Session 5. Generating funds through consulting as an institutional activity

Session guide: Generating funds through consulting as an institutional activity
Case study: Food technology research institute of Dongal

DATE
TIME
FORMAT	Individual reading, small-group discussions, and a plenary session
TRAINER

OBJECTIVES
At the end of this session, participants should appreciate:
	1. The need to generate supplementary funds.
	2. The organization of consulting as an institutional activity.

INSTRUCTIONAL MATERIALS
	None.

REQUIRED READING
	Case study: Food Technology Research Institute of Dongal

BACKGROUND READING
	None.

SPECIAL EQUIPMENT AND AIDS
	Overhead projector and chalkboard

Session guide: Generating funds through consulting as an institutional activity

The Food Technology Research Institute (FTRI) case essentially deals with generation of supplementary funds through consulting as an institutional activity. Institutes like FTRI are fully supported by government. However, government subventions being limited, institutions such as FTRI are highly constrained in their work. Hence the need to generate funds from other sources.

While all agricultural research institutes may not have a direct linkage with the user industry, some of them will have linkages. A growing, food processing industry in Dongal certainly requires the scientific support of an institute like FTRI, and the linkage would be mutually advantageous.

Ask participants whether they see any revenue-generating linkage between their research institutes and the user group. In countries where a private seed industry has developed, there are demands made of plant breeders. In many cases, the seed industry supports and sponsors research to breed locally suitable cultivators.

While FTRI has the basic infrastructure and scientific manpower to undertake contracted research on a consultancy basis, it has not vigorously pursued that route as yet because it thinks that the industry does not appreciate its activities. Besides, in its current state of development, the local food industries are few of them in a position to pay for consultancy activities. The food processing industry in Dongal is still in its infancy and poorly organized.

The case raises the question of whether a research institute should undertake generation of supplementary funds on its own. Should consultancy be a legitimate institutional activity? Some important questions are:

(i) How should consultancy be organized? Should it be private or institutional? Because of the industry linkage and financial implications, it is desirable that all consulting be institutional. Private consulting would cause many problems.

(ii) Should consulting be an activity in addition to normal research work?

(iii) How should consulting be managed within the institute's administrative function?

(iv) Who will allocate consulting assignments in the institute? Can consulting be distributed across all divisions and scientists? There will be divisions and scientists who will get more opportunities for consulting than others. Since consulting income would be shared between the institute and the scientists, it might create conflicts between those who have done consulting and those who have not. How will these conflicts be managed?

(v) Because of the financial attractiveness, consulting may take disproportionately more time of a scientist than his or her research. How would this be monitored?

(vi) Should supporting and administrative staff have a share in consulting income?

Finally, the consulting rules of CSIR need to be discussed. Are these clear and adequate or should they be rewritten in view of past experience?

The case analysis could be concluded with a discussion on whether there are other revenue generating sources besides consulting and selling patents of research outputs, such as process know-how or manufacturing equipment.

Case study: Food technology research institute of Dongal

Food technology research institute of Dongal
Historical background
Buildings for FTRI
Organization
Consultancy services programme
Appendix 1 - The food processing industry in Dongal
Appendix 2 - Consultancy regulations of the council for scientific and industrial research, Dongal

Food technology research institute of Dongal

Mr.. Sarno Aioi, Director, Food Technology Research Institute (FTRI), Dongal, thoughtfully remarked to his deputy, "We have to do something to augment our resource position. The way things are going we may soon end up being another Animal Research Institute." He was referring to a sister organization under the Council of Scientific and Industrial Research (CSIR). The Animal Research Institute (ARI) had faced financial difficulties right from inception and had suffered setbacks on many fronts. More importantly, its entire research programme was at a standstill. The researchers, most of them highly trained, were sitting idle since there was no money to buy essential laboratory supplies. Most laboratory equipment had broken down long ago. As director of FTRI, Mr Sarno Aioi had a responsibility to ensure that this did not happen in his institute. He often wondered whether he could prevent decay of the institute, as it depended on the government budget for all its finances. Government support was limited and uncertain, because of a continuing grave economic crisis in the country (Tables 1 and 2).

