater . -

- Merox

EPC Alexandria . Polyvinyl Chloride Plant 80000 T/Y IP Utilities/

. Offsites detai.1-
·, ed engineering

CTIP/ Suez Lube Oil Hydrofinishing 80000 l/Y Detailed eng.

SOPC - .
' . . ..

.
.
.
.

.
.

. '
c - J
--· . ,.
,_
- . ...·--·--·· -- ··-- .... ·- --- - .
·-·--· -··--..-.-·-·····-· -··--- ·.. ' . ..... .
' ....,.......
,....
~ ... __-.,__.. .· ..
. ., . ._.. .,.·----·"-'"'"""
,....llll'l!!IP.ll!llll!"ll"""""-----~~~--"""'."""--""'"'7-'*--<-..- '-~ 1 + - ~---;-··~.--.~-....-...

14
LIST OF PERSONNEL MET WRING THE 2 WEEKS MISSION

ENPPI PERSONNEL STAFF

Dr. Mustafa El Rifai - Chairman &Chief Executive

Ibrahim Hatti - Assistant General Manager & Proposal Manager
·Abdel Huaid Bassiouny - Adlaini~tration Manager
Mr. Joseph Nanan - Chemical and Process Manager
Mo....d El Malla - Instn11entat1on Specialist
Galal MA Ishak - Electrical Specialist
..... ~:-:
M~ El-Daoushy, Ph.D · - Offsites & Materials SpeciaHst
Sherif Y. El Serafy - Assistant Piping-Manager
Dr. Magid El Magrissy - Pressure Vessels Section Head
Eng. Magdi M. Shaaban - Manager of Civil Engineering
Eng. Mostafa Shaarawi - Project Controls Manager
Hussein Allam - Senior Machinery Eng.
M3haoud Fahim - Proces$ Section Head
Eng. Adel H. Abdel Ghany- Machinery Spedalist

EN?PI ADDRLSS
Executive Office Engineering Office
2 El-Erouba St. Heliopolis . 24. Abdel Moneim Hafiz St.
P.O. Box 2521 El Horria P. 0. Box 251 fl ;torri a
Heliopolis, Cairo, Egypt Heliopolis , Cairo, Egypt
Tel. : 665163 - 667635 -rel.: 662797
TLX : 93258 - ENPPI UN TLX : 93258
 ___________ __ ---------------------· ------
....._

15
J.txico - Scope of Collaboration

EARLY BEGINNING

One of the pioneering engineering design organisation in the field

of petroleum and petrochelllicals. in Mexico. is the Mexican Institute
r: of petroleum (lfl>}.

lfl> was founded in 1965 as an a~s organisation for the pur-

pose of fumishing the state enterprise PEIEX with the technological
services· it needed to optillise its operations. expand and diversity its
production and cut down the technological dependence of the COllp&ny.

It began to function as a service unit for_ PD£X and its ta~ts have
been quite \•aried. IliF directed its activities towards the solution of
PEIEX's problems, in surh a way that its main source of financing are
•
the payments it receives from this company.

AREAS OF 1".'llVITY
_,

••
C-
__ i

. IMP slowly entered into following areas of operation.

- To carry out technological and scientific research in order to
provide services to PEMEX in terms of technology related to exploration,
·drilling, refining and petrochemistry.
- To carry out basic re~earch on processes in order to manufacture
the necessary chemical products by PEMEX.
- To perform engineering tasks for projects
 .,.=...,__._.._.. ._ _ _ __........_ _._ __.__ _ _ _ _ _ _ _ _ ___. . ..

-
-
-
-
~
'
-
-
-
-
·
-
-
-
-
-
.
.
.
.
.
;
16

- To train persoMel at different levels. both PEMEX's and

· and their own.
- To carry wt economic research and industrial planning.

In short I.. has grown over the years into a conglomerate of both
research and developlent and an engineering design and consultancy
organisation. This has enabled it to develop its own capacity now
to license technology and engineer projects frm concept to ~­

!i:- . • .
<,,
"!..-
~.~:.'3_
' •. )~
ssioning.;
,..;.-.-.

'
Ill> is arrrently in a position to offer its ~ technologies
for 12 refining processes. 11 petrochelli ca1 ~rocesses and 4 pro-
cesses for gas processing. production of addi.tives to be used in
- ten different processes. While PE~X is the prime conSUlle r of
-
these technologies. a plant.for demetallisation of heavy residues
- ;s sold in ColUlllbia and a firm in Mexico is licensed to use the
process for obtaining Nonylphenols. Over 130 patents have since
been established in all the above fields •

• IMP has signed agreements with very important International

Engineering Firms such as Lumus, UOP for the joint development
of process technologies and subsequent preparation of this techno·
logy for c011111ercialisation.

Thro' its project division. IMP has participated and developed

process (basic) engineering for refining and petrochemical plants.
 17

While it handled 55 projects of various nature as of 1977. the ntllber had

increased to 76 in 1980 and lhe turn0ver of the COllplny in 1S79
is over 2.000.000,000 Peso i.e. U.S.·$.

P-ERSOllNEL

The current stength of its personne1 is over 3700 of which 451

are professionals 20 I are-teclmicians and 35: are non-teclmical
personnel. The institute is faced with a workload which surpasses
tts installed capacity and it is utilising the engineering services
of private ,.exican firm to eo11plement its own capacity.

Considerable attention is paid to training and courses are con-

ducted both for its personne1 and personne1 in the refinery and pe-

troclaica1 operation. As of 1980 over 2000 personnel have undergone

various training programes.

