SEMINAR : NATIONAL
E-PROCUREMENT STRATEGY : CHALLENGES IN IMPLEMENTATION
Directorate General of Supplies & Disposals has operationalised e-Procurement modules concerning Purchase, Inspection, Payment as also Receipt & Despatch of goods and debit adjustment with Indentors. The system was developed in-house with NIC providing e-support in developing software modules except for e-tendering. Because of sensitive nature and security consideration, e-tendering was out-sourced and, after testing for over 8 months, it has been made compulsory from April, 2006.
DGS&D organized a Seminar on “National e-procurement strategy: Challenges in Implementation” on 28th and 29th November, 2006 at Hotel The Ashok, Chanakyapuri, New Delhi. This was co-sponsored by the World Bank.
The Hon’ble Minister of State for Commerce, Shri Jairam Ramesh, had addressed the seminar on 29th November, 2006 at 9:30 AM..
Central Vigilance Commissioner had given a key note address at 10.30 AM on the second day of Seminar on 29th November, 2006.
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DATE :
28TH NOVEMBER, 2006 Schedule |
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Time/Subject |
Speaker |
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08.30 – 09.15 |
Registration |
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09.15 – 10.30 |
Inaugural
Session |
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Shri S.N. Jha Director General Directorate General of Supplies
& Disposals [SPEECH] |
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Mr Joel Turkewitz Procurement Hub
Coordinator, World Bank [SPEECH] |
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Smt Asha Swarup, AS &
FA Ministry of Commerce &
Industry [SPEECH] |
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Shri Kanwal Nath Dy. C & AG [SPEECH] |
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Vote of Thanks : Shri A.K.
Saxena, Addl DG, DGS&D |
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10.30 – 11.15 |
Tea Break |
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11.15 – 13.00 |
Technical
Session 1 : e-GP Implementation Strategy - Policy |
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Chair :
Shri A.K. Saxena, Addl. DG, DGS&D |
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Implementing the e-GP
vision |
Shri
S.C. Pandey (Presentation) Officer
on Special Duty Department of Expenditure |
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Realization of e-GP vision
– Role of e-Bharat |
Shri
S. Abbasi, IAS (Presentation) Director Department of Information
Technology |
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Presentation of the base
paper |
Mr
Paul Schapper (Presentation)
Consultant, World Bank |
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13.00 – 14.00 |
Lunch Break |
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14.00 – 15.30 |
Technical
Session 2 : e-GP Implementation Strategy – Platform |
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Chair :
Prof. Sushil, IIT Delhi |
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Experience of Indian
states on e-GP platforms |
Shri
N. Ram
(Presentation) Sr
Manager National Institute of
Smart Governance |
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e-GP platforms –
functionalities & innovations (1) |
Shri
T.A. Khan
(Presentation) Dy
Director General (NIC) Dept of Commerce, New
Delhi |
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e-GP platforms –
functionalities & innovations (2) |
Shri
M. C. Chakrabortty, (Presentation) Director
(Vigilance) DGS&D |
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e-GP platforms –
functionalities & innovations (3) |
Shri
Vivek Agarwal, CEO (Presentation) C1
India Pvt Ltd New Delhi |
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Standards &
Architecture for a e-GP platform |
Shri
Ashwani Chandok (Presentation) Head,
Enterprise Architecture Group Oracle India Pvt Ltd |
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15.30 – 15.45 |
Tea Break |
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15.45 – 17.15 |
Technical
Session 3 : e-GP Implementation Strategy – Process |
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Chair : Mr Paul Schapper Consultant, World Bank |
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BPR for e-GP &
international experience |
Prof
Sushil Dept
of Management Studies Indian Institute of
Technology, Delhi |
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Security requirements
& Digital signatures |
Ms
Binal Shah (Presentation) Consultant Sify Communications Pvt
Ltd |
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Meeting security &
audit requirements |
Shri
Neel Ratan
(Presentation) Executive
Director PriceWaterHouseCoopers |
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DATE :
29TH NOVEMBER, 2006 Schedule |
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09:30 – 10:15 |
Session: Keynote
address by Hon’ble Minister of State (Commerce) |
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Welcome address |
Shri S.N. Jha Director General Directorate General of
Supplies & Disposals [SPEECH] |
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Keynote Address |