Mr. Sarno Aioi's deputy, Ms Greta Aizol, had been listening to her senior's concern on and off for one and a half years. Over time, she was convinced, FTRI could tap the food processing industry in the country for support. She had seen this work well in the Central Food and Technological Research Institute (CFTRI) in Mysore (India) where she had spent about six months on a fellowship. Ms Aizol had given this suggestion to her director many times and Mr. Sarno Aioi always replied: "Yeah, it is a fine suggestion but does not hold much promise. Look at the infant food processing industry in Dongal. How can they support us? Besides, our linkage with the industry is rather weak. Even though we provide consultancy services, the industry does not take much advantage of it. Revenue generated from sponsored research has not been very high. Perhaps the industry does not need us or has little appreciation for our expertise."

Table 1 Budgetary subvention from the government (in millions of dodes)

Year	Budgeted	Approved	Published	Released
1985	11.01	10.82	10.75	10.73
	5.97	3.97	3.97	-
1986	32.45	29.47	29.00	28.74
	15.15	7.50	7.50	0.19
1987	50.24	45.24	33.20	30.54
	39.10	7.20	7.19	1.40
1988	47.42	56.15	54.00	-
	44.00	14.70	14.70	-

Table 2 Expenditure on scientific elements (in millions of dodes)

		1985	1986	1987	1988
Salaries
	Research Staff	5.98	7.02	8.91	11.88
	Technical Staff	1.97	2.75	3.69	4.79
Subtotal		7.95	9.77	12.60	16.67
Laboratory Supplies		0.24	0.79	3.24	17.54
Training of Scientific Staff
	Research Staff	0.45	0.89	0.87	0.907
	Technical Staff	0.35	0.22	0.15	0.35
Subtotal		0.80	1.11	1.02	1.257
Scientific Bulletins		0.02	0.03	0.015	0.09

In the meantime, the scientists were getting frustrated, and expressed their frustration openly. In a meeting held earlier in the afternoon, one of the scientists remarked: "... unless we start operating our pilot plant immediately, we will continue to be marooned. We should start operations with whatever equipment and facilities are available and operational. The demand for processed foods is growing and we must establish our role at this juncture and assert ourselves. If we don't act now, we'll have only ourselves to blame."

Later, the director and his deputy were once again discussing this matter. The director appeared worried and harassed. He was beginning to see some justification for his deputy's advice. Perhaps this was the right time.

Trouble was also brewing elsewhere. Mr. Sarno Aioi had heard that two senior scientists were planning to leave the institute for more challenging job opportunities. Others could also follow. Mr. Sarno Aioi did not take seriously the possibility of a mass exodus from the institute as job opportunities in Dongal were extremely limited and good jobs scarce.

Historical background

FTRI was established by the Dongal government on 1 October 1963, and incorporated in March 1965. When the Council for Scientific and Industrial Research (CSIR) was established in October 1968, FTRI became part of CSIR.

At the time of the establishment of FTRI, the food processing industry was attracting large capital investment in the form of plants for processing of fruits and vegetables, abattoirs and meat processing facilities, fish processing plants and fishery vessels, expanded cold storage facilities and additional grain and cocoa storage. FTRI was, therefore, conceived as a means for carrying out a coordinated programme of applied research in the storage, processing, preservation and marketing of foods with the aim of contributing towards the development of the food industry of the country. The conceptual background was set out in a FTRI document, reproduced here as Appendix 1. FTRI was to have an advisory role in assisting government in planning and implementing its policy of developing the national food industry and increasing agricultural productivity. It also had a provision for consultancy services for assisting the local food industry to improve and diversify its operations. FTRI started operations with the assistance of an FAO-executed UNDP project. The UNDP/FAO project lasted five years (October 1965 to September 1970). Assistance to FTRI took the form of provision of processing and laboratory equipment, attachment of international experts to the project, and the training abroad at post-graduate level of 16 professional staff in various aspects of food science and technology.

