Powder Plant of Bikaner Milk Union to Kolhapur Milk Union

Decision Making

Kolhapur District Co-operative Milk Union (Gokul) started its new dairy at MIDC, Gokul Shirgaon, Kolhapur in the year 1985.

NDDB had taken this project on turn-key basis and erected dairy of 2 lakh lit. per day capacity for handling milk and 10 MT per day capacity of powder plant. As soon as new dairy was constructed, Gokul started collecting more milk from Kolhapur district. Gokul started direct milk sale in Mumbai in the year 1988. In order to comply with the excess milk in flush season there was a need for establishing higher capacity of powder plant.

Meanwhile, NDDB approached Gokul dairy with a proposal that, there was a new brand powder plant lying idle at Bikaner dairy, Rajsthan. Bikaner dairy had developed “cold feet” because of low milk procurement.

Therefore, they suddenly requested NDDB to take back powder plant which was imported from The Netherlands. I was that time working as State Coordinator in NDDB, Mumbai and was also on the Board of Kolhapur Milk Union on behalf of NDDB. I raised the matter for purchasing this powder plant for Kolhapur Milk Union in their Board of Directors meeting and requested them to decide the matter.

The Board of Directors of Kolhapur Milk Union discussed the matter with their technical staff, and it was decided that the Board of Directors would visit Bikaner diary and verify themselves whether the powder plant was new and in a good condition. They also wanted to know from technical officers whether the plant was suitable for Kolhapur Milk Union and also whether it will be a wise decision. That time, the cost of powder plant was Rs. 7 crores which included 70% loan and 30% subsidy. The board members subsequently, visited Bikaner dairy and were satisfied with the status of the powder plant which was brand new and was lying idle. Even boxes were not opened.

Accordingly, the Kolhapur Milk Union wrote a letter to NDDB giving consent to the proposal of NDDB, however, they did not agree with the price. The Board was expecting that, in their opinion, “It was a secondhand plant because Bikaner dairy was not ready to use it, and therefore, the cost of transport from Bikaner Dairy to Kolhapur Milk Union should be borne by NDDB”.

Another issue was regarding levying interest from the date when the plant arrived in India from The Netherland. The Kolhapur Milk Union wanted the rate of interest to be levied only after erection at Kolhapur Union, and earlier interest till arrival at Kolhapur should be borne by NDDB. Further, there were some apprehensions about certain parts could be missing. Therefore, Kolhapur Milk Union insisted that the plant should be erected and if there were any parts missing, then expenses should not be charged to Kolhapur Milk Union, and NDDB should bear those expenses.

Normally, that was an era when union like Kolhapur Milk Union could not have thought of putting conditions to NDDB. The letter went to NDDB and was marked to engineering and accounts department and there was discussion among senior officers and as was expected, NDDB wrote back to Kolhapur Milk Union saying that NDDB did not agree with the conditions.

The Kolhapur Milk Union would have to accept “as is where is basis”, and any interest, transportation and expenses of missing parts would have to be borne by the Union. The Board of Directors were also apprehensive whether powder plant technology was sound enough and therefore, they consulted Shri. Pandita from “L & T”.

There was a meeting at NDDB, Mumbai office which was attended by senior officers from NDDB, Shri. Pandita from L & T, board of directors of Kolhapur Milk Union and their technical staff. Shri. Pandita told at the end of the meeting to Board of Directors of Kolhapur Milk Union that the technology used for powder plant was latest and was best in the world, and they were getting 30% subsidy. Further, the price of powder plant was on old purchase order and present cost of the powder plant was almost double. Therefore, Kolhapur Milk Union should accept the proposal of NDDB, he suggested.

The Board of directors of Kolhapur Milk Union were satisfied with the technical information, however, on the pricing side, they were still insisting that, NDDB should give them some relief. Therefore, Chairman, Kolhapur Milk Union, wrote a letter to NDDB for a meeting on this issue.

The meeting was organized in Anand, which was attended by Senior Officers from NDDB, Board of Directors of Kolhapur Milk Union, and Dr. Kurien himself.

In the meeting, Shri. Arun Narke, Chairman, Kolhapur Milk Union, put forward that NDDB should not charge unnecessary interest and transport cost and for missing parts if any. The attitude of both the parties in the meeting was positive.

Dr. Kurien had to resolve the issue with some win win formula. He decided that NDDB would not charge transportation and missing parts replacement charges whereas the Kolhapur Milk Union will have to bear interest part. There was no provision with NDDB for booking interest part which was always paid by the project. Both the parties were happy that they have gained something, and the matter was resolved.

This story clearly reveals the untiring efforts by the Board of Directors of Kolhapur Milk Union to get justice. They found out whether the proposal was technically and financially suitable for the union.

They went for consultation of 3rd party and did not readily believe their own officers and NDDB officers. On the other side, Dr. Kurien’s role was crucial because NDDB was in a tight spot. The Bikaner Milk Union was not in a position to use powder plant and therefore Kolhapur Milk Union was a right choice. Therefore, he agreed to some of the conditions put by Kolhapur Milk Union, and resolved the issue.

He had power to take a decision and he rightly did so.


Contributed by Dr. DV Ghanekar NDDB 1974- 2009 and Kolhapur Milk Producers Union 2009 continuing


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