As India transitions from the goal of "Power for All" to ensuring "Reliable and Quality Power for All," it becomes imperative to uniformly implement QCBS-based procurement in both central and state procurement processes for power sector assets
In today's fast-paced world, sustainability is more than just a buzzword; it's a core principle influencing how industries operate. It is also evident in the electrical industry, where Quality Cost-Based Systems (QCBS) are transforming procurement practices to align with efficiency imperatives. With the Indian Government advocating for QCBS methods, it's essential to grasp how this shift is molding the landscape of the electrical industry.
Traditionally, procurement in the electrical sector leaned towards the Least Cost System (L1 system), emphasising cost efficiency above all else. While suitable for routine tasks and non-consulting services, this approach proved inadequate for high-impact, complex projects requiring innovation, quality, and speed. Recognizing these limitations, the government introduced the QCBS method in October 2021, heralding a pivotal shift towards a more holistic procurement approach.
QCBS has emerged as a transformative strategy in the electrical and electronic manufacturing industry, balancing innovation with some sustainability aspects. By integrating quality management and carefully analysing costs, QCBS ensures rigorous quality standards while minimising resource consumption and waste. Robust quality control methods employed by manufacturers reduce defects and product failures, conserving resources and mitigating the environmental impact of electrical waste disposal.
According to a study by Oxford Economics and SAP, 62 percent of Indian companies believe that sustainability and profitability can coexist. The adoption of QCBS in the power industry is fueled by a commitment to enhancing operational efficiency and meeting regulatory standards. Smart grid technology and the integration of renewable energy sources play a crucial role, enabling power companies to enhance grid performance, reliability, and minimise losses.
Projects utilising QCBS, both in India and abroad, highlight its effectiveness in delivering high-impact initiatives. From formulating long-term visions for renewable energy to assessing solar power programs, QCBS is growing.
As India grapples with a rising energy demand, especially in the power sector, the significance of high-quality infrastructure cannot be overstated. Power sector projects, being capital-intensive with a lifespan of 30 to 40 years, make the adoption of QCBS a logical choice for sustainable development.
Successfully integrating QCBS to transform the power industry necessitates a comprehensive assessment of the current electrical sector, scrutinising infrastructure, technology, laws, and market dynamics to identify potential obstacles. Investing in advanced technology, such as smart grids and renewable energy sources, is crucial to enhance efficiency, reduce emissions, and improve overall performance. Emphasising quality over quantity ensures a consistent and dependable power supply, fostering customer satisfaction and trust. This approach not only minimizes maintenance costs but also enhances overall system reliability.
As India transitions from the goal of "Power for All" to ensuring "Reliable and Quality Power for All," it becomes imperative to uniformly implement QCBS-based procurement in both central and state procurement processes for power sector assets. This standardized approach aims to improve the longevity of assets and decrease overall life cycle costs.
In the power sector, the integration of Environmental, Social, and Governance (ESG) standards, along with a strong focus on safety, is crucial for corporate success. While India has made strides in improving construction safety, disparities among players persist, impacting project quality and cost. Addressing the gap in safety standards and labor policies is imperative to enhance the overall quality of project deliverables. To align with global practices, many developed markets opt for Quality Cost-Based Selection (QCBS) in procurement, emphasizing the need for qualitative aspects, specially ESG, leading to long-term sustainability.
The electrical industry's commitment to QCBS in the Indian power sector signifies a transformative journey towards sustainable practices. The amalgamation of quality, cost, and environmental responsibility underscores a holistic approach that not only enhances product efficiency but also paves the way for a greener tomorrow. As we navigate this roadmap, the intersection of collaboration, innovation, and investment becomes the catalyst for a more sustainable and eco-conscious future, leaving us with the profound question: How will our choices today shape the landscape for a sustainable future.
(Hamza Arsiwala is the President of IEEMA.)