The rollout of smart meters is facing questions over the tender, selection of suppliers, payment mechanism and the companies involved.
Energy Efficiency Services Limited (EESL) last month issued the first tender for 5 million smart meters. Indian Telephone Industries (ITI) emerged the winner by quoting Rs 2,507 per meter. Sources said ITI thereafter sub-tendered the contract to four companies. The electrical equipment industry in a representation to the power ministry said none of the sub-contractors had the necessary specifications or certificate from the Bureau of Indian Standards (BIS).
One subcontractor, JnJ Powercom Systems, is alleged to have defaulted in its supply of meters in Tripura and is likely to be blacklisted, according to officials. Another subcontractor, Keonics, has been blacklisted in Karnataka for technical faults. The other two are Genus Power, a fairly large player, and a start-up, Zen Meter. “None of the companies except Genus has the necessary technical specifications and IS 16444 certification from BIS, which pertains to smart meters,” said an industry source. “The low price discovered could be at the behest of quality,” he added.
Saurabh Kumar, managing director of EESL, said he was unaware about the complaints. “ITI is a reputed company and it obviously matched all technical criteria to be eligible to participate in the bidding. We have taken bank guarantees of five years and these will be confiscated in case of any default,” Kumar said.
ITI outbid infrastructure major Larsen & Toubro to win the smart meter tender. It was followed by Genus and Keonics, which are its subcontractors now. Since these two companies could not match the price quoted by ITI, the whole contract went to ITI.
As subcontractor to ITI, JnJ Powercom will supply 2.8 million meters, Keonics and Genus 950,000 each and Zen Meter 250,000. The industry has also submitted to the power ministry that the payment schedule is flawed. “The schedule allows the company to earn 90 per cent of its cost in one year of supply but it has no O&M obligation. The industry in its representation to the power ministry said this could result in a potential failure of the programme,” a source said.
EESL has held a separate tender for system integrators to manage the smart meter system. Kumar added that there would be pre-despatch tests on the meters in a month and in case there was any deficiency, ITI would be blacklisted. He, however, pointed out the likelihood of that was minimal.