Energy PSUs seek savings via jointprocurement of goods and services

A total of 30 Central public sector enterprises under the ministries of Power, Coal, New & Renewable Energy and Petroleum & Natural Gas, expect to save between ₹25-27 crore on their air travel bills in 2016-17, through joint negotiations with domestic airlines.

The move is a part of the Energy PSU Task Force, set up at the insistence of Piyush Goyal, Minister of State (Independent Charge) for Power, Coal and New & Renewable Energy. The task force’s aim was to showcase Central public sector enterprises as a bigger buyer of goods and services to negotiate better with vendors.

“Initially, it was the public sector units under the Ministries of Power, Coal and New & Renewable Energy who were negotiating with the airlines. But, once enterprises under the Ministries of Petroleum and Natural Gas joined in November 2015, the total bill of air travel became ₹270 crore. With this, we negotiated with all airlines, memorandum of understanding was signed with six private airlines and an agreement was inked with Air India. This will help us save anywhere between 8 per cent and 10 per cent on the total air travel spend,” said Rakesh Kumar, Director (Finance) of NLC India Ltd.

The six private airlines who have signed MoUs with the Central public sector enterprises are Jet Airways, IndiGo, SpiceJet, Vistara and Go Air.

Apart from the Central public sector enterprises, autonomous bodies, subsidiaries and administrative ministries mean 143 institutions are jointly acquiring such goods and services. As per the Department of Public Enterprises’ guidelines, Central public sector enterprises are required to buy the cheapest ticket at the time of purchase.

Under these agreements and MoUs signed with the airlines, the public sector enterprises can book the cheapest tickets available at the time of purchase and there are no charges for cancellation and re-booking. In return, airlines get a steady stream of business.

Kumar said that the Energy PSU Task Force is now going to implement similar moves for acquiring medical services, IT services and insurance.

“I am sure the members of the task force will agree to acquire such services jointly as the scope for savings is even higher over here. Sub-groups in the task force are in the process of taking up these areas for taking a similar approach,” he added.