Shri Jairam Ramesh Hon’ble Minister of State (Commerce) [SPEECH] |
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Vote of Thanks |
Shri A.K. Saxena, Addl DG,
DGS&D |
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10:15 – 10:30 |
Tea Break |
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10.30 – 11.15 |
Session :
Keynote address by Central Vigilance Commissioner |
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Welcome address |
Shri S.N. Jha Director General Directorate General of
Supplies & Disposals |
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Keynote Address |
Shri Pratyush Sinha Central Vigilance Commissioner [SPEECH] |
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Vote of Thanks |
Shri J.K.Khanna, Addl DG,
DGS&D |
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11.15 – 11.30 |
Tea Break |
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11.30 – 13.00 |
Technical
Session 4 : e-GP Implementation Strategy – Challenges (1) |
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Chair :
Shri B.J.Srinath, Director, ERNET & Cert-in |
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Challenges faced by Indian
Railways (Case study) |
Shri
A.K. Goel
(Presentation) Executive
Director(Stores) Railway
Board |
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Challenges of a first
mover & key learnings |
Shri
K. Bikshapathi
(Presentation) Project
Manager (e-Proc) Govt of Andhra Pradesh |
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E-payments in DGS&D
contracts |
Shri
M. Pran Konchady (Presentation) CCA (Supplies), New Delhi |
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13.00 – 14.00 |
Lunch |
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14.00 – 15.15 |
Technical
Session 5 : Organisational Expectations from e-GP |
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Chair :
Shri Mahabaleshwar Hegde, VP, NISG |
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What we are looking for in
e-GP |
Shri
Rakesh Kumar (Presentation) DDG(MM) Ordnance Factory Board |
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Expectations from e-GP |
Cdr
A.K. Sharma
(Presentation) Chief
System Administrator, ILMS Indian Navy |
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e-GP requirements for
Commonwealth Games |
Dr.
G. Narendra Kumar, IAS (Presentation) Secretary
(IT) Govt of NCT Delhi |
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15.15 – 15.30 |
Tea Break |
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15.30 – 16.15 |
Technical
Session 6 : e-GP Implementation Strategy – Challenges (2) |
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Chair : Shri Ashish Bhateja of World Bank |
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Challenges in e-GP
implementation (Case study) |
Shri
R. K. Dikshit
(Presentation) Addl
General Manager, BHEL |
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Changeover to a full
e-payment scenario – experience sharing |
Shri
R.K. Sharma
(Presentation) Director
(Finance) Gas
Authority of India Ltd |
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16.15 – 16.30 |
Tea Break |
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16.30 – 17:00 |
Concluding Session : Chair : Shri A.K. Saxena Participants: All session chairs, World Bank &
invitees |
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17:00 |
Vote of Thanks: Shri Ravi Gupta, DDG, DGS&D |
National Seminar on e-Government Procurement Strategy: Challenges in
Implementation
(28th & 29th November, 2006)
Summary of the 1st day’s
proceedings
The Seminar on National E-procurement Strategies: Challenges in Implementation was inaugurated by Shri Kanwal Nath, Dy C & AG.
The first day of the seminar was structured to discuss issues concerning e-GP policy, platform and processes in 3 different technical sessions. The inaugural session gave an over-view of e-GP scenario and the possibilities and strategies implementation of e-GP implementation.
The seminar on National E-Procurement Challenges in Implementation was inaugurated by Sh. Kanwal Nath, Dy. CAG and the keynote addresses were made by DG (S&D), AS &FA, Min. of Commerce & Mr. Joel Turkewitz, Procurement Hub, Coordinator, World Bank.
Inaugural Session
In his welcome address, Shri S.N. Jha, DG(S&D) pointed out the role of DGS&D in procurement activities in the country. He also stressed on the efforts of the successful e-procurement of DGS&D and also the role of NeGP in the improvement of management of the country. He also mentioned the support of the Ministry and the encouragement of the Hon’ble MoS in the successful implementation of the e-procurement systems in the country. He also mentioned that DGS&D is confident enough to share its experiences with other organizations and Ministries in the Govt sector.
Mr Joel Turkewitz, Procurement Hub Coordinator, World Bank emphasized on the improving the procurement system which is vital to have a wise and effective spending. He also emphasized that using of IT tools for procurement not only has cost advantage but also system advantage. The necessity for using short steps for long term strategy and advantages was pointed out.
