A ₹20,000-crore scam in procuring LED bulbs from China

The Congress on Monday accused the Narendra Modi government of using “dubious and highly questionable practices” for procurement and distribution of the ‘Ujala’ LED (light-emitting diode) bulbs.

“Prime Minister Narendra Modi, claims his government has distributed more than 21 crore LED bulbs but does not tell the people of India, that in this process itself, his government is making a joke of their much publicised claims of ‘Make in India’,” said Congress spokesperson Shaktisinh Gohil. He said that crores of these LED bulbs, LED street lights, LED pumps and LED fans are in fact made in China or Taiwan.

Gohil put forward some facts, in a press statement, regarding the allegation of irregularities and shady dealings on the issue:

• The Ministry of Power had set up Energy Efficiency Services Limited (EESL), a Joint Venture of NTPC Limited, PFC, REC and Powergrid to facilitate implementation of energy efficiency projects. It is registered under the Companies Act, 1956 on December 10, 2009 and the commencement of business certificate is obtained on February 11, 2010.
• The UPA Government established EESL to work as a consultancy organisation for energy efficiency and as a resource centre for capacity building of institutions. It is a consultancy organisation for municipalities, local governance bodies and other such organisations.
• When the BJP Government came to power, PM Modi had “in a well-staged” event on January 5, 2015 lit a bulb in South Block and claimed that crores of street lights and other LED items would be distributed at a low cost throughout the country. “But the reality of his government is that the rulebook was thrown into the dustbin,” said Gohil.
• There is no transparency in the tendering and procurement process in of these LED bulbs, street lights, pumps and fans etc. While the Vigilance Commission mandates that such a procurement should be publicised for RFQ on the basis of merit, and should be put on a government website, the EESL puts it on their own private platforms for a short period and then “hideously” manipulating the entire process of tendering.
• Although there are four Power Ministry PSUs involved in this entire process, the companies neither manufacture not procure any part – not even a ‘diode’ – of the LED bulb; instead they procure from Chinese and other foreign companies, in this process making a mockery of its own the ‘Make in India’ flagship programme.
• Media reports suggest that in November 2016, EESL gave an order of two crore such bulbs to a well-known foreign LED giant which manufactures in China, but which could deliver only 11% of that order, well past the due date of delivery.
• There is an LM80 certificate for evaluating LED bulbs and street lights, but the company did not even get that LM80 certificate, which is a mandatory criteria for LED items.
• “Hence we don’t know how much energy the LED bulb saves. For instance, in September 2016, street lights were installed in Navsari, Nagapalika of Gujarat, the bill for August 2016, prior to the installation of LED streetlights was ₹5,03,516, after installation, instead of the 50% "Deemed Saving” it went up to ₹5,97,865. Thereafter, in all successive months, the bill never went below ₹5,03,516
• The Vigilance Commission guidelines categorically state that a third party audit has to be done after the procurement of the LED street lights, and that ‘third party’ has to be identified by the municipality or the local body in question – but in BJP Government’s way of implementation- that ‘third party’ is being identified by EESL itself
• The PM claims that 21 crore such LED bulbs were distributed throughout the country and various news reports reflect that more than 30 lakh street lights were installed in the states of Gujarat, Rajasthan and Andhra Pradesh.
• Cost of one such LED street light is ₹2,000 approximately. If we take into account the irregularities and fraud in tendering process- This turns out to be a scam of at least ₹20,000 crore, he alleged.