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Bidding terms worry bulb makers

Controversy looms large over the government initiative of replacing
traditional incandescent bulbs by offering 10.5 million energy
saving lights free of cost, as local manufacturers say some bid
clauses may keep them out of the bidding to supply such bulbs. The
manufacturers alleged that at least nine contradictory conditions put
in the bid paper will prevent them from taking part in the bidding
process for supplying the energy saving compact fluorescent lights
(CFLs). They sought the prime minister's intervention in the bidding
process to make it suitable for the local companies. Rural
Electrification Board floated tender for supplying 10.5 million CFLs
on September 14 , and the bid closing date is October 27. The World
Bank (WB) funds the project. The estimated cost for 10.5 million
CFLs is $15 million, according to the WB. The government initiated
the programme to save electricity as Bangladesh is producing only 4
,300 MW against 5 ,200 MW demand in peak hours. It is estimated that
10 million CFLs would save 312 gigawatt power and $11.5 million a
year. The mega project for distributing CFLs has become lucrative
both to national and international energy saving light makers. As per
the tender document, a prospective bidder will have to show experience
certificate of supplying 20-33 lakh CFLs at a time. The local
manufacturers alleged that the clause was included to prevent them
from participating in the bidding. "At present, no local company has
such experience as the energy saving light market is just
flourishing in Bangladesh," said Kazi Mahbubur Rahman, president of
Bangladesh Efficient Lighting Manufacturers' Association, at a press
conference in Dhaka yesterday. He said local manufacturers can supply
40 percent energy saving lights of the project's 10.5 million bulbs.
There was discussion between the government and the local
manufacturers earlier, when the government assured them of collecting
at least 30 percent bulbs locally. Along with the market leaders --
Bangladesh Lamps Ltd, Energypac Electronics Ltd and Macro
Fabricators Ltd -- around 10 local companies are now producing nine
lakh energy saving lamps per month. Rahman demanded that the supply
amount should be reduced to 3-5 lakh at a time to ensure
participation of the local manufacturers in the bidding. The bid did
not tag any after-sales service requirement. Foreign companies, if
accepted for the project, will be able to withdraw all the money
against whatever they will supply by keeping only 2 percent as
security money. Vice President of the association Nurul Aktar said
such provision may harm the government initiative as no one will take
responsibility of quality of the products. He said in case of
electric product supply, a company must provide one year after-sales
service according to Public Procurement Policy. In line with the
policy, the company must keep 10 percent of its total supply cost as
security money. He also said the existing bidding process will not
ensure the products' quality. The present process does not allow the
government to check the technical specification first before
scrutinising financial proposal, Aktar said. "If the government fails
to ensure technical specification, there remains a chance to supply
substandard bulbs by non-brand importers," he said.