In a major relief for pumpset makers in the MSME (Micro, Small and Medium Enterprises) segment, the Andhra Pradesh High Court has stayed the tender by ‘Energy Efficiency Services’ (EESL) of the Union Power Ministry for buying 1.5 lakh submersible pumpsets in the state.

EESL recently floated a tender for procuring 1.5 lakh submersible pumpsets for AP and further plans to supply 2 million pumpsets free of cost to farmers throughout the country in the next three years.

“It has many clauses that prevent the participation of MSMEs,” said K K Rajan, President, Southern India Engineering Manufacturers’ Association (SIEMA), which filed a written petition in the HC to direct EESL to stop the proceedings of tender formalities.

The HC has given a stay order for a period of three weeks and also directed EESL not to finalise the tender, he said. “It is a well-known fact that MSMEs contribute to more than 50% of the total volume of pumpsets produced in the country. EESL intends to procure the pumpsets from three to seven big manufacturers only and not from MSMEs,” he alleged. “This will be a huge blow to the MSME pump manufacturers who fulfil all quality requirements of the tender,” Rajan stated.

“Through this tender EESL will become a monopoly pumpset supplier in India and procurement will be only from large manufacturers and not MSMEs,” he said. “Failing to incorporate MSMEs in the tender will lead to grave difficulties and many MSME units would fall sick, bankrupting them, leading to their closure,” the SIEMA President said.

“The above points were personally represented Kalraj Mishra, the Union Minister for MSMEs, during his visit to Coimbatore on July 15. Even after so many representations, EESL has not even considered any of our suggestions,” he said.

SIEMA, which represents the interests of pumpset makers and engineering manufacturers in the region wants the tender to be amended to enable participation of MSMEs. “There should be no restriction based on turnover. The minimum quantity to be supplied by a manufacturer should be reduced from 20000 to 1000 pumps,” SIEMA said.

“The performance guarantee should be reduced from 20% to 2% of the total contract value. Priority should be given for MSMEs to have maximum share up to 50% orders in the present and future tenders of EESL,” it said.

Source: The Times of India

Image Courtesy: The Times of India