LUCKNOW DIVISIONAL OFFICE BACKGROUND : • Thermal Power Station (TPS) Panki Kanpur is a 220MW thermal power station at Panki, Kanpur • The monthly LDO requirement of the customer is 300KL • The customer floated tender for 3500KL of LDO in Sept’11, for meeting its LDO requirement for the next 12 months, on delivered basis. • The last tender for 3000KL of LDO in 2010 was won by IOC, wherein a discount of Rs 4100/KL was offered by IOC. HPC was L2 in this tender with its landed cost higher by around 300/KL. • During the last tender, the transportation rate quoted by HPC was lower by Rs 700/KL, as compared to IOC delivered transportation rate. • HO restricted maximum outgo on LDO to Rs 1000/KL wef 01.05.2011
LUCKNOW DIVISIONAL OFFICE BACKGROUND : • Based on the transportation rate quoted by HPC in the last tender, mandate for offer of a discount of Rs 1800/KL on LDO was obtained by us • We quoted in the tender with LDO supplies on inter-state basis @2% CST & Rs 1800/KL discount on LDO. HPC also supplies LDO on inter-state basis from Shakurbasti. • During the same time, a tender for LDO supply by rake was floated by NTPC Tanda, under Allahabad Divisional Office. • The bids for NTPC Tanda were opened one week before the due date for opening of the bids for TPS Panki, Kanpur • We were in touch with Allahabad DO & they informed that apart from a discount of Rs 1000/KL, HPC has absorbed Rs 1000/KL in the rake transportation & hence IOC lost the NTPC tender.
LUCKNOW DIVISIONAL OFFICE PROBLEM : • We