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Domestic bidders failed to match Philips’ lowest bid for EESL order

Domestic bidders failed to match Philips’ lowest bid for EESL order

By BizLED Bureau

Nov 14, 2016: Failing to match the lowest bid of Rs 38 per LED bulb from Philips Lighting India, a tender to procure 50 million LED bulbs issued by Energy Efficiency Services Limited(EESL), has not found any suitable bidders.

Once the lowest bid is approved, the next six bidders need to match the price for some of the offered quantity, according to EESL’s tender guidelines. However, since no bidder agreed to quote such low price, Philips bagged the tender of 50 million LED bulbs.

READ ALSO: Philips bids Rs 38 to bag Indian govt’s LED bulb order

According to Saurav Kumar, managing director, EESL, the tender clause says that the order should be distributed among six bidders, but since there were no other bidders to match the lowest bid price, the complete order went to Philips.

Domestic bidders failed to match Philips’ lowest bid for EESL order

Industry experts believe that Philips LED bulbs are coming from China. However, even the most reasonable Chinese LED bulb were priced around Rs 46, according to theindustry insiders. The other bidders include Osram, Crompton Greaves, NTL and Surya.

Most Indian LED firms obtain the central chip component from China and assemble LED bulbs in India. There were no constraints on importing LEDs, according to the tender document.

Domestic makers express concerns

Philips has offered a price that makes LED bulbs all the more reasonable while meeting all the tender requirements, according to a Philips spokesperson.  However, domestic manufacturers are now expressing concern over Philips’ lowest bid of Rs 38.

Most domestic LED makers believe thatRs 50-55 is a comfortable price across the industry. Even in the tender, the other bidders quoted around Rs 55, they said. Further, they believe that even imports from China are not possible at such low rates.

Some LED makers expressed that Philips’ bidis made in desperation with the aim to grab a chief market share in India.

READ ALSO: ESSL to raise $174 m bonds to expand LED scheme in India

Initially, Philips will import from its facilities in China and increase domestic capacity to supply 12 million LED bulbs a month from December 2016. Imports are an interim measure and will be phased out in the coming months when Philips’ domestic facility is completely operational, according to Kumar.

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