FOR WHOM THE BHEL TOLLS?
By K Vijayachandran
For whom the bhel tolls? This was the title of P Ramamurthy’s (PR) second book on BHEL-Siemens Collaboration. The first book was published in November 1978. It was titled: STOP BHEL’s DANGEROUS TRUCK WITH SIEMENS. He had qualified this book, published by the Center for Indian Trade Unions (CITU), as an investigative analysis of the process of mortgaging a core public sector undertaking to a West German multinational and its impact on other industries. He initiated this struggle from within and outside of the Indian Parliament and caught the attention of the Indian people in good measure.
PR was a Member of the Indian Parliament and for professionals like me, who had developed as the first generation power plant engineers in the country as part of BHEL (www.bhel.com), it was a protracted struggle from within that public sector for more than two years. Echoes of this struggle were heard even during the recent struggle against the divestment proposals by the UPA Government. Thanks to the uncompromising stand of the TU movement in the country, UPA Government was forced to given an assurance against the further divestment of BHEL and nine other Central Public Undertakings, known as Navaratna companies.
BHEL, like the other core sector public enterprises, founded by the Central Government as part of the national five year plans, had served the country as its technology generators in the power sector. Heavy machine building, mining and metallurgy, energy, electric power, transport, communications etc, identified as core sectors of the national economy, where a high level of technological self reliance was considered essential for rapid economic development of the country. Heavy Electricals India Ltd (HEL) was set up in 1958 in Bhopal, with the technical cooperation of Amalgamated Electrical Industries (AEI) of UK. This was the first of its kind in Indian subcontinent for the manufacture of steam turbines and turbo generators (up to 30 MW), hydro turbines and generators of medium capacity, transformers, switch-gear, high capacity motors etc, needed for the rapid electrification of the country.
The initial stock of technocrats, or the techies as per new jargon, needed for building up this heavy equipment industry in the country, was drawn from the Indian Railways. Fresh diploma holders and graduate engineers were recruited in large numbers, as engineering draftsmen, engineer trainees and supervisors. Large scale training facilities were set up at Bhopal for training up machinists, welders, fitters, foundry men, blacksmiths and all possible modern trades. These massive unprecedented training institutions, set up during the initial years of HEL Bhopal, continue to exist as top-class HRD centers for the engineering industry in the country, even today.
Engineers and technicians recruited by HEL had gone to AEI works in UK, for on the job training by British experts, who had come to India in large numbers to set up the production lines in HEL. However, even the capacities planned in HEL were considered grossly inadequate for the power development programs envisaged by Indian planners and the political leaders. Private industries of UK were found wanting in many respects, especially in training up Indian engineers and in transferring production technologies and design skills. Soviet Union and Czechoslovakia came in to give a big push to India’s electrification program, by setting up large scale facilities in three additional locations: Hardwar with Soviet Collaboration and Hyderabad and Trichy with Czechoslovak collaboration, in addition to the Bhopal plant that was already coming up.
Induction programs were organized by Russian and Czechoslovak experts on a large scale, to teach the basics in power plant engineering, manufacturing technologies and also imparting a working knowledge in Russian or Czech language. A separate company with headquarters at Delhi was formed in 1962, under the name and style, Bharat Heavy Electricals Limited (BHEL), for managing the massive technology collaborations with the Socialist Block that could cover the power development needs of the third, fourth and fifth five year plans.
Larger capacity turbo-sets of 60, 100, 120 and 220 MW and matching boilers and auxiliaries, large capacity hydro turbine generators (100 MW), as well as the complete range of electrical and mechanical equipment needed for the massive electrification of Indian subcontinent were covered under these collaboration agreements with socialist countries, involving more than a dozen enterprises. Later HEL was merged with BHEL and brought under a single corporate management.
New product lines were launched and new technical collaborations entered into with foreign companies, on the basis of well identified needs of the national economy. By the early seventies, BHEL started attracting international attention from the West as well as East, and this writer was the performance designer of the first set of power boilers to be designed, manufactured exported from the country: Destination was Port Dickson thermal power plant in Malaysia: Opening up to external markets had its own merits and demerits.
By mid seventies BHEL had grown into a large corporation with nearly three dozen technical collaborations and product lines, each with its own market possibilities, even outside of power sector. This had called for unification, diversification as well as standardization of production technologies at the corporate as well as unit level. As part of a massive re-organization of the engineering function in BHEL as a whole, autonomous Engineering Development Centers (EDCs) were established for each and every one of the three dozen major products.
This was then followed by the formation of Corporate Engineering and Marketing Functions and Corporate R&D: Corporate Planning, Corporate Human Resource Development and Corporate Finance functions were highly imaginative organizational innovations that transformed BHEL’s Head Quarters in Delhi into a multi product corporate entity. With all these, BHEL succeeded in setting up a highly progressive corporate engineering culture that turned out to be the envy of even the private sector, struggling under the tyranny semi-feudal cultural environs.