OPPORTUNITIES FOR TRAINING FOR ENPPI PERSONNEL

Considerable mutual cooperation among Latin American Countries

for training is present and recently Ecuador's Cor~ration Estatel
Petrolera Ecuatoriana (CEPE) has signed an agreaent with Ill> under
which the Institute will train 90 Equadorian engineers who will ope-
rate the Esmeraldas Refinery.

. .
~_l'!l.,.•~-·~l!ll--_11!1.111!'.._• ____:z:p:-*""""_~---'-.,.P-•'-•_.. .,.,_""""_"!"'
...._-_••""_-"!!!111-~_-~_.,.....,qa __ :_""'!!"""._,__-_~.,........--~-·~--~ -~-~------~~~""'.,..,--~-- .....-___..,,,,.

18

In the opinion of the auttior. I.. wuld be a willing partner

-
with ENPPI to collaborate for providing and exchanging technical
advice and services in its areas of specialisation. In particular
their !trength in technology development for purpose of camer-
cialisation is an area for •tall. cooperation •

.i
j
' --.-.. ... •1-·• · - · ...... ___ - · ---···· ... ----------~ -
. , ....... .
 •t
P¥P•.l!l_l!!'f'.f~lllJ.1!11%LPUllOllllll
--·~·· ..... .....__..c
~·-•: AWlll!I<_. . . __!"!',-•"""
_ _ _OW! ..---....--
. .,..,--4P"""?"....,,.,.._µ_....,...__c:w......,..
__ .• ~-· #( • -~~---..~"""-"'" -""'•"-_, __ ._--;r---·-,.....----.~

19

INDIA - Scope of Collaboration

llffRODOCTIOll

One of the major developments to achieve self reliance in design.

engineering. procure11ent. indigenous manufacturing capability and

construction for an Hydrocarbon Indusuy in India •s the foration
- .. -
of •Engineers India Ltd. in 1565.
. ,, ,

-
Fertiliser ccrporatt_~ of Ill'lia Vhich started with fertiliser
..-
.
-
units over 25 years ago ...s also developed very high stills in de-
tailing and construction of fertiliser plants thro' their planning
and developleiat tring. Also thl!y have developed capability for
indigenoas catalyst •111facture.

Indian Institute of Petrolem and Institute of Petrole• explo-

_ration. established over two dec•des ago with UN, French and Soviet
assistance is the research and devE,op1ent wing in the field of petroleu11.
Product Application Laboratories of Indian Oil ~rporaiion and Indian
- Petrochelli~ls corporation have considerable facilities for research
and develos-ent. All these laboratories do provide training faci-
lities. There are laboratories in the private sector perfonRing -
research and development and notewrthy are those that ha\fe deve-
loped •Molecular Sieves• for the Gas Processing Facilities and f'etro-
chelltcal Industry.
 __ _____ . ___ . _____ __ .. _
. -· ---·· -- - - ______
, -_. ....;.:_.

. 20

Many other organisations in ~ country also are involved in

design of utilities and very large facilities are already establi-
shed for engineering in process industries.

-
ENGINEERS INDIA (El)

El. Whose field of oper•tions is si•ilar in nature to ENPPI. are

the ones whose activities voulC: be of interest to ENPPI for purposes
of collaboration. Hence the activities of EI is elabOratecl for this
report.
The services offered are.
Feasibility studies
Research and Development
Project Management
Planning and Scheduling
Cost Engineering
Process Design
.~~
. Detailed Engineering including liodelling

•
...-~
~

Procure11ent
Pre-construction Planning
Construction Management
COllllissioning and Plant Start up
Heat and Mass Transfer Equipment Design
Enviror111ental Engineering
Systems· Engineering and Electroni~ Data Processing
Specialist Maintenance, Materials Selection and corrosion Control.
 ·--~- -·----· - - .... - ,, _____ _...;.._·_..;._ - -·

21

PERSONNEL

For offering the above mentioned services El has a staff of

about 3000 of which 2000 are engineers. tecivr.'>logists and specia-
list. In tel"llS of manhours this constitutes 6 million manhour per
anrm of which 4 million are technical. The turnover is of "the order of
U.S. S 30 million.

It is considered relevent to highlight the manhour requirement

for any project taken on a grassroo·ts level. In the experience of
the author a grassroots refinery would take a •illion manhours in
project management. pro.cess design. engineering. procurement. pro-
ject control.and all periph~ral services and another million manhours
on constrvction management. This would be spread over a project
cycle of 36 to 40 110nths. All this services are provided under one
roof by organisations like EI. In addition,construction manhours of
over 10 million by various contracting agencies such as civil, mecha-
nical, tantages, electrical and instrvnient, insulation. painting •• etc.
is forseen. A well developed engine2ring design organisation can
provide employment opportunity in this magnitude, directly and indirectly.

FORE I G~ EXCHANGE

Foreign exchange ~omponent in aproject as a result of such p~a~tises co~ld

be kept at approximately 25 - 30 i of project cost•

..... ,.,.,, ... ••·--•••.,.• r ·-· •·•·•---·---- •--·••·-·•-··•••• ~ .. - - - ••~• ... - -·• ,••"'' • • •-r----..•·••••• '•
 - - -------. ___
, _....... __
22

FOREIGN EXCl'.ANGE (Cont'd)

While this is true under Indian condition. it may be a little

higher under egyptian conditions.

