Union power minister R.K. Singh recently announced that over the next three years, India will predominantly have prepaid meters obviating the need for electricity bills reaching the consumer. In this context, it is worth observing that Energy Efficiency Services Ltd (EESL) recently finalized a large tender for the procurement of prepaid meters.
The tender in question was that of procuring 10 million prepaid meters for Uttar Pradesh Power Corporation Ltd, for deployment in the northern state. According to information available with T&D India, EESL has awarded 50 per cent of the contract (or 5 million meters) to Larsen & Toubro. Jaipur-headquartered Genus Power Infrastructures will be supplying 3 million meters while Delhi-based Allied Engineering Works Pvt Ltd (AEW) has been mandated to supply 2 million units.
Ashutosh Goel, Managing Director, Allied Engineering Works, confirmed that it would be supplying 2 million prepaid energy meters to EESL over the next 12 months. Appreciating the robust and transparent procurement process of EESL, Goel was enthusiastic on participating on future tenders. He asserted that mass procurement has resulted in a significant drop in prices, to the tune of 30-35 per cent. (Click here for full interview with Ashutosh Goel)
In an earlier interaction with T&D India, S.C. Bhargava, Senior Vice President — Electrical & Automation, Larsen & Toubro, concurred that EESL’s mass procurement had pushed down prices. Bhargava observed that during its first drive of 5 million smart meters, the agency could procure meters at prices that were up to 40 per cent lower than retail market prices. “Today, smart meter prices in India are lower than anywhere else in the world,” observed Bhargava. L&T is amongst India’s leading energy meter manufacturer with an annual capacity of 8-9 million meters.
For Genus Power, the latest order of 3 million prepaid meters would be its second from EESL. In EESL’s very first tender, floated in July 2017, Genus was mandated to supply 1.35 million smart meters; the order was worth around Rs.450 crore.
According to information compiled by T&D India, EESL has floated three major tenders so far for procurement of energy meters:
Apart from this, there was a relatively smaller procurement exercise of 75,000 smart meters for New Delhi Municipal Corporation, initiated in April 2018.
The impact of reverse auction
EESL’s first tender for 5 million GPRS-based smart meters, floated in July 2017, saw an interesting but strange turn of events. When the bids were opened, Larsen & Toubro emerged as the L1 bidder. However, when the reverse auction (as provided for in the tendering process) was carried out, Central PSU ITI Ltd (formerly Indian Telephone Industries) outbid L&T with a quote that was 8 per cent lower. The remaining qualified bidders were asked to match the best price quoted by ITI, and finally the contract for 5 million smart meters was divided amongst four suppliers—ITI (2.5 million units), Genus Power Infrastructures (1.35 million units), Karnataka State Electronics (0.9 million units) and ZenMeter Solutions (0.25 million). The total cost of procurement worked out to Rs.1,680 crore. The contract for system integration, valued at around Rs.1,020 crore was placed on Larsen & Toubro.
What is intriguing and perhaps disconcerting is that two of these suppliers – ITI and Karnataka State Electronics (or KEONICS) do not have prior experience in manufacturing energy meters. Though no official communication was available from procurement agency EESL, it is reliably that ITI would be outsourcing its order to Hyderabad-based JnJ Power Systems Ltd and to China-based Shijiazhuang Kelin Electric Co Ltd. KEONICS would be fulfilling its 0.9 million meter order through Flash Electronics (India), a company registered in New Delhi but having its manufacturing unit near Pune in Maharashtra.