In terms of business development, BHEL was a roaring success, thanks to the discipline of national planning and the steady flow of orders from State Electricity Boards, National Thermal Power Corporation (www.ntpc.com) and other public utilities, and patronage extended by other public enterprises. Corporate Management of BHEL found it fit to declare the company as an International Citizen and started paying more and more attention on exports. It was even theorized that, if BHEL were to be competitive in the international market in the long run, a long-term association with a leading foreign multinational company was absolutely essential. Product profile of BHEL was argued to be similar to that of Siemens, a West German multinational, with twenty times the turnover of BHEL.
A preliminary understanding on technical collaboration was reached during the days of internal emergency, and a formal draft agreement initialled on 27 Sept 1977, soon after George Fernandez signed up as the Minister for Heavy Industries. SVS Raghavan took over as Chairman of BHEL on 1st Sept from V Krishnamurthy, who had moved in as the Secretary to Government for Heavy Industry: He was the chief architect of the BHEL-Siemens collaboration. It was an umbrella-type, broad based long term agreement, covering almost all products of BHEL, present as well as future, for a period of fifteen years and extendable by ten years.
According to the proposed deal, BHEL was entitled to sign collaboration agreements with Siemens for any or all of the products in Siemens range: Siemens were obliged to provide the technology on demand by BHEL and debit the charges to its account: In addition, BHEL would pay Siemens an annual royalty of 1.8 percent of its gross turnover. Laws of the land had permitted BHEL to go only for need-based and short-term technical collaborations. The new agreement was a violent attack on the policy of technological self-reliance, professed and practiced by the country after national independence.
The new Chairman, SVS Raghavan, was under pressure to finalise the deal at the earliest: However, he preferred the democratic route of circulating the draft agreement within the fairly large engineering community that has been developing rather rapidly, thanks to the ongoing corporate reforms within BHEL. Engineering Development Managers of nearly every product had expressed their reservations and registered their dissent on the umbrella tie-up collaboration: They preferred to continue with the need based approach in seeking new technical collaborations. .
Appraisals and apprehensions expressed by the rank and file engineers were summarized by F Haque, the Director Commercial of BHEL, in his official note of 4th April 1978, later reproduced in PR’s book and was taken as evidence by the Committee On Public Undertakings (COPU) headed by Jyotitmoy Basu. This had led to a massive rejection of the draft agreement by the rank and file in the organisation The Minister blamed the Chairman for the growing resistance against the umbrella agreement within BHEL and was asked to resign within six months of his appointment. Trade Unions of all political persuasions jointly served a unanimous protest note to the Minister on the ouster of an efficient and well-meaning Chairman: CITU was on the forefront of this national campaign, demanding the reinstatement of the ousted Chairman.
Engineers in BHEL did not have, at that time, any association or union to voice their collective dissent. But, patriotic sections of the engineering staff had no hesitation to join hands with the TU leaders to develop a nationwide debate on the umbrella collaboration, using whatever forums and methods that were available. They prepared critical notes and analysis of the umbrella deal and circulated them among the employees, newsmen and members of parliament, in support of the patriotic campaign against it by BHEL employees, supported by the TU movement at the all India level.
I remember the enthusiasm and dedication with which the late Palival and other LIC comrades of Delhi helped us in this protracted struggle. PR’s investigative analysis published by the CITU Center in Nov1978 was a landmark in this national debate. Newspapers and journals started publishing detailed reviews of the book, and scores of seminars were organized in metros and principal cities of the country by CITU and in good many of them, PR himself had participated.
BHEL top management, Siemens and Heavy Industries Ministry lined up prominent columnists in every major news paper and journals on the other side of this national debate and grass-root level campaigns. Prem Shanker Jha published his BHEL-Siemens Story in the Times of India and PR questioned the wrong priority given to exports in the search for technologies and concluded his long letter to editor in the following words: “When the needs of the (internal) market are to be met by ready-made technology and design capsules (from Siemens) for 15 or 25 years where is the scope for indigenous R&D? Actually whatever development has taken place in R&D will be quietly buried………The proposed agreement, in reality, is the severest possible condemnation of our undoubtedly talented engineering and scientific community”.
Rajyasabha discussed the Seamen’s deal on 20th March 1979 and thanks to PR’s critical exposures, the Union Cabinet was compelled to refer the draft deal to a committee of its own members. Prem Shanker Jha, who was also the editor of Economic Times, wrote an editorial on 14th April criticizing this cabinet decision. This editorial article, titled ‘Inexcusable Dithering’ had branded PR as an incompetent witness, while judging on issues of technology. PR was a Parliamentarian par excellence and Jha had to offer unconditional apologies.