By the time the project ended, a corpus of knowledge useful to processors, marketing organizations, farmers and government ministries had been built up by the FAO experts and their Dongalian counterparts. However, FTRI could not take advantage of other provisions under the project, particularly the supply of processing equipment, because of non-completion of the construction work.

Buildings for FTRI

According to the timetable in the Project Document of the UNDP/FAO project, FTRI should have had permanent buildings at Riesa by 1968. However, this could not be achieved because of a coup d'état, which was followed by considerable political uncertainty and a stringent financial position. It was therefore found necessary to convert one of the staff bungalows into a laboratory. This was followed by construction of a series of prefabricated buildings for offices and laboratories in 1966 and 1967, in which the whole of FTRI activities were accommodated. What was supposed to be temporary accommodation had somehow become permanent. The accommodation included a pilot plant, research laboratories, administrative offices, library and workshops. Only the building for the pilot plant had been completed and partially equipped. Operations had yet to begin.

Organization

Scientific divisions
Team approach
Research work

FTRI was an institute under CSIR, with a staff of 158 (Table 3). It was headed by a director and governed by a management board (Figure 1).

Table 3 Staff strength of FTRI (as of September 1989)

Research-grade staff	32
Technical staff	23
Junior technical staff	31
Administrative staff	5
Junior administrative staff	55
Accounting staff	3
Junior accounting staff	9
Total	158

The management board was responsible for periodic review of FTRI's work, budget and financial supervision, management of estates and properties, appointment of junior staff and execution of capital development projects. The chairman of the management board was a member of the CSIR Council. The board was assisted in its work by scientific and administrative committees. The scientific committee was largely composed of chief and principal research officers. It was responsible for the research programme, and recommended the research programme to CSIR, undertook periodic reviews of the progress of research work, and considered budgetary implications of the research programme.

The administrative committee had representation from various segments: researchers, trade unions, staff, etc. Its main function was to supervise FTRI's financial and administrative matters. It also acted as a disciplinary committee.

Day-to-day administration and liaison with external agencies were the responsibility of the director, who was assisted by a deputy director. While the director was on a six-year, renewable contract, the deputy director was rotated every two years from among the senior scientific staff.

Figure 1 Organizational Structure of FTRI, Dongal

Scientific divisions

The activities of FTRI were carried out through six scientific divisions, each headed by a senior scientist, who had administrative responsibility for the division. The Administration and Accounts units played a supporting role.

(i) The Processing Division initiated studies on processing and preservation techniques and methods, and collated local classified methods of processing of raw foodstuffs, intermediate food materials and processing and packaging of finished products. It also carried out the handling and initial preparation of materials for pilot studies.

(ii) The Engineering Division initiated studies to identify engineering firms that were capable of manufacturing machines or components for food industries. Further, it developed, modified and tested machinery and equipment suitable for food processing industries and the institute's research programme.

(iii) The Analysis Division undertook chemical, biochemical and microbiological analyses of foodstuffs and allied materials for standards, quality control and hygiene. It undertook biological assays of food substances and developed baby and infant food formulations based upon high-protein flours from vegetable sources.

There was a move to create a separate storage Division by removing it from the Analysis Division.

(iv) The Economics and Consumption Division carried out studies into problems of viability and feasibility of the food industry and of food products, and of operational systems originating from the institute and industry. It conducted studies and sensory evaluation of traditional food preparations and manufactured foods. It carried out field surveys on food utilization, dietary patterns and food habits.

(v) The Information Division collected and disseminated scientific information through publications, public relations and library, photographic and audiovisual services. It also collected information on research projects of interest in other institutions, both local and abroad.

