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A Case Study of Government Procurement from 100 Years Ago

T.R. Raghunandan

2 September 2019

Years ago, on the eve of the centenary of the first hydroelectric power station built in India, at Shivasamudram in Karnataka, my wife Aditi and I investigated the procedures followed by the government of the princely state of Mysore in procuring the machinery and constructing of the power station. Our enquiries revealed a fascinating tale of how procurement was done. I reproduce below a newspaper article that we wrote, documenting the events of those early days.

Take the less frequented road from Bangalore to Mysore through Kanakapura and Malavalli, and Shivasamudram is easy to find. The roar of the falls soothes one’s ears before one rounds a bend in the road and comes across the breathtakingly beautiful sight of the falls as it plunges over a bluff into a misty cauldron in the forest below. Refresh yourselves at the century old guest house, where wooden electric fans and brass electrical switches take you to a bygone era. Then comes an exhilarating ride in a trolley to the base of the bluff over which the Cauvery plunges, where a doll’s house of a power station nestles. The polished patterned floor tiles of the softly lit interior of the station are broken only by the seven power turbines, still thrumming with life as they have done over the decades.

Over the last 120 years, Shivasamudram has been both a place for romance and despair. While several engineers remember their most fulfilling moments in its environment, many who worked at Shivasamudram hit the bottle to dispel loneliness. Nevertheless, anybody who has worked in Shivasamudram cannot but be aware of their being a part of a special heritage, of a proud asset of Karnataka. Now barely a handful of persons are alive who can recall the days when Shivasamudram represented the pinnacle of Karnataka’s technological achievements.

While information technology has been the technology buzzword of recent years, it was electricity a century back. Electricity could change night into day, it could heat, and it could run new-fangled machines. Barely a decade after the harnessing of this new creation by the western world the princely state of Mysore took its first step towards electrification. Thirty years after Shivasamudram power station was built, the government commissioned an official history of the state by M Gopalakrishnaia, an engineer associated with the project from its conception in 1899. This lucid book documents a story of vision, hidden in the dusty volumes of file noting and terse telegrams, behind the proud creation of the Shivasamudram power station. For the technology and commercial historian, the book provides an invaluable insight into the early days.

Ideas for utilisation the Shivasamudram falls for generating electricity were considered as early as 1894, when one Edmund Charrington applied to the Mysore government for a concession for developing a hydro-electric power station at the falls. The proposal was shut away and the matter dropped. It was in1899 that Captain A. C. J. De Lotbiniere, then Deputy Chief Engineer in Mysore State, inspired by an account of the Hydro-electric schemes at Niagara falls, came out with the feasibility of generating power at Shivasamudram, backed by the commercial viability of supplying electricity of supplying electricity to the Kolar Gold Mines. Even though preliminary studies had indicated that power supply to the mines from this project would be cheaper than steam power, the project was still grandiose. In the Niagara installation, power was transmitted over a distance of 26 miles. The direct distance from the Cauvery falls to the Gold minds is 90 miles and only in Germany had power been transmitted over a longer distance. When Captain De Lotbiniere placed this scheme before the Dewan of Mysore, Sir. K. Sheshadri Iyer, the project was not without opposition.

Finally in early 1899, the stage was set for conceiving and executing a classic instance of government procurement. How did the government go about it?

Advised by a Committee that he constituted, Captain De Lotbinier drew up conditions of contract with assistance from a renowned firm of consulting engineers, Messrs Russell Duncan and Co., of London, provided for the supply, carriage, erection and maintenance for one year of the plant as also for damages for delay in work completion, for arbitration and for alterations in design as work progresses. According to the contract, the electric plant had to be delivered, erected and to be in working order within 20 months of the acceptance for a further period of one year. As a consequence, power was to be available to the Kolar gold fields by March 1902.

In June 1899, the Mysore Government sent Captain De Lotbiniere to Europe and America to select those who would execute the project. The only communication that Captain De Lotbiniere had with his government was through the miracle technology of telegrams. All approvals had to be received by wire. Captain De Lotbiniere invited tenders for the generation plant and the transmission line from five leading American and continental electrical plant manufacturers, namely, the General Electric Company, America, the Westinghouse Company, England and America, Brown Boverie, a Swiss Company, Oerlikon, another Swiss Company and the General Electric Company of Berlin.

The lowest tender received by the government of Mysore was from Oerlikon. A flurry of telegraph communication ensued between De Lotbiniere and the Mysore government. The easiest thing to do was to select the lowest tenderer. However, Oerlikon’s bid wasn’t accepted. General Electric Company, which was then the largest electrical plant manufacturing company in the world, was chosen to execute this project. The government went by De Lotbiniere’s advice and he stuck his neck out to pick General Electric.

Immediately after Captain De Lotbiniere’s return to India in February 1900, work had to commence simultaneously on other important aspects of the project. First the government of India was requested to approve various concessions and contracts, a majority of which were to obtain a concession from the government of Madras regarding their share of the water at the falls, entering into agreements with Messrs. John Taylor and Sons and other individual mines at Kolar Gold Mines for the sale and purchase of power and entering into contracts with the chosen manufacturers. The government of India’s approvals were received by wire in March 1900, in six weeks after Capt. De Lotbiniere’s return to India.

Then came the next, important phase of government procurement, the actual construction and commissioning of the plant.

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