TECHNOLOGY

In this area EI has know how for the following units with all
;p. +.(:-.
. its offsite facilities.
-.
Refineries.
- Crude disti11ation
- vacu111 distillation
Bitumen Blowing
- Yisbreaker
- Delayed colter·
- Coke Calcination
- so2 treatment of.kerosene
'r·:'. propane deasphalting
- Dewaxing I Deoiling
- Furfural Extraction

There are other Refinery unit for which El can offer process design
packages with the basic information furnished by licensor / catalyst
supp1i er. They are :
 - _______________
,- ·--- ___ -------------
_..
-- .-"

-·----- ---·------
...
-

23

TECHNOLOGY ._ {Cont'd)

Naphtha Pretreater / Refor11er

- Hydrodesulpturisation of Kerosene / Gas oil
Sulphur Plant

In the field of Gas Processing El can offer technology packages for :

:,··
~~ 1'7.
- Gas conditioning
L P 6 Revovery Plant
Ethane / Propane Recovery Units.

DETAILED ENGINEERING, PROCURD£NT AND CONSTRUCTION

•
El performs all front end engineering activities having made
available a process design package similar to UDP schedule •A•.
This enables early coaaeneement of procurement activities· of long
delivery critical items including construction .resource planing,.
overall plot plan development and planning for infrastrutture
facil 1ti es.

El's competence covers detailed thenaal and mechanical design

of heat exchangers of all types, heaters including air preheater~,

colunn internals - trays, packed columns, waste heat boilers and

ejectors.
 24

DETAILED ENGINEERING, PROCUREf£NTAND CONSTRUCTION (Cont'd)

All this has enabled· develos-nt of indigenous vendor capability for

all these itells. For in.stance, arising out of such involvement
.
in detailed engineering, a sheet metal fabricator who make steel
furniture was co.i,,etently developed into a tray 1111nufacturer.

El is associated in engineering, procurment, and construction

since its inception in over 90-major projects valued over 2 billion
U.S. Dollars.

OTHER K\JOR PARTICI~ATION

El is also associated in a major way in planning, sche<bling,

monitoring and cost control.in Sonatrach's (Algeria) L N 6 II project,
and consultancy in design, engineering, procurement, construction
supervision and start lip services in L P G project.
,,,- ..
'
Bes•~es El services cover offshore engineering (except reservoir
.
engineering) to enable detailed design of offshore well and process
platfonn in woter depths of 200 feet and also in ports and harbour
development.
 -·- - - ·- -··.--. . .

25

AREAS OF COOPERATION

With this background of experience of an Indian Engineering

Organisation and considering the desire of ENPPI to develop tech-
nological self reliance in identical areas of operation. there is
a11ple scope for collaboration in areas of ..tual interest.

Considermg th.! i11pOrtance· given to development of procurement

activities within the C011pany it is to be stated that scope exist
for cooperation in this area of project activity.

It wuld be 110st appropriate for ENPPI te~ of personnel and

Indian personnel writ in one identified Egyptian project together.
Training of ENPPI personnel in India and study of vendor shops for
inspection training is also.possible while the project procurement
work is under b1ple111entation. Any other areas of service. say
mde11ing, if considered relevent can also be promoted for mutual
..

••
(.._..,;.;.
~
cooperation.-

A review of ENPPI operations and the current strengt~ of its

personnel indicates,. while ~dequate ca~ability and competence is avai-
lable within the company in its present areas of operation, the
magnitude of the task in setting up of a grass roots refinery or a
petrochemical plant calls for ~·'•bstantial increase of its personnel
and also diversifying into areas of procurement and construction

. .
-·-··------- - - · - - · - · - . ------- ··.=---_;....;;···~.....--~------ -------~~~-----" -
26

AREAS OF COOPERATION (Cont'd)

management and coamissioning in order to be able to provide such

s!rvices under one roof and responsibility. It is such total .
involvement that can promote technological self-reliance and ca-
pability within the country in areas of technology, engineering,
equipment manufacturing and construction.
 27

UNIDO AND UNIDO RESOURCES - SCOPE FOR COLLABORATION.

Considerable possibilities·exist for utilising the forum of

UNIOO and its resources in areas of technology services, licensor's
~election and feasibility studies.

Technology services, necessarily has to cover feasibility and

project report preparation, technology selection. licensing agreement
formulation, engineering, procurement and construction contract
fonnulation, process design developDent, engineering, procurement,
construction, comnissioning, operation and training of personnel.

Assistance in each of these areas are available through UNIDO

and other UN agencies in the nJture of assigned technical personnel specialised
in each of theareasand through various deliberations of UN agencies
and documentation released from time to time in each of these areas.
The list of such documentation is ~ppended.

The UN secretariat including the regional comnission in petro-

leum technical cooperation at the centre for natural resources,
Energy and Transport - New York covers petroleum related subjects
and the UNIDO agencies cover the petrochemical aspects •

A number of specialist are stationed at UN head quarters and

the services of these individuals are supplemented where necessary
by other experts, drawn when possible from the developing countries.
 ~ ____________ _______
.., __

~
-
-
_
.
.
.
.
.
.
.
.
.
.
.
.
.
28

The wide ranging nature of services offered could be perceived

fl"Oll the following :

- Setting up of Institute of Petroleum • India •

.; Setting up of a laborGtory complex in Bolivia.
- Airborne Surveys for possible petroleum bearing structures.
- Techno economic feasibility strudy for offshore petroleua
development in Chile.
- Master Plan for o; 1 and Natura 1 Gas cmai ssion
-Preventing oil spillage for Oil and Natural Gas comaission
- Establistaent of sta4 OU Co •• CEPE. Equador.
- Supervision of Construction contracts. establishEnt of safety
and maintenance procedure. analysis of refining-and product mar-
-- keting agreements. inspection of storage installations and setting
up of training progrannes.
- Study on utilisation anc! marketing of Algerian Natural Gas.