(vi) The Pilot Plant Division was designed to assemble a range of equipment and other facilities to carry out pilot-scale investigations into food products already developed on a laboratory scale. It thus constituted the developmental stage of the work of the institute towards industrial production. The construction of the pilot plant was started during the joint UNDP/FAO/Government of Dongal project. The pilot plant buildings were to have been completed by the end of 1968 to enable UNDP/FAO to provide the equipment. The buildings were, however, not completed until 1975, long after the joint project had officially ended in 1970. The pilot plant buildings occupied a total floor area of 1200 m², and consisted of wet- and dry-processing halls, three small laboratories, and ten walk-in cold rooms with a total capacity of 250 t.

There were some 30 items of equipment in the pilot plant. Some were already operational, some were lacking essential parts, and some were not yet installed. These were now in danger-of. deteriorating for lack of use.

Since the pilot plant had not been completed, it was not been possible for FTRI to commercialize the many laboratory results obtained through research. Unless tested on a pilot scale, product development was incomplete. The pilot plant was, thus, an integral part of the research programme of FTRI.

Team approach

FTRI had evolved a multidisciplinary approach in its work. The personnel for a given project could be drawn from either the institute staff or from outside on a collaborative basis. Individual approaches were discouraged, unless special circumstances warranted it. The project team was maintained as a unit at all times. Each project had a leader, who was supported by scientific and technical staff. The reporting relationship was: research project leader to project coordinator to research coordination committee. Regular meetings were held to monitor the progress of the research projects and resolve problems. At any given point of time, a scientist should not be involved in more than two projects.

Each research proposal encompassed financial planning. The scientists had to provide estimates for capital and recurrent expenditure for the project. This included funds for equipment, chemicals, consumables and materials.

Research work

Institute research results which had found application included:

· improved fish smoking equipment (Chorkor smoker), which significantly increased smoked fish output, saved on smoking time and fuel consumption, reduced labour input and improved the quality of the smoked fish. The smoker was readily adopted by the traditional fish smokers, particularly at Chorkor beach in Adra;

· development of a deodorizer plant for the vegetable oil industry;

· softening the locally milled hard wheat flour with cassava starch for use in the baking industry;

· use of local starchy crops for bread making;

· production of cowpea flour;

· production of dehydrated, fermented maize meal;

· developing instant fufu powder; and

· development of various spreads, such as peanut butter, mayonnaise and salad creams.

Some of the research awaiting industrial adoption included production of tatale mix, wines from local fruits, refining and deodorization of shea fat, fish crackers and flakes, barn-corn, corned meat products, and fruit preservation, including dehydration and brining.

Several research projects, although completed, could not be implemented because of their narrow scope. They were also not backed by the feasibility studies needed to induce entrepreneurs to undertake and transform the results into large-scale production.

Consultancy services programme

Types of consultancies

Consulting was an institutional activity in FTRI, and was governed by the rules of CSIR (see Appendix 2 to this Case study). The institute undertook research and provided consultancy services on problems related to food processing, preservation, storage and marketing. Advice to industry covered food analysis, quality control, product formulation, product development and improvement, and marketing and distribution of food. Revenue earned through consulting is shown in Table 4.

Table 4 Income from sources other than government subvention (in millions of dodes)

Food Processing Industry (for analyses, processing, etc.)	1985	1986	1987	1988
Tema Food Complex	0.03	0.05	0.01	0.13
Dongal National Procurement Agency	0.12	0.02	0.11	0.05
Quality Meat Products Co.	0.01	-	-	-
Cocoa Processing Co. Ltd.	0.03	0.04	0.03	0.05
Forest Products Research Inst.	-	0.01	-	-
Dongal Libyan Arab Holdings Co. Ltd.	0.04	-	0.02	0.04
Greater Adra Poultry Farmers' Association	-	-	-	0.05
World Food Programme	-	-	-	0.04
Dongal Export Promotion Council	-	-	0.05	0.03
Allied Foods Ltd.	0.06	0.18	0.24	0.59
Other sources	0.29	0.30	0.46	0.98

Consulting took the form of:

(i) for a minimal fee, placing the microbiological and chemistry laboratories at the disposal of the food industry for analyses, quality control and determination of microbiological safety of foods; and

(ii) Responding to specific requests for the formulation and development of foods by external agencies, including

- the development - based on local foods - of army ration packs for the Dongal armed forces;

- the development of a tomato, onion and salt preparation, called 'tomonion,' for use as a manufacturing ingredient by Cadbury Dongal Ltd (later Allied Food Industries Ltd);

- assistance to Rhode Island University in carrying out studies on the local state-of-the-art for fish handling, from the point of harvest through processing and packaging to storage;

- an FAO/CECAF fish project involving investigation into post-harvest fish processing technology, embracing some West and eastern African countries; and

- providing technical services for a nominal fee.

