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EESL scraps smart meters order to Chinese firm

Thursday, 06 Aug 2020

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Energy Efficiency Services (EESL) has cancelled Rs 500 crore contract placed on a China-backed PT Hexing as it failed to comply with local content norms.

EESL will conduct fresh bidding for about 30 lakh smart meters in which, Indonesia-based PT Hexing that is backed by a Chinese firm, and other foreign firms will have to seek approval from the Department for Promotion of Industry and Internal Trade (DPIIT).

EESL had not begun deployment of the initial batch of smart meters that arrived from PT Hexing. The tender for procurement of two million smart meters was won by PT Hexing under global bidding about two years ago.

DPIIT under the Ministry of Commerce and Industry on 4 June 2020 modified public procurement norms to give preference to companies whose goods and services have more than 50 percent local content.

The revised order on public procurement classifies suppliers into Class-I, -II and non-local suppliers, based on which they will get preference in government purchases of goods and services.

The ministry’s latest order dated 28 July 2020 mandates that tenders for these 110 equipment and works can be awarded only to local companies with high localisation.

The equipment includes transformers, switch gears, cables and insulators, which are imported in large numbers in India despite available local capacity.

The ministry’s order is based on the 4 June 2020 order of DPIIT that provides for compulsory purchase preference to local suppliers.