Enhancing Decision Making Process for Awarding of Nuclear Energy Contracts in India

//Enhancing Decision Making Process for Awarding of Nuclear Energy Contracts in India

Current Supply Side Scenario

Terms of the contract:

Limited and small customer base has been a prevalent problem for the past three or four decades. Industry believes implementation of the fleet mode is a good and strategic decision, since the 12 reactors in the fleet mode has attracted businesses as they see continual potential for the next ten to twelve years.

Considering all the advancements there are still changes to be made to few things like Terms of the Contract. The terms of contracts have been untouched and not changed since a long time, with the changing times these things should be re-looked.

Tendering process:

Reforms should be made with regards to the alignment of date and price of the bid. There is tremendous ambiguity when it comes to opening of the bid price. Particularly for the Indian market, if the technical assessment is done in 90 or 120 days there is still ambiguity when the price bids open or if the buyer wants to go ahead and spend more time in further assessing the bid.

Furthermore, after putting forward the best rate for the tender, L1 bidder is selected, this bidder is forced to further reduce the price which leaves no bargaining power with him.

Unstandardized quality assessment

There is unstandardized approach when it comes to assessing the quality of the material which comes from abroad compared to India. When the material comes from abroad, it is dispatched with a third-party quality inspection and directly checked upon landing in India. On the other hand, if the material comes from India it is duly scrutinized photographed or video graphed by NPCIL official. The problem starts when there is no centralization and communication for such actions. These records assessed by one party does not remain in one office, leading to no control over these actions.

Summarizing the impact and limitations explained earlier

Several / repeated interruptions in the process of tendering or terms of the contract causes delay in project execution. Further, negative cash flows make it difficult to fund the project. During the actual execution of the project there are furthermore factors like price variation inputs, quality assessments which makes potential delay to the process.

Suggestions to improvise the tendering process:

Altering pre-bid suggestions

There should be thorough deliberation of pre-bid suggestions, except for the technical assessment and commercial terms that are answered by “tender conditions shall prevail”. Though the pre-bid suggestions are approved by the GCC and the board, it becomes very difficult to approach the board for specific changes in the clause. A better way to do things is to meticulously solve things case to case basis.

Thorough technical evaluation

The suppliers who are bidding for the project should be thoroughly assessed and evaluated. If the tender is not correctly evaluated or if there is any technical fault in the tender it gives the problem, a bottleneck or a big hurdle is faced during the project execution, which might even risk to halting the project. For a smooth completion and execution of the project, it is very important to do in-depth technical evaluation at the tendering stage.

Motivating suppliers on the go

In India, it is not very well accepted about giving bonuses for a particular project. However, bonus can be a big motivator for the expediting the process and the project work. The entire industry is very certain that extra money or putting a bonus clause will aid the project completion ahead of time.

Right price assessment

Many times, in order to get the tender, businesses quote irrational price. The quoted price becomes irrational and inadequate to match the project requirements, reparations for the same are faced during the project execution stages. Though the local businesses might get the project because of irrational pricing, however the consequence of such a price will make the project stranded. This wastes critical time and leads to starting from scratch i.e. going back to the tendering process or getting a new buyer.


Create Platform for periodic Interaction with Suppliers

For the betterment of the industry, buyers and sellers should come on one common platform where all the issues can be discussed. A common interactive platform will resolve major issues and avoid lags which happen during the project execution. Such platform will also help in solving pricing issues which causes project hurdles. Discussion on irrational price in the forum will help solve such issues.

Drive Industry wide “Nuclear Culture”

Every industry has discrete requirements from the other. Eg: Oil and Gas, Hydrocarbon power has completely different requirement compared to that of Nuclear. Specifically, in Nuclear lot of focus should and attention should be given on quality, since it is the major part of it. These special requirements should be considered by the buyers and right initiatives should be put in place to drive it and bring the industry players to one platform and explain the new culture and maximize the benefit of it.

To gain first-hand insights on the Indian nuclear market, India Nuclear Business Platform 2020 would provide the perfect platform to do so.

For a detailed report on the Indian nuclear energy sector:

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By |2020-02-20T12:21:25+08:00February 20th, 2020|industry-insights|0 Comments