Even though consultancies formed part of FTRI's general research activities, they differed from normal programme activities as they were commissioned and paid for by outside agencies. They were accorded the status of institute projects, and the staff working on them received due credit.

Types of consultancies

Consultancies were of several types:

· Full consultancies Research work from large industries, government agencies, institutions or well established business organizations were treated as full consultancies. Usually they had large budgetary outlays and required collaborative approaches. Hence, consultation fees included the cost of materials, labour, overheads and profit to FTRI.

· Advisory services Research work from small business and organizations which could afford only a small budget were treated as advisory services and charged nominal fees.

· Routine analytical services FTRI conducted routine services for the food industry in chemical, nutritional, microbiological and organoleptic analyses.

· Actual food processing work and other services Services were rendered in food processing activities such as milling, dehydration and packaging. Other services included fabrication and repair of equipment, economic feasibility studies, general information and supply of data.

Appendix 1 - The food processing industry in Dongal¹

^1. Abstracted from an FTRI internal document.

Traditionally, Dongal has depended mainly on the export of primary agricultural products, forests products, and minerals for its foreign exchange earnings. Since the world market for primary agriculture commodities has continued to be low with no signs of any recovery whatsoever, it has become imperative to explore new possibilities and increase revenue through export of value-added products. There are good prospects for growth of the food processing industry in Dongal.

Soon after gaining independence in 1956, Dongal set up a number of food processing industries covering meat, fish, vegetable oils, fruits and vegetables, dairy products, flour milling and baking, cocoa, brewing and distilling, sugar refining and confectionery, and alcoholic and non-alcoholic beverage production, currently, there are about 350 registered food and beverages processing plants of varying sizes. In addition, there are several small-scale, cottage-industry processing establishments spread out in the rural areas. By and large, the food processing units have developed on their own in response to a small domestic demand. Most of these sell their products locally, while a few have a limited export trade.

Constraints

Availability of raw materials has been an important constraint in the development of food processing industries in Dongal. Since there was no concrete strategy to enhance production of local raw material, the food processing industry faced severe competition from household demand for limited supply of raw material. This resulted in a very low capacity utilization (estimated at about 30%) and high cost of production, leading to non-competitively priced goods. A glaring example is the prohibitive cost of processed fruits, which has severely restricted their demand. Even otherwise, demand for processed fruits is very low, since Dongalians prefer fresh fruit.

The processed food requirements of Dongal are mostly met by direct imports. In some cases, raw materials are imported in substantial quantities for processing at home. Increasing difficulties in importing raw materials have adversely affected the indigenous food processing industries. For example, two sugar mills, with a total annual production capacity of about 45 000 t, have been out of production since 1982 for want of raw material. Under the prevailing market conditions, farmers prefer to grow paddy or convert the sugar cane into alcohol. In the face of an acute shortage of sugar supply and inability to import large quantities because of severe foreign exchange restrictions, efforts have been made to increase domestic sugar production through small-scale sugar plants established under the National Board for Small-Scale Industries. However, this is not sufficient. The resuscitation of the sugar growing and sugar processing industry is essential to manufacture value-added products in the baking, beverage, confectionery, brewing, fondant and pharmaceutical industries.

Supply of milk and milk products is heavily dependent upon imported raw materials owing to insufficient cattle in the country. This has affected the direct consumption of milk products, and also the leather industry.

