The technical bids, which opened on Thursday, will be first evaluated and then the financial bids of the qualifying companies will be opened sometime next week.
It may be mentioned that acting on the recommendation of the committee on Equipment Quality Control, the MVVNL, a subsidiary unit of the Uttar Pradesh Power Corporation Limited (UPPCL) has advertised for the purchase of as many as 50,000 3-star transformers and had set the condition that only those companies can supply the equipment which had a turnover of Rs 25 crore during the previous three years. With each transformer costing Rs 5,000, the total cost for the order of 50,000 transformers stands at Rs 250 crore.
The clause came up for a lot of criticism from the medium and small units of the state, under the umbrella of the Indian Industries Association. For this one condition effectively ruled out the possibility of almost all the small scale industries in UP bidding for the tender. "The state government has a policy to give purchase and price preference to the small scale industries (SSI) units in the state but this policy effectively rules out their participation," said DS Verma, executive director, IIA.
However, officials of the UPPCL defended the clause stating that it had been put to ensure quality. "In Uttar Pradesh, the transformer damage rate is a whopping 30% against the national average of 2% and this is one reason for the abysmal power situation in the state. The Equipment Quality Control Committee, formed by the Uttar Pradesh Electricity Regulatory Commission to monitor equipment quality last year had recommended that discoms procure conductors, transformers, metres, cable, and other materials according to defined parameters in an organised way. We are just following those recommendations. We decided to purchase only those transformers which have received the three-star rating from the Bureau of Energy Efficiency," said a senior official of the UPPCL, adding that there is no insurance of quality from local electrical manufacturing units, which manufacture transformers. "The local SSI units do not meet our technical specifications and the failure rate of such transformers is very high. To do away with that possibility, we have kept the clause so that only reputed companies can bid for it."
According to the recommendations of the committee, a strong equipment monitoring system must be put in place urgently and strict adherence to safety measures must be ensured uninterrupted power supply. "Our work was to investigate major equipment failures, find reasons behind them and suggest remedial measures. And we have found that huge transformer damage rate in UP is due to absence of proper specification for procurement of equipment as well as for vendor selection," said SC Srivastava, dean faculty IIT-Kanpur, electrical department and the chairman of the committee.