Site Selection for a Plant / Project – Factors Considered

1. Introduction to Plant Site Selection

Site selection for a plant, keeping in view the various corporate objectives of the Company requires careful considerations of the numerous factors that would go into making the plant contribute towards its working environment and make it into a technologically and economically viable unit. Decisions are strategic, long-term and non repetitive in nature. A certain amount of imaginative planning for the future is also called for at the time of final decision about the site to be selected.

Generally sites for a new plant will be allocated according to the general industrial development policies of Govt. of India. The various factors which need to be considered for site selection are briefly touched upon in the foregoing paragraphs.

2. Location Factor for Site Selection

The location factor deserves careful attention simply because of its long term consequences.

Any mistake in selection of a proper location could prove to be costly. Improper location could be a constant source of higher cost, higher investment, difficult marketing and transportation, dissatisfied and frustrated employees and consumers, low availability of high caliber professionals, frequent interruptions of production and abnormal wastage. Once a plant is set up at a particular location, it is very difficult to shift later to a better location because of numerous economic, political and sociological reasons. Social reasons could include employee welfare, employment opportunities. Political reasons could be due to pursuance of a policy of regional development and planning especially in a developing country like India.

The location factor also requires that the following facilities are taken into consideration.

a. District Classification

To ensure that the license is obtained for locating the plant in a no-industry district.

b. Transportation Facilities

The raw materials and end products require to have uninterrupted receipt and dispatch facilities through good road connections, proper linking with ports and railheads. Possibility of an in-plant rail siding has to be looked into depending on the amount of raw materials and products to be handled.

Connection with Airports is important mainly from the point of view of easy movement of professionals. This is all the more important if foreign collaborations are involved in the plant.

c. Manpower Availability

Local availability of skilled and semi skilled manpower will add to the efficient running of the plant.

d. Industrial Infrastructure

This is important in view of the fact that all supporting services required for the successful operation of the plant like maintenance and repair of various machines and other items, availability of workshops, plant services, etc. may not be feasible to be generated within factory complex. Availability of communication facilities is also an important part of the infrastructure. An existing vibrant infrastructure in the vicinity is much preferred than the need based infrastructure getting developed after the plant commissioning.

e. Community Infrastructure

Now-a-days, generally, as the plant would be operating on a sophisticated technology, it would be essential to attract qualified professionals. This would involve ensuring a good quality living which in turn would depend on availability of good schools and colleges, medical services, good communication facilities, cultural and recreational opportunities, etc. Unless a good community infrastructure is available, it is found that attracting qualified professionals in rather difficult.

f. Availability of Raw Water

It is recommended that the plant be located in close proximity to a perennial source of water of adequate quantity which will meet the plant requirements and the other non plant requirements. Drawing the water by boring deep tube wells without the provision of a perennial source is not preferable because the ground water may be depleted at a future date.

In summary, the Natural Water Table and flooding history should be duly considered.

g. Effluent Disposal

The natural drainage facility for disposal of Effluent should be duly examined.

It would be economically advantageous if an effluent disposal facility after treatment, which can handle the produced quantity of effluent is readily available. Otherwise, transporting the effluent by a drainage, to a safe disposal area which is far away has to tackle the legal and ecological problems.

h. Availability of Power

Stable and uninterrupted power of required magnitude, without fluctuations in voltage and frequency is important for the successful operation of the plant.

Nearness to the available power facility will reduce the plant cost.

i. Wind and Seismic Factor

Prevailing wind direction, Maximum Wind Speed and seismic history of the site should be duly considered.

j. Availability of Industrial Gas

Industrial gas is now available at various places in our country from the Gas pipeline network.

Industrial gas is the preferred source of energy as it is more efficient and contributes very little towards industrial pollution. Now-a-days, for almost all plants, uninterrupted power supply is of great importance and a gas based captive steam power generation unit will be very advantageous.

Accordingly, nearness of the site to a gas distribution network will be of great advantage in view of long term planning and future expansions.

3. Site Size and Nature for Site Selection

The plot area and the topography should suit the plant requirements along with required township facilities and future expansions. The grade level of the entire area should be preferably almost same. If the plot area is not flat, it has to be levelled in the most economic way to suit the plant. The degree of required levelling and filling should be looked into.

Load bearing characteristics and acidity of the soil plays an important role in site selection.

Natural soil has got more load-bearing capacity as compared to filled soil. Consequently, the cost of the civil foundation will be less in natural soil because piling to support heavy loads may not be required whereas in case of filled soil piling may be required.

4. Ecology and Pollution for Site Selection

Now-a-days, there is a great deal of awareness towards maintenance of natural ecological balance. Regarding the effect of pollution from specific type of plants, social obligations are to be met. The nature of the site selected should preferably have some advantages to meet these requirements.

5. Quantitative Analysis for Site Selection

The above factors are considered at the time of site selection and the data collected are analyzed, generally by the weight-cum-rating method, in order to finalize recommendation of the potential site.

In the weight cum rating method, variable weights are assigned to each factor. Then each site is evaluated on a 0-5 sliding scale for each of these factors. The assignment of points for each site for each factor is obtained by multiplying the rating of the site by the weight of each factor.

The overall site rating is then obtained as the sum of the assigned points for each site.

The recommendation will be for the site having maximum overall rating.

Sl. No. Factor Factor Weights Site Rating 0-5 Sliding scale
Location 1 Location 2 Location 3
1. Location


2. Industrial Infrastructure


3. Community Infrastructure


4. Availability of water


5. Effluent disposal


6. Availability of Power


7. Availability of Gas


8. Site size and Nature


9. Ecology and Pollution