Edible oil production is much below requirements, even though a number of new edible oils from soybean, sunflower and rapeseed have been introduced in recent years to supplement the traditional palm, groundnut, coconut and palm kernel oils. Whilst commercial milling of shea butter has only begun within the last year and a half, most oil expellers brought into the country in anticipation of good business have lain idle for want of oilseeds, particularly groundnuts. For quite some time, much of the groundnut production has been diverted to other uses. Production of groundnut, coconut and other oilseeds, including soybean, should be around 160 000 t/year in order to keep the oil mills busy and ease the domestic edible oil supply position.

A few fruit canning industries appear to be doing well particularly in the processing of pineapples and citrus into a variety of products, including slices, juices, marmalades and jams for both domestic consumption and export. In contrast, vegetable processing has not caught on. It is not uncommon to see large quantities of tomatoes, eggplant, okra and pepper rot away during the glut period, and yet there is an acute shortage during the lean period. An efficient system of coordination is required between vegetable farmers and processors.

Non-availability of raw materials has also constrained adoption of some of the products developed by FTRI. For example, FTRI developed instant fufu powders from cassava, plantain and yam in 1967. This was marketed by a private entrepreneur for some time in local supermarkets. However, its production came to a standstill, probably owing to the non-availability or high cost of raw cassava tubers.

Poor business prospects

Food processors face other problems, such as obsolete or unserviceable equipment and a poor financial base for an aggressive business. One food processing industrialist remarked: "There is no point investing if you are going to be faced with production at 30% capacity. You will only be compounding your misery." To top it all, there is no provision whatsoever for institutional finance for capital investment in food processing industry.

Technology constraints

Despite a strong science and technology infrastructure, the industry mainly depends on traditional technologies, which are not always efficient, safe or hygienic.

Local engineering companies have designed and fabricated food processing equipment to help the small-scale, agro-based industries. Some of this equipment is widely used in the baking and cereal, cassava and fish processing industries. However, these efforts are not effectively backed by research and development.

At the policy level, the food processing subsector in Dongal is constrained by lack of political and administrative commitment, which has meant inadequate fiscal appropriations to the science and technology sector. This has necessitated reliance on foreign assistance, which has been insufficient and has often supported projects with little bearing on local problems. There is also the problem of poor selection of research and development programmes and their utility to the local food processing industry.

Science and technology infrastructure

Dongal has a fairly well established science and technology infrastructure. However, this will have to be properly strengthened and directed. Currently, research and development and technical services are provided by:

· the CSIR institutes, like FTRI and the Industrial Research Institute,
· the agriculture, science and engineering faculties of the three universities, and
· the Dongal Standards Board.

Engineering support is provided by food processing equipment manufacturing and services establishments, such as the agricultural engineering and small-scale engineering companies. Education and training needs are handled by the universities, polytechnics and specialist training colleges.

Food research institutions and organizations have undertaken research projects geared towards improving production efficiency, new product development and quality enhancement. However, their results have not been fully utilized by the industry, perhaps because of communication gaps.

The science and technology institutions are scattered and their efforts and activities are not properly coordinated. Consequently there are very weak linkages among the science and technology organizations, and between these organizations and the food processing industry. In many cases, the orientation of research and development programmes has not taken full account of local problems.

Agenda for the future

Notwithstanding the poor performance of the food processing industry, there is an increasing realization that the industry has to be improved through appropriate measures. Losses during transportation, marketing, storage and inefficient processing have to be minimized. There is need for science and technology support to

· increase production efficiency and improve product quality,

· improve raw material handling, processing, packaging, storage, marketing and by-product utilization, and

· develop new and convenient foods.

Realizing the importance and potential of the food processing industry, the government has embarked on a rehabilitation programme, with emphasis on adoption of appropriate and efficient local technologies to replace costly - and in many cases even unsuitable - imported technologies. Important measures envisaged include:

· Processing of indigenous cereals, which constitute the bulk of staples, would be organized to attain the same level of technology-as non-indigenous cereals. The technologies employed in the oil extraction industry would be upgraded to increase recoveries substantially.

