As a service agency, we designed this service model and help the distribution companies to file a petition before state regulatory commissions for approval. After approval, entire roll-out, including procurement, awareness generation, planning and distribution is managed by us. Our plan is to distribute about 150 million LED lamps by 2015 end.
We have linked distribution with the unique consumer authentication number of the electricity bill. Only four bulbs are distributed against each bill. This helps check the propensity for unauthentic reselling of distributed bulbs.
In streetlight programmes, we are dealing directly with municipal corporations. Otherwise, the model is the same.
Q. How do you ensure the quality of the distributed LED bulbs?
A. We have a very robust quality control system that operates at three stages. In pre-procurement phase, bulbs are tested at NABL-accredited laboratories.
Second, we do random quality checks during procurement.
The third is that, we have found a unique way of controlling quality. With all suppliers, we keep around 50 per cent of the contract value as a bank guarantee over the warranty period. For example, if the warranty period is eight years, it is kept for eight years. If it is a ` 1 billion order, you need a bank guarantee of ` 300 million to ` 400 million.
Because to the three-stage quality-assurance system, total number of failures was only 500 out of eight million distributed bulbs.
Q. How does EESL promote Make in India?
A. We follow the government’s guidelines for the same. Suppliers of LED bulbs under different EESL programmes need to have a manufacturing unit in India.
In addition to that, if the wafer of the bulb is manufactured in India, the supplier will have special procurement preference. Unfortunately, no company manufactures LED wafers in India, currently.
Even the bidding price is so controlled that it is hardly possible for traders, who just import and package the products here, to meet our requirements. Therefore most bids are won by domestic manufacturers because companies can reduce costs only when they have a domestic manufacturing facility.
Therefore only domestic manufacturers will be able to compete in this market. Moreover, in order to encourage small-scale local manufacturers, in particular, 20 per cent of our orders are reserved for them. This, in turn, encourages new brands and offers new opportunities for upcoming enterprises.
After following these guidelines, the number of manufacturers has doubled in the last three years.
Our programmes also help companies to enhance brand visibility among consumers through our distribution system. As we directly reach end consumers, the brand connect happens.