Smt Asha Swarup, AS & FA cautioned the organization not to rest on its laurels and ensure that the entire range of developed software is used across its stakeholder base. She laid special emphasis on the fact that BPR should be effectively implemented to realize the full benefits of the e-procurement and there is a necessity for DGS&D to add more value to its solutions. The movement from mistrust to trust of the industry & permit self certification of data was stressed. She also laid stress that education of indentors & utilization of modules through seminars/training and less utilized areas such as e-payment be attended to on priority.
Shri Kanwal Nath in his inaugural address brought out the issues of blending of different platforms and processes and issue of change management. He pointed out the risks associated in security, confidentiality and integrity of data. He cautioned about the pitfalls – the necessity to have cost benefit analysis before changeover to e-procurement. The experiences from other organizations, states and countries were mentioned briefly. Lastly, the audit requirements of a e-GP systems was discussed including the point that the office of CAG was actively evolving a system in this regard.
Technical Sessions: Policy,
Platform & Processes
In the first technical session Sh. A Abbasi of D.I.T explained the objective of National e-Governance Plan, and the 26 Mission Mode Projects and other procurements which are included in the Ne-GP and the process of dialogue which is on with World Bank for their support. The e-GP is one of the MMPs which have been identified for possible support. He also informed that DGS&D has been identified as nodal authority to implement MMP on e-GP.
Sh. S.C. Pandey, OSD from Deptt. Of Expenditure gave a view of the Govt. on the road map which has been laid for the implementation on Ne-GP in general and e-GP in particular. He pointed out that Govt. has issued an advisory to various Govt. Deptts to make e-procurement compulsory w.e.f. 1.1.07 for all procurement above a threshold limit and that the Deptt have been given freedom to fix their own threshold level for this process. He underscored the fact that this may be rather a difficult objective to achieve and as such the govt.’s thinking is to make procurement of items available on DGS&D rate contract to be made through e-procurement portal of DGS&D.
Mr. Paul Schapper, Consultant, World Bank brought out the potential of technology in reduction of cost of transaction. He presented various models for e-GP including e-bid processing and mix of centralization and de-centralisation. He suggested that either a single model or set of models have to be adopted for the platform. A template and common set of guidelines should be formulated. He mentioned that security for e-tendering and the e-platform is to be ensured but no system is 100% safe and the risk has to be accepted.
The participants of the Second and Third session brought out the following issues:
E-procurement is a collaborative effort amongst various stakeholders such as Central Purchase organization, various govt. departments, suppliers and paying authorities.
The major benefits that are envisaged in e-GP include into efficiency and transparency which results in savings of costs and time and make process more open and transparent to all the stakeholders.
The scope of e-GP may involve various processes such as vendors registration and rating, e-tendering, negotiations, awarding contracts and monitoring of delivery.
The success of e-GP lies in end to end integration and not in a peace meal approach. The processes that are in primitive phase of development, e-payment and contract management.
In order to integrate payment systems with e-GP high level of security is to be provided at various layers in the logins, data base and networks.
e-GP is not only to facilitate governmental procurement process, but also to act as a Management Information system of the types of procurement, vendor performance, amount of various goods and services procured and so on.
The success of e-GP implementation hinges on a BPR exercise carried out to make suitable process changes before large scale implementation. In the context of DGS&D the process have been established and may not require major transformation in the key sub-processes and therefore, quite useful in the collaborative effort with other organizations.
The technical design of the process is to be supported by social design by effective change management exercise involving various stake holders. However, an effective strategy would be to manage continuity and change simultaneously.
The international experience in this regard in the context are of FSS of US, GPS of UK, European Union, provide bench marks for a BPR exercise.
National Seminar
on e-Government Procurement Strategy
and Challenges in
Implementation.
(28th
& 29th November, 2006)
Summary
of the 2nd day’s proceedings
1. In the first session while delivering key note address, Hon’ble Minister of State Shri Jairam Ramesh congratulated DGS&D on the launch of e-Procurement platform and the efforts made by it for making it successful. He, however, stressed that it is not really the ‘e’ part of the e-Procurement which is very important, it is actually the simplification and review of the procedures, which should be paid enough attention to in order to ensure that the real benefits of e-procurement in terms of user friendliness, transparency and efficiency reach the stake holders. He exhorted DGS&D and other organizations, who are trying to migrate to e-Procurement platform to re-do their processes of workflow and information flow quickly to align with the electronic working, so that the advantages of e-Procurement can be optimized. He also advised that they should make investment in training and development of human resources to derive the maximum advantage from the technology solutions.
The Hon’ble Minister emphasized that the areas such electronic ordering by the indentors and electronic payment which have not come into full steam as yet are fully implemented so as to make the platform an end to end solution in real sense.