c-· UNIDO secretariat have inpl~nted some of the major reconaendations

• of the 1st consultation held in 1979 at Mexico. They are :

- World wide studies on the petrochemical industry

- Establishnrent· of permanent working ::group on world supply and
deniand for petrochemicals
- Detailed study of the industrial uses of associated gas.
- Study of marketing of petrochemicals produced in developing
countries as a means to assist orderly flow of petrochemical
 ~:--~-...,. _-.-. ----· -."'"--..- ·-- - - - .
. - -~ ~-- -- ---- -..:.:..- -..:. ··---- ----·------

29

to existing and future •rtets. All this t«»uld uply assist in

developing suiuble policy planning documents for the country.

UNIDO secretariat ws suggested. arising out of the 1st con-

sultation, to prepare a anual on alternate sources of petrocaical
technology. This would be a useful docment in the selection of
technology.

Arising out of the 1st_ and zncl consultation UNIDO secretariat

hid developed a model of licensing agreaent. In the author's view
the doc111ent is of considerable use in fraaing Hcensing agreements.

Also UNUJC> have recognised the need for assistance in nego-

tiating agreements and ,have been requested to prepare comprehensive
guidelines that t«>uld help the licensee in his negot1ation.

It is notet«>rthy to mention that UNIDO secretariat has prepared

a model form of turnkey lumpsm contract for the construction of a fertiliser
plant and a model form of cost reimbursible contract for the construction
of a fertiliser plant. They are also examining.how this could be adopted
for use in petrochemical industry. The system of continueing consultation
between developed and developing contries established under the guidance of
the Industrial Development Board of UNIDO is an helpful media, as the con-
sultations permit negotiations among interested parties at their request at .: .
.
the same time as or after consaltations.
 30

One of the·r~ncktion •de at the second consultation

on petroclaical fodustry held at Istanbul in June 1981 is for
UNilio secretariat to update the existing guidelines for joint
ventures and exaaine the various fon15 of long tena arrangements
for the develos-nt of petrochellical industry.

In particular the following points were suggested for consi-

deration by_ UNIDO secretariat while mclifying the general gvidelines.
(
- Agreement of intent. feasibility studies. organisation and finan- ..
ci ng of projects.
- Constf'llttion of the plant including processes. and offsite facilities
- Provision of infrastructure
- Training
- Technical support

The third consultation on petrochemical industry is expected

to report on the i11plementation of these reco11111endation • The study

•
of these would be of benefit•

In the field_of training the second consultat~on proposed that

UNIDO secretariat should conduct and empirical study on the various
technical training programes and schemes in the petrochemical
industry that have been made available so far to developing countries
with a view to recOfllllend the most effective fonn of training for
ensuring maximun transfer of technology ·in the shortest possib~e time.
........ ....,......_ _ _ _....,._ _ _ _ _ _ _ _ .--"Cl". .+---.. . . --·
----
~ ,,,___,_~---:.--- --~~~:---~~~:""~.......---..

. - _....____.;.... ---·- ~-.·.:-- ". -=-

31

The guide to trairling oppurtunities for industrial develop-

llellt prepared by the Training Branch of UNIOO lists out in detailed
•nner all available training oppurtunity. A list which in the - -
1uthor s view wuld be of interest
1
to EllPPI i~ listed separately.

lltIDO funds are·available for pl'OllOtion of training through

award of fellowships. Nominations are to •de by respective gover-
.-nt thro' lllDP representative not later than April 83 for 1983 •.

. MDst fellowships are project oriented. that is to say. ;suOh

training activities fol"85 a CClllpOnent of a tect..ical assistance project ·
C011prising also other cmponents.

lltlDO is prepared to assist goverment both in drafting projects

for industrial training abroad and in carrying thell out. if government
and resident-representative include a UNIDO executed project entitled
•Jndustrial Training Abroad• in the country programme. These could be

, __; :. organised fro11 the funds earllilrlc~ for fellowship within the UNIDO

-·
l •.. .
regular progr1111e of technical assistance for 1983 {ID / C.3 / 114)
or by establishing funds in trust with UNJDO earurlced for this purpose.

UNIDO can organise study tours for both individuals and groups
to be financed from UNDP country prograaae funds / Special Industrial
Service Funds I Funds in trust within the framework of econome coo-
peration among developing countries.
 - - - - _ _ _ _ _ _ _ _..;...:_:.;.-:-::::.-.-..--=--=- - - - -

Looting at all the above 11entioned resources of• and IM

.
agencies. it is tile opinion of the author that these agencies
provide 111ple DP1Urtunities for collaboration thro' consulta-
tions. ctoa.enutions. personnel and funds. for devel0ping the
organisational strength of Efl>PI in its field of operations.
 33

UST OF llCIOO DOCtlDTS :

1•. Report of the 1st consultation on petroctaical ID/22

Industry
2. Second world wide study of petrochelrical industry ID/Iii
- Process of restructuring 336/3
and add 1.
3. Industrial uses of Associated Gas 111100/PC 11
4. 1st draft of the 111100 model for licensin9 . ID/116. 336/1

•
< -
•'!\- • • ,;

