Philips India, which won the contract in September to supply five crore LED bulbs under the government’s UJALA (Unnat Jyoti by Affordable LEDs for All) scheme, has provided the first few tranches of bulbs now – most of them, however, have been “made in China”.
This has come at a time when there have been various vociferous campaigns on the social media seeking a complete boycott of Chinese-made products in India. Philips India had won the contract in September this year to supply five crore 9-Watt LED bulbs to the Energy Efficiency Services Limited (EESL), the central government company that is implementing the UJALA scheme, within 150 days for Rs 38 per bulb.
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“The LED bulbs that are being supplied by Philips under the contract amount to 5 crore over a 5 month period. As indicated by them, initial lot is being imported from their facilities in China and they are ramping up their domestic capacity to provide 1.2 crore LED per months from December. The import, therefore, is an interim measure to ensure that they are able to match the schedule. The imports will be phased out, as per Philips, in a month or 2 when their domestic facility is fully operational,” said Saurabh Kumar, managing director, EESL, in response to the queries from The Indian Express.
Under UJALA scheme, EESL first gives out a contract to private firm (or firms) to provide certain amount of bulbs. Once those bulbs are obtained, they are given to government distribution firms across states. When a consumer goes to the distribution office to pay his bill, he can purchase these LED bulbs that are priced way below the market rate. Currently, Phillip’s 9-Watt LED bulbs are available in the range of Rs 130-190 apiece.
“As the global market leader in lighting, we procure LED bulbs from our own manufacturing setups across the globe and through a robust network of suppliers based in India…. We have built large scale manufacturing capacities for production and last year we supplied more than 1.5 crore LED bulbs to EESL manufactured in India. Owing to the huge volume of this particular order, a large ramp up was required, therefore some quantities for this order are going to be sourced out of our factories around the world, however a majority of supplies will be supplied from India,” said Harshavardhan Chitale, Vice Chairman and MD, Philips Lighting India.
In response to a query on how the firm was able to provide the bulbs at such a low price, Chitale said: ” While we cannot comment on specific tender prices, we can say that owing to the large volumes, we have offered a price that makes LED bulbs even more affordable to the end user, while meeting all the tender requirements. The tremendous rise in demand for LED bulbs across the country … has resulted in a huge volume growth, enabling us to deliver better prices through economies of scale, in a manner that maximises our shareholder value.”
The tender document had a condition that if the other firms are able to match the bidding price of the lowest bidder, they should also get a substantial share of supply contract. “As has been the practice in all EESL bids, there is a clause to distribute the order amongst 5-6 bidders who are technically qualified and are able to match the L1 price (which in this case was Philips). EESL followed the same principle and asked bidders upto L5 to match L1 price (of Philips). None of them agreed to do so, therefore, EESL, as RFP (Request for Proposal) indicated, gave the entire quantity to Philips who had indicated in their bid that they are willing to supply 5 crore quantity,” said Kumar.
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