· Agricultural research and development will be used to increase production of raw materials of suitable processing characteristics for the industry. There is ample scope for improving the raw material base. The land of Dongal is still green and unspent, since the slowly encroaching desert of Seda has not yet consumed the green. As agriculture acquires new dimensions, the problem of availability of raw materials will be eased and reliance on imports will be reduced. This has been amply demonstrated by intensification of oil palm production. This has assured sufficient supply of palm oil to the soap industry and simultaneously reduced imports substantially.

· Adoption of existing preprocessing technologies for the maintenance of quality of perishable raw materials such as fish, meat, tomatoes, etc.

· Development of soft drink beverages from local fruits and vegetables in preference to imported synthetic beverages whose nutritive value is practically nil.

· Increasing emphasis on export of value-added products rather than raw materials.

· Development of the packaging industry to alleviate the problems encountered by the food and beverage manufacturers in obtaining suitable packaging materials for their products. Emphasis will be laid on providing standard containers for small-scale food and beverage processors who cannot afford their own moulds.

Given the prospects for growth in the food processing industry in Dongal, organizations like FTRI have an important role to play.

Appendix 2 - Consultancy regulations of the council for scientific and industrial research, Dongal

1. Definition

Consultancy is any professional work undertaken by the institute/unit which involves the use of the institute's time and/or resources.

2. Justification

a. Consultancy offers opportunity for the application of research results and the development of new lines of research.

b. The Council for Scientific and Industrial Research organizes useful and meaningful consultancy services for the purposes of professional advancement of staff and other considerations such as broadening one's research experience.

c. The Government recognizes consultancy as a source of revenue for the running of institutes.

d. Consultancy offers opportunities for individuals to make full use of their capabilities and enjoy reasonable benefits from the service they so provide.

3. Scope

Consultancy may originate as a formal request by an outside agency to the institute for the use of facilities, knowledge or experience in the solution of short-term problems.

4. Time Limit

Consultancy may be part time or full time.

5. Criteria for Accepting Consultancy

Consultancy should generally satisfy the condition that the job is relevant to the overall research activities of the institute, and, in addition, satisfy any of the following conditions:

a. that it is of a type that can be integrated into the research programme of the institute;

b. that it offers opportunity for the application of research results of the institute; or

c. that it offers opportunity for institutes to make full use of their capabilities.

6. Conditions

a. All amounts receivable for the project shall be deposited into a separate "Consultancy Account" to be operated by the institute.

b. There shall be an Institute Consultancy Committee, comprising the Director, as Chair, all Heads of Division and a Trade Union Committee representative, which shall ensure that:

(i) the job will not have an adverse effect on the work of the individual; ideally an officer should work on only one consultancy project at a time;

(ii) that the consultant declare, through the Director General, CSIR, that she or he (the consultant) will undertake the consultancy in his or her private capacity and that the Council shall not be liable for any claims which may arise out of the consultancy; and

(iii) an indemnity form shall be completed in triplicate, the original duly stamped at the appropriate rate, and deposited with the Director General, CSIR.

c. There shall be no monetary limit on consultancy undertaken by an institute.

d. The Director General, CSIR, shall be informed promptly of all consultancies to be undertaken by an institute.

e. The Director shall report regularly to the Management Board of the institute on consultancy work undertaken by the institute, and information copies of such reports should be sent to the Secretariat of the CSIR.

7. Consultancy by Institute Determination of Net Fees

The net fee shall be the resultant figures after deduction of all expenses, including costs due to the institute. The expenses include the following, which should also serve as guidelines for costing prospective projects:

1. Transport costs

2. Salary based on work hours (add 25 per cent)

3. All standard allowances

'All standard allowances' includes per diem/daily subsistence allowances, risk and discomfort allowances and other services for which the government has already provided, and should be debited to the project for the period of the consultancy. These include rent allowance and all statutory benefits like social security, superannuation, etc.