Many people outside of CITU had thought that, the book in his name was written by somebody within BHEL. In my capacity as his closest collaborator, I would say that the book was entirely his creation. Myself and several other engineers and scientists had passed on to him quite a few documents and reports on the deal during the protracted struggle against it and he had a wealth of information from the parliamentary sources including the COPU. On return to Delhi from one of his long campaign tours, PR surprised me by handing over a few dozen pages of printed matter: He simply informed me that he had written a book on the Siemens deal and N Ram was helping him in its printing.
PR had asked me to read through carefully the proof and check for factual errors if any: He had, as I remember, strictly warned me against leaving any mark or corrections of my own on the paper. I returned the papers on the very next day. There was nothing much in the proof to correct, but for a single spelling mistake of a five letter word, on which I took the liberty of correcting in my own hand. Neither me nor PR had counted it to be of any consequence and the proof was cleared for printing. However, this wrongly spelt five letter word developed into something far more interesting within a few months.
Siemens lobby was quite powerful within BHEL organisation and Government: However, the policy prescription for umbrella collaboration with an MNC on a long term basis, in order to ensure competitiveness in international market had failed to find many takers. They counted it as a defeat and soon started victimisation and witch-hunting of those, who had helped the national campaign led by PR. A senior CBI officer of Bengal Cadre picked me up from my Office at Connaught Place, and took me in his car for questioning in his RK Puram cabin. He was very pleasant to begin with and wanted to know from me, the names of BHEL Officers, who had violated the Official Secret Act (OSA) by collaborating with PR.
I took pity for this Bengali officer who was forced to investigate on the leakage of information, and not on the crimes or wrongs committed against the country by officials and politicians, as alleged by PR in his well documented publication. This naturally infuriated the gentleman officer who instantly handed me over to a more businesslike Sub Inspector who was consistently rude with me from the very beginning. He wanted my specimen handwriting, but I refused to cooperate. Then he produced the good old galleys from the Syndicate Printers of Chennai, who had printed PR’s book, about an year ago.
True, there was the five letter word correction on page 51, and I was told that CBI knew whose handwriting it was. Many Delhi Newspapers reported the details of my encounter with CBI and Prabhu, a senior journalist in Financial Express at that time, put it out as a box item on the front page of his paper with a catchy headline: For whom the bhel tolls?
Collaborating with PR was charged as an offense under Official Secret Act (OSA) leading to questioning and harassment by CBI. For myself and my wife, who was also employed in BHEL as a structural engineer in the projects engineering division. It was a sort of protracted struggle for nearly two years and we decided to resign from BHEL and set up an engineering and management consultancy firm at Kochi. I had requested the management to relieve me on 31st Dec 1979 on completion of : However, on that very day evening when I was expecting my relief order I was suspended from service, pending inquiry by the Central Vigilance Commission (CVC) who had framed up a case against me alleging violation of OSA.
However, I refused to cooperate with the CVC and in the meanwhile Indira Gandhi came back to power in the 1980 General Elections. PR brought in a call attention motion in the Rajya Sahba on 26th April, on my victimization by BHEL management in the specific context of Siemens controversy which had been debated by the house more than once. He spoke extempore for nearly two hours on the deal: This was then followed by Kulkarni and several other members of Rajyasabha came in support of him.
It was my proud privilege to listen to this half day debate in the Indian Parliament, which came to a close with an assurance by R. Venkataraman, the new Minister for Heavy Industries and later President of India. CITU published an edited version of this extempore speech by PR under the title: For whom the BHEL tolls?
Charges against me for violating OSA were withdrawn and an inquiry was ordered to study and report the desirability of the Siemens deal: Later a commission headed by Dr. Rala Ramanna, the then Chairman of BARC, had summarily rejected it as totally undesirable. The anti-Siemens struggle of late seventies in BHEL had contributed in a big way to unite the TU movement in BHEL at the corporate level with a coverage of around 75,000 employees in some three dozen operating divisions spread all over the country.
The engineering and management staff of BHEL who were denied basic TU rights in the seventies have today a BHEL Executives Forum at the corporate level: K Ashok Rao, who played a lead role in the anti-Siemens struggle in BHEL is the patron of the All India Power Engineers Federation, today: His recent paper titled, Private generation-boon or bane?
Dr. A Gopalakrishnan the former Chairman of Atomic Energy Regulatory Board of India (AERBI) who had later put up a stiff fight against the US nuclear deal was very much a part of the anti-Siemens struggle while in BHEL. My interview with him on India’s nuclear deal with US may be read as a wordpress bolg: https://kvijaya40.com/2015/07/23/indo-us-nuclear-deal/
This blog is a slightly edited version of my article published by The Electricity Employees Federation India (CITU), as part of its PR Centenary celebrations in February 2007