);:> .·. - --
f·:
patents and technology in petroclaical illlUstry and add-1.
5. Long term arrangelll!nts for the develo.-nt of the ID/VG 336.2
petrochelri ca1 industry in deve1oping countries
6. Second consultation on the petrochemical ID/273
industry_- UNIOO - Istanbul. June '81 :---

7. Industrial cooperation between developed and ID/29

developing countries for experts.
8. A guide to industrial purchasing ID/82
9. Guide lines for the acquisition of foreign ID/98
'·~-

•
~J
. .;
technology in developing countries with special
reference to technology Hcense agreements
10. Contract planning and organisation 10/117
11. The initiation and implementation of industrial ID/146
projects in developing countries
- A systematic approach.
12. Guidelines for contracting for industrial ID/149
projects in developing countries

.... -~ ··--·-·-~---...· ·--.,·-·-·---·-··- .._,_. _____________ - _..._

..............---..... .........
 ....-
1111119-ltlllllll!~
.
.. -1,,...
....~~.....--------_.,..---..._-~.......--__,......-
--···- ..._ -----
.................."~-~------- -- ;i-.~-·.,---r--;c-~

34-

13. Petroctmical series - Selection of projects 10/SEP.1/2

and production processes for basic and interme-
diate petroctaicals in developing countries.

14: Programing and control of implementation 10/SER.L/l

of industrial pnJ-jects in developing countries.
15. Guidelines for project evaluation 10/SER.H/2
16.. Petrola. cooperation among devel~ping countries. E.. 77 .. 11.A.3
17. Guide on drawing up international contracts . E.76 .. 11 .. E.14
on inchistrial cooperation ..
annexure ..
- General conditions relating to plant and 11achinery.
Supply of plant and 11achinery for export
- Additional clause for supervision of erection of plant
and •chi nery.
- General conditions for erection of plant and
•chinery
18. UNIDO lllDdel for11 of turnkey 1111psum contracts for UNIDO/PC25
the construction of a fertiliser plant
19. UNIDO model form of cost reimbursible contract UNIDO/PC26
for the construction of a fertiliser plant
20. Guide to training oppurtunities for industrial Pl I 86 of
development. (11th issue) 26~8.82
 ------- ·----- __ ..;-.....;_. ---------~--·'-""' ~~~-- -·· -
35

TRAINING COURSES OF ImREST TO ENPPI

· 1. Transfer of chellical Technical ur·versity s...er Semester

technology.to develo- Yislil 1983 • 28 Hours
ping countries

2. Process Instn111entation Fertiliser corporation 3 llDnths

and c~ntrol =in fertili~ of India - Sindri-India
ser :industry

3. Petrochemical Industry Joint UNIDO - Romania 8 weeks

(In plant group trai- Centre - Bucharest ,
ning progrillllle) RllEnia

- - - -

'-4. Petroleum Technology Oi 1 and Gas 1nsti tute 11 mnths,

Ploiesti, RLnania Sept.'83
r,

-
\.::;.•
5. LNG Technology Institute of Cryogenics 3 months
University of Southampton October
U.K.

6. - Project Management, Industrial developnent 1 Oct. 83, 8 weeks

- Introduction to project Authority, Lansdowne House 2 June,83, 8 weeks
appraisal,- Project Ballsbridge , 3 July,83, 8 weeks
Identification and inve- Dublin 4 Ireland
stment promotion
 ..... - · - - · - - - _ _ . , _ · - · - - - - - - - - - - - - - - -.........---_;.----~;._;:...:_ ·..:.... -.:.=..:- ·-~- -·':"' -·

36

7. Planning and appraisal University of Bradford Jan • 83

of industrial projects project Planning 12 lleet
Center for Dev~loping

countries.
Bradford,West Yorkshire
U.K.

f.
~ c

~~~ ,-
1·:"
(..
8. Site •nagment Crom Agents
Training services
4. Mill -Bank
Fef>. )
May ) 1983
Sept )
London U.K. 12 Weeks

•
.........'Jll!!lllll"-.,...._ _ ~--------~..-_.._,,.....- ..........
_~ --.-- -
-~___...,..,--~--------- --.,...--~··.-- ... ~

....... ___ ,_;,_,_ ·----~-_..;.,._. .-.;;;._._ .... _ ~..::;;_-_ ~-------.;;...__---.:-~---~~-~-...;:.....-__:..-~ ---·~-..;. ...

37

lllJP PERSOINEL LIST

J.E. Kunitzberger - Assistant Resident Representative

T. Sabry - National Professional Industry
Mrs. Mona Hetata - Programe Officer

UNOP ADDRESS

29, Dr. Taha Hussein St.,

Zamalek , tairo , Egypt
TF - 651244-651476-651517
Telex : 92034 DP UN
...._.!!111!!1!1_11111'11_ _ _ _ _~-----------,.-·... ""' - , •
----------
.. 38

INTERHATIOIW. ENGIHEERING ORGANISATI~

- SCOPE FOR COLLABORATION FOR TRAINING

· The experience of colla~ration with International Engineering

organisations cover the following :

Bechtel Asahi
Kellog Kobesteel .
llmars .. Toyo
-Foster Wheeler Polysar (Canada)
Sna Progetti Badger
- Technimont Crest Engineering
.
PetnJlll (Rumania) Scientific Design .
.
Technip _Neftechimprom Export (Russi an)
Staaicarbon UOP
DSM Union Oil
Kn1pps . Dupor:it
Veba Chemie KReBS .
·Linde Lonza
-·-
Lurgi Comprimo
Uhde I MP
Topsoe Norton
Oschatz
......
Schute-Koerti ng

..

-·--,...--·.. , -.. -·-- .. ,

- --......
. ...... ........ .: _..... ...
 --.-•---
-~ . .. -
- -· --- _..._.
- - ___ ----
,-.....;
-----·--. -- -- - ·- - ------ --

39

SCOPE OF TRAIHING

Each of the organisation, above mentioned, do provide on the job

training, as may be require4' and negotiated at the time of collaboration
agriellent. The training foreseen is a part of total package of services
on a specific project assignment.
It is also possible to get the association of some of the companies like ·

.• -
Kellogg, Crest Engineering who provide a back up i .e a check to verify
, r- . _.·t
the operability of a process package, verify a structural design for an
-. ··.. _
;.;:
s-.
'~! offshOre platform developed by a local Eng. Co.·
. Selle licensors like Comprimo, Engelhardt furnish basic process data and
catalyst information to enable process package to be developed by the
local engin~ring Co •• which is subsequently checked and approved as
• Good for Engineerng•.
: Process designers and specialist instrllllent engineers of local engint..~­

ring company do participate·in ~"Ocess package development at the office

. of ~jority of International Engineering Firms.
c;. This·enables this team to contribute in the detailed engineering phase,
~ knowledgeably, on process engineering activities and in the development
of utilities package. In the view of the author such exposure
provides necessary training and builds up confidence .and responsi~ility •

. TECHNOLOGY TRANSFER

There are organisat;ons like Krebs, perhaps smaller in nature and

number, who offer total transfer of technology of licensed processes to

........ -----...~--~ "'"'·-~-· '._ ..... ····· .... :" .

 --- . - ______________ .,;_ __ ----- . ~--- -

40

TECHNOLOGY TRANSFER (Cont'd)

enable plants to be t·uilt with minimum back up assistance. Such a.-

panies also encourage exchange of infonnation on latest developments to
keep the technology up dated and also assure well ~~fined free back · ·
up support for future installations. An elaboration of such transfer
with its attendant benefits of training is considered relevent.

A team of project, process, instnnnents, piping, comnissioning

personnel, say 5 or 6, participate &long with litensor personnel
intensely in the development of one process package of defined capacity
and product pattern and sinultane~usly develop procedures for scale
up. Some of the activities taken up are :

PhYsical and chemical ~ata and its application

Design procedures for all critical equipment and criteria
for scale up
Test check of equipment design for different capacities.
c...

- Material selection and criteria governing the same.

\·

development and analysis of P &I D's for logic by operation I

Process
- Data bank development and test data bank·fo~ plants already
designed •
- detailed thermal and mechanical design of critical and proprie-
tary equipment to acquire independent capability and competence
for indigenous manufacture.

. ....... -,, ...,"". ········-··.-·- ..... ..........

" ,.,,
 __________
,_,_ -------- -

41

TECHNOLOGY TRANSFER (Cont'd)

- ·Pjping and valve specifications to suit indigenous conditions

and to promote procurement from a wide source.
- . Prepare operating and analytical manual including safety reco-
aaendations on process and product
- Plant visit for training in start up and operation ·
- Licens~r participation in inspection of critical equipment
fabrication i~dige~ously.

- Expatriate start up assistance.

Such complete involvement would enable maximising the local

manufacture and to adopt value engineering concepts for minimising
cost • Further acceptance of licensor to local requirement at this.
stage minimises later conflicts and corre~tions.

A11 this association contribute in a substabtial way to training to

handle future tasks and emergency situations.

Incidentally the licensor developed inproved catalyst in the later

stages of project execution, an~ offered the same and a quick switch
over to the improved catalyst thro' minor changes in reactor design
became possible which had substantial gains in capacity and energy.
saving. This is cited as an instance of satisfactory exchange of developments
between licensor and recipient country.

The abOve concept of technology transfer is beneficial where repetitive

import of licensed process is foreseen •

... ··-···--·....-· . -······--,·-·- --- .... ' ... ___. .. _.. . ''"' .... -
 42

•
TRAINING IN DETAILED ENGINEFRING • PROCUREfENT AHO CONSTRUCTION

There are 11any International Engineering finas like Toyo. Technip.

Kellogg. Snu Progetti. Russian and RUlilnian vho have taken responsi-
bilities for the above services. to operate hand in hand vith Local
·Engineering organisation. Key personnel of the International Engineering
firm from the parent company are assigned to the Local Engineering
company and all cngi~ring. ;>rocurment and construction activity are
developed frm the Local Engineering office. Operating f.rom the Local
Engineering office and association of local personnel is one of·the
conditions of contract. This has the ·imense advantage in training arid
- -
in flow of doc111ent vhich otherwise would be very time cons111ing •

.TRAINING IN EQUIPMENT ENGINEERING

Many International Organisations like LllBllus. Fosterwheeler, NortOn.

Osct-.atz, Sctute-Koerting, Grahana as part of collaboration agresnent
.
provide training in detailed engineering, fabrication and inspection
c·; methods, for .Heat Exchangers, Trays, Waste Heat Boilers, Ejectors
fl (equipment which are of repetitive nature in any chemical process industry)
to enable local engineering ~ompanies, to develop such ~apability (inci-
dentally assures reliability to client) not only to engineer them but·
also to get it fabricated front any source. Such collaborations are
not part of any project services but as services for engineering of equi-
pment. 1-iembership of institutions such as Heat Transfer Research Inc.,
Fractionation Research Jnc., are useful means to keep technology up dated.

'-·· •• :-_ :. ..:r·..-.. ,, ~···.,: ··:·,.··"·.·····,,, ..·--·---~-··~ ..... - ..... -.....---·:

--''----'"-----"'-----"-~~----''-----"~~--'-~~~--~
..
-
 43

It is relevent to mention that traini!'S in Indian Engineering

.
nrganisation in any of the above areas mentioned is possible and is
: .. covered separately •

CONCLUSIONS

In the view of the authlr. considering the present level of ca-

pability of ENPPI personnel. training t~t would ~e imparted by the
....-' above • on the job• practises would generate self confidence arid self
reliance. The personnel can.also be sent to attend-sellinars organised.
for custolllers by reputed ampanies like UOP. IFP. Snn Progetti. Nuo-
. .
.vopignone and various other International Bodies. and to training courses
suggested under UNIOO .. _..

.~ ~:,
r-.

:9

..'
 .
----"'·--- .
. ·-·- - - .... __
44

PROCURDENT - SETTI~ UP THIS ACTIVITY .AT ENPPI

·-
1. INTRODOCTION

Hardware cost 60-70 i of the project cost and it is •st

_appropriate that procurement of hardware is kept under contro·~ of the
national fir11 ENPPI. Incidentally this affords an opportunity for
( :-.
•... -~

,
iL.· - ;: World Bank funding for the proposed plans for setting up refineries.
which encourages intemational ~titive biclcling •

... _.....- ._ ...... ,.. ····-·-·-·····-··....--··-;--···, --···-·-·· ~-·· -----···

 -- - -· - -- - ...:.- -~·-

45

2. SCOPE

Procuraent • as an activity. is necessarily to cover the

following •
1. Purchase.
Z. Inspection
3. Expediting
4. -Transportation to project site
· 5. Development of indigenously capable vendors.

3. OBJECTIVES

Having accepted this as the role of procuraent a clear sta-

tellent of objectives of the division wuld rftOVe any Blllbiguity in
its operation visavis other divisions of the COlllpiny.

3.1 To act as a responsibility centre for the efficient performance

of the procurement function in the COllpiny. through necessary
0

-
'
interfacing with other divisions / departments in the c0111pany
as well as external agencies.

3.2 To support project execution with timely ordering.and supply

of quality equipment and materials at the most competitive
prices •

..---·.· .... ----·--·--~--------------..·-·--------~-- ·--·-··ir---.. ····

 - ---

3.3 To identify equipment and uterials for procure.nt indi-

genously and develop vendors, sti•late a.petition in aras
where there is scarCity of vendors - Longtenl.

· 3.4 To arrange for inspection of equi.-ent - stagewise and fi•l

inspection before issue of Material acceptance certificate to
ensure tl)at they satisfy the prescribed stanciilnls of quality and
service. Also·to assist vendors in shop planning to ensure de-
livery according to schedule.
3.5 To perform the preonler and post order expediting within-the

cmpany and outside to ensure that the equipment and •terials

are actually •de available at the scheduled time, within the
overall responsibility of the project division for effective
and efficient excution of project in te,_ of time, cost and

quality.

3.6 To plal). and organize the traffic function for timely, economical
and safe transport of equ-is-nt and •terials to the project
sfte.

3.7 To plan •npower for current and potential fields of procure-

ment operations and to arrange training progr11m1es accordingly
Longtel"ll.

":_ - ·_..[ ______ ~

 --... .--.--.- . - - ---- ' ; . · - .. _ . s . . - - ___ ..

47

3.ll To develop and document policies and procedures and organise

a data bank to effectively monitor productivity
.
of the division .
and to aceo11plish the above mentioned objectives efficiently •

. - -·· ' ·- ··- •.. ,_. ________ ..... ·--·---··-···.··-- ............ ·-·-·"
, -· .. .. . . . ... ..... ... __ .,, .._ - ·-· .
 48

4. ORGANISATION CHART

Having delineated the objectives of the division it is relevent

to suggest a suitable organisational pattern for 11eeting the objec-
tives.

ORGANISATION CHART

• Ir----------
Manager (procurement)
I
l
Inspection * Traffic** Procurement***
and

IFore1gn
.
I Expediting
Development

Indigenous

I~
- Cement Others
- Steel

•
(J)
*
1. Initially the role may be limited to coordination with foreign ins-
pection agencies like Lloyds, Bureau de Veritas.

2. Regional and shop inspectors may be posted at the appropriate stage

of development.

3. Inspection coordinators at the headq~arters would monitor shop progress

to project team •

......- .......---~-- - - · - · · _ ... __...,...._~"+ ....-....-·-···--·-·····----~·--··· .... ·~--· ' ... -- ··-···-·
 -----------------------
·-·-- __,._ .· -·-·-. ---~ ..;.- ~ :. ·-- ....;:_ ----~- --

49

4. The specialists •:J be assigned to project site for any site ins-
pection work, initially and as the organisation grows a separate task
force for site inspection may be contemplated.

The role of traffic ccm1en~s imediately after issue of uterial acceptance

certificate by inspection. ·It is fully responsible till project site
advises receipt at site. It is also responsible f~• development of packing,
marking, and labeling standards for different equip1ent.

1. The role of procurement developiaent ~ld be to constantly update the

vendor list for different categories of equipnent and materials.

· 2. Develop new vendors.

3. Generate manuals for the division and keep it updated.

4. To generate a data bank for monitoring the productivity of the divhion

and exercise necessary management audit of the division.

5. Development of norms for measurement of progress at shop for uniformity

in reporting.
 so

5. OPERATING PLAN

In the initial stages i.e. when procurement activities are res-

tricted to one project it may be necessary that the procurement
· division both functionall~ and adllinistratively operate under the
control of the project •nagement, for the sil'ilple reason that project
manager is responsible for the timely execution of the project and
responsible for cost.

As •re and more projects are handled by the company the procurement
division can be centralised and assign only coordinators to the individual
project team.

The. purchase manager under the authority of PM is the only person

to correspond with vendors up to preorder stage.

l'he inspection manager under the authority of PM is the only

person to correspond with vendors in post order stage.

Financial concurrence of the recoanended vendor is to be ensured

by the purchase· manager.

The role of client in case of cost reimbursible contract would

be of funding the purchases as and when made. A lumpsum contract by
ENPPI for hardware is not advisable at the present stage of its growth,
as the liabilities would be heavy.·
 51

6. REPORTS

6. 1 Leve1 I report to management - mnthly

Major activities of the mnth

- Order placed
- Shop progress and equip11ent ready for despatch
- ·Equipment delivered to site

Major constraints of the month,delays due to

Vendor responses inadequate and poor.
- Technical evaluation
- coaaercial and Financial evaluation
- Shop delays.
- Transportation bottlenecks. -·

- Action plan for removal of constraints and areas requiring

management support.

-
f_.
l!-.•.
... -J

6.2 Material status report. - Monthly

ror each project handled a total material list with all items
listed would be handed to purchase with all scheduled dates filled
by project/ Project control.
 ·-- ..
52

Purchase I Inspection / Traffic wuld meticulously report on

each of the itells the status and issue the report in one consoli- -
dated fashion. In the initial stages the role of purchase wuld be

controlling followed by inspection / expediting I traffic as the

- project progresses.
The responsibility for issue of this report should be tell defined
and understood. As this is the only docment in the possession of
both project and construction site. giving a complete picture of

-
the equi.-ent status in detail and is a tool for construction planning
~
_the release of this document duly updated is to be ensured.

7. APPROACH PLAN

In order that this goal of procurement with the objectives and

• wort as stated above could be achieved the following is suggested.

ENPPI take responsibility for procurement, on cost reimbur-

stble basis, for a portion of the project for w~ich it is respon-
()

- sible for detailed engineering as well. It is likely that detailed

engineering work at ENPPI might cover a larger area of the project
and it is not necessary that it takes responsibility for all this
area, if found too large, in its procurement work.

Perhaps a system approach i.e water system, ?Ower /electrical

system, steam system, all utilities or off site facilities which
would include tankages ••• etc., can be considered.

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 53

What is relevent is that procurement of itas for which detailed

engineering is being/expected to be perfonaed by ENPPI wuld be an
approach which has clearly defined responsibility centres. An agree-
ment with main contractor, if any, defining the areas of responsi-
. bility would be an essential step in the right direction to avoid
being told •1 thought it is yours• •

.· -- ..... ..
,,. ......,....._ .. ~ ......·------··------. ·-
 54

In order to be able to take up this responsibility ENPPI may call

for assistance from any of the International Engineering Firms who
would be willing to assign a team of personnel to be located in EHPPI
of~ice to work in conjunction with ENPPI personnel. The personnel from
the I.E.F. are to be phased out according to the progress of detailed
engineering.

Initially the nomination of one purchase manager who would develop

the following would be appropriate.

1• Purchase procedure-
2. General purchase conditions
3. Vendor list
** 4. A preliminary division list of Indigenous, Foreign and
items of doubtful origin in conjunction with local
personnel.
5. Conmerciol analysis format
6. Purchase enquiry fonns

•
I .•
7. Purchase order fonns.

** To identify Indigenous shop capability the purcha~e manager may require

some assistance for short duration from Inspection Personnel who have
similar experience

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 -----·-:....

55

ALTERNATELY

A consultant regiStered with UNIOO with experience in procurement

management can be hired who would get the work done thro' ENPPI
per5onnel recruited locally. who have the background in purchase. ins-
pection and transportation in any of the companies. Besides UNIOO
resources have documents developed such as the following :

- General.conditions relating to plant and machinery drawn up

under the auspiees of UN Economic Coaaission of Europe.

- Supply of plant and machinery for export

- Additianal provision for supervision of erection of plant and

. machinery.

General conditions for erection of plant and machinery.

These are sources with fund of guidelines for procuronent.

 si

8. AREAS OF CONCERN

8.1 It is the ~n experience of less developed countries that tates

procureaent responsibility to find mechanical guarantees for equipment
(i8 months from date of shipment or 12 •nths frm date of start up)
lapses as project execution is norally takes 36 to 48 months. This
creates a situation which the project author-ities are ill equipped to
handle. A lot depends on vendor reputation which a nol"llillly reputed
vendor likes to •intain at all costs and do not strictly go by gua-
rantee clauses.

8.2 Quiet and fast action for loss and dilllilges in transit calls,for
special efforts as processing of insurance claims are norElly laborious
and CllDbersome.

8.3 It is aheys found necessary to have vendor specialist ready at

hand during erection and start up especially for rotating equipment,
heaters, package items such as boilers , turbo generators ••• etc.
The two activities of erection and start up will invariably be sta-
ggereC:. Availability of the specialist without loss of any construc-
tion time for the construction management team is an area of constraint
and conflict of the respective egencies and the role of client in all such
eventualities who take a pragmatic approach would help tie up such
situations •

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