4. A proportionate charge for office space and facilities and other non-expendable materials where applicable.

5. Insurance premium on the project where appropriate.

6. Cost of expendable materials like stationery, chemicals, equipment, glassware, etc.

7. Cost of supporting services, such as administrative services, accounting services, computer services, etc.

At the end of the project, when all these deductions have been made, the balance will be the net profit to be shared. However, all expenses on non-expendable items like allowances and use of office space, payable to the institute but for which government has already provided (viz items 3 and 4 above) should be divided into two, with one-half (50 per cent) being added to the net profit to be shared by the consultants and supporting staff parts.

8. Administration of Funds for Consultancy Work

a. The client shall pay to the institute any amounts which become due in accordance with the agreement.

b. The accountant of the institute shall render an accurate statement of account to the Director of the institute, a copy of which shall be sent to the consultant.

c. The Director shall, within 3 months of completion of a consultancy, provide an audited statement of account concerning the consultancy project. (The audit shall be done by the Council's Internal Auditor.)

d. The operations of the financial aspects of the consultancy shall conform to the financial and exchange regulations.

9. Apportionment of Fees

The apportionment of net fee shall be as follows:

(i) 70 per cent to the institute;

(ii) 30 per cent to the consultant(s) and supporting staff (with 15 per cent tax deductible at source from payments to consultants and support staff)

10. Reporting and responsibility

The consultant shall:

(i) submit a report to the Director at the end of the project; a copy of the report shall be sent to the Director General, CSIR; and

(ii) take good care of any institute facilities used in the work, and shall be liable for any damage caused to such facilities.

11. Central Research Fund from Consultancy Revenue

Fifteen per cent of the funds that would accrue to an institute from consultancy fees shall be paid into a Central Research Fund at the CSIR Secretariat to be used in supporting worthwhile research to be determined by the Council. The disbursement of this fund shall be entrusted to the Finance and Development Committee of the Council.

12. Procedure

a. An officer wishing to undertake a consultancy shall apply to the institute Director in writing, stating:

(i) the name and address of the client;

(ii) the type and nature of consultancy;

(iii) approximate duration;

(iv) the extent to which institute's facilities would be required (i.e., equipment, staff, etc.);

(v) other facilities required; and

(vi) other current consultancies or institutional tasks.

An application form designed for the purpose (sample attached at the end of these rules) must be completed in triplicate, a copy of which shall be forwarded to the Director General, CSIR.

b. Consultancy work by an individual or a team may be authorized by the Director of the institute.

c. All consultancy work originating from outside the country shall be referred to the Director General, CSIR, with a copy of the agreement for approval.

d. A Director of an institute wishing to undertake personal consultancy work shall obtain the approval of the Director General, CSIR.

e. The application must be processed within 10 working days and the applicant immediately informed about the decision.

The Director shall report regularly to the Management Board of the institute on consultancy work undertaken by the institute, and information copies of such reports should be sent to the Secretariat of the CSIR.

13. Profit Margin

This shall be calculated at a rate of 15 per cent of the total cost of the project.

Attachment: Project costing form

PROJECT COSTING FORM

Confidential

For internal use only. To be filled in in triplicate and sent to the Director. Please see instructions at the end of the form.

GENERAL INFORMATION
Title (brief)
Discipline/Area
Support	Internal	Sponsored
Probable dates	From:	to:
Project coordinator
PROJECT COSTING
Salaries (researchers)	Days	Rate/day	Cost
Support staff	Days	Rate/day
Farm labour
Cost of field experiment
Consumables
Capital equipment to be purchased (list)
Travel and per diem
Computer charges
Postage, electricity, transport
Other charges (specify)

FOR SPONSORED PROJECTS
Contact person for client
Name
Designation
Address
Telephone/Fax/E-mail
Item		Value
Estimated project cost (including salaries and consumables)
Institutional overhead, including charges for postage, electricity, and transport (charged at a flat rate of, say, 20% of the total calculated above under project costing
Budget approved by the client
Payment Schedule:	Date
Initial payment
Intermediate payment
Intermediate payment
Final payment
Approved	Project Coordinator Date	Director Date