The Hon’ble Minister mentioned that even though the official figures of procurement on DGS&D Rate Contract amount to a figure of Rs.4,000 crores only the Rate Contract play a very important role in market place, since the unofficial purchases by the State Governments and Public Sector Undertakings account for more than three times the official figures of procurement and that the success of this experiment is therefore very lighter for the success of e-Government Procurement in India.
The Hon’ble Minister also suggested that the other government departments who are willing to utilize the application of e-Procurement platform developed by DGS&D should pay for the same.
2. During the 2nd Session Shri Pratyush Sinha, Central Vigilance Commissioner delivered key note address. He highlighted the role of e-Procurement in making the procurement system more transparent. He pointed out that after the directions to the banking industry to migrate to electronic banking a few years ago the banking industry has made rapid progress. Taking cue from the same the Vigilance Commission directed sometime ago that all tenders henceforth should be published on the departmental website to make the information easily accessible to a wider cross-section of suppliers and to make the procurement transparent. He, however, also noted that electronic working should be accompanied with process improvements simultaneously for the real advantages to flow out of the new initiative.
He pointed out the advantages of a common government procurement portal whereby all the prospective suppliers can access the information from a single source and can give competitive offers for their products. He also pointed out how the process of e-Payment has been able to make a marked difference in making the procurement system corruption free.
3. The first technical session of the day was chaired by Shri
B.J. Srinath, Director ERNET. The
speakers included Shri A.K. Goel, Executive Director (Stores), Railway Board,
Shri K. Bikshapathi, Project Manager (e-Proc) Government of Andhra Pradesh and
Shri M. Pran Konchady, CCA (Supplies).
Shri Goel gave an overview of the work done by Railways on the e-Procurement front. He informed that the project was launched in the Norther Railways in the year 2004 and was completed successfully during the year 2005. He pointed out that as a part of the major reform initiative by the Indian Railways they have decided to roll over the e-Procurement through out the 25 Zonal Railways and production units covering purchases of Rs. 15,000 crores worth of goods and 12,000 crores worth of works. The Railway plans to put in place a single portal covering the e-Procurement application which can be accessed for their respective procurement activities by different Railway units including Zonal Railways.
He pointed out that their system envisages total trust in the suppliers in that the information furnished by the vendors in their offers electronically forms the basis of their purchase decisions and documentary proof thereof is furnished by the vendors only subsequently. In case of any discrepancy in the information furnished by the vendors, there is a provision of administrative action against them. They have, however, not included the e-Payment in the scope of their e-Procurement so far. They have also not made any formal business process re-engineering exercise for their procurement system. Nevertheless, the shear size and volume of their procurement makes the railway platform a very interesting study.
The next presentation was from Shri K. Bikshapathi, Project Manager (e-Proc) Government of Andhra Pradesh. He pointed out the pioneering efforts made by the Government of Andhra Pradesh along with DGS&D in implementing e-Procurement platform for government purchases. The project was implemented by AP Government for works contract initially, since the procedures and systems were fairly standard and uniform to all the states. They then extended the reach of e-Procurement to the procurement of goods, which proved to be quite a challenge since the procedures were not uniform and there were a very large number variables in terms of the specifications and the mode of procurement. The scheme has now been extended to cover procurement of a wide range of products including drugs and medicines, surgical equipments, spares for road transport and items required for Public Health Engineering Department. They initially kept a threshold of Rs. 1 crore for electronic procurement which has been lowered to Rs. 5 lakhs now. He pointed out that AP has adopted a public private partnership model for e-Procurement and has C-1 India as their partner. The e-Procurement model of Government of AP is yet to be extended to cover e-Payment.
The presentation from Shri M. Pran Konchady, CCA (Supplies) gave a status of the implementation of e-Payment on the e-Procurement platform of DGS&D. He informed that presently a system of sending a composite single cheque for all payment to be made on a day, to the Bank for arranging payment to different suppliers through ECS the same day is being followed in DGS&D. The e-Procurement platform has a provision of submitting the bills electronically and a full implementation of e-payment directly to the suppliers through the e-payment portal of the associated bank is expected to be operational soon The processing of the bills presently is being done parallelly while simultaneously verifying the physical inspection notes also for the time being. DGS&D is also working on integrating the e-receipts with the system.
4. The next technical session was chaired by Shri Mahabaleswar
Hegde, VP, National Institute of Small Governance. The list of speakers included Shri Rakesh Kumar, DDG (MM),
Ordnance Factory Board, Cdr. A.K. Sharma, Chief System Administrator, ILMS
(Indian Navy) and Dr. G. Narendra Kumar, IAS, Secretary (IT), Govt. of NCT
Delhi.
Dr. G. Narendra Kumar in his presentation pointed out the requirement of huge purchases for the upcoming Common Wealth Games. He informed that they are up scaling their e-Procurement platform from the present level as available in the MCD and in Delhi Government to a full solution in association with DGS&D for the purpose. They are also resorting to public private partnership model to ensure that only proven technology solutions are put in place to achieve the desired objectives of efficiency and transparency in a time bound manner and have engaged Wipro as their partner. Their model envisages a payment to their partner on monthly basis depending upon the number of tenders being floated during the month. Their platform includes e-Payment features.
Shri Rakesh Kumar, DDG (MM) OFB in his presentation gave the details of the range, volume and the peculiarities of the procurement by 39 units of Ordnance Factories. He mentioned that as production units their primary concern is the optimum inventory level and that in many cases the projections for the stores to be produced are known to them at a very short notice. It is therefore very important for them to resort to the e-Procurement to reduce their procurement cycle time. He further pointed out that over 60% of the procurement by the Ordnance Factories is made on the basis of drawings and number of vendors in their cases is not so huge, since the emphasis is on a regular and continuous relationship to ensure reliability of components and sub-assemblies during the process of manufacturing the armaments and equipments. E-Procurement could therefore prove to be very helpful in handling the procurement in their case. Ordnance Factory Board has approached DGS&D for support on e-Procurement platform. He, however, pointed out that many of these factories are located in far flung places where the reach of infrastructure may not be as good as in Metropolitan Cities and that as such the solution has to be found keeping in view this challenge.
Cdr. A.K. Sharma, Chief System Administrator, ILMS (Indian Navy) explained the features of their ambitious projects of ILMS which will incorporate the entire gamut of material management starting from the receipt of demands, forecast, planning, budgeting, optimum inventory levels, procurement, payment etc for over 7 lakh items of spares required by Indian Navy Ships and other establishments. At present all these activities are done manually and are part of a very cumbersome process. He, however, pointed out that this project will largely depend on the role of finance and audit since these agencies are still very insistent on physical documentation and proofs.
5. The last technical session of the day was chaired by Shri
Ashish Bhateja of World Bank. The list
of speakers included Shri R.K. Dixit, Addl. General Manager, BHEL and Shri R.K.
Sharma, GM (Finance), Gas Authority of India Ltd.
Shri R.K. Dixit in his presentation gave the details of e-Procurement efforts being made by BHEL in its various units and the particular emphasis being laid by BHEL on e-Procurement during their 50th year of existence in India. Their e-Procurement platform is visualized more on the material management role to maintain the optimum inventory levels and does not include e-payment at the stage. They have also successfully experimented e-reverse auction through their partner C-1 India and were able to affect savings to the tune of 15% on 8 cases of reverse auction successfully conducted involving procurement of CNC machines to the tune of Rs. 60 crores. There was great deal of excitement among the participants on this presentation due to the novelty of this exercise, which is quite an in-thing in western countries.
Shri R.K. Sharma in his presentation explained the thrust they have given to e-payment in their organization GAIL and informed that they have totally done away with the system of issuing cheques for all payments to their suppliers and employees from 50 locations spread across the country. The process includes feature of bill-watch and e-receivables. The limitation of this experiment was, however, that the bills have to be presented manually at their office.
6. The concluding session was chaired by Shri A.K. Saxena, ADG (S) along with Dr. Paul Schapper and Shri Ashish Bhateja both of World Bank. Summing up, Dr. Schapper mentioned that the Seminar was probably the most informative and actively participated Seminar attended by him during the last five years and the reason for the success was that there is keen interest on the subject among the government departments in India, who were represented in the Seminar at senior levels. The sizable attendance through out the technical sessions on both days was also indicative of the quality and content of presentation. Shri Ashish Bhateja also noted that the Seminar was much richer compared to similar Seminars held earlier and that it was made richer by the active participation on the audience in the question-answer sessions. Shri Saxena in his concluding remarks noted that the real success of the e-GP in the country lies in the collaborative efforts of various government agencies in complementing each other to make the procurement more efficient in meeting the national objective of taking the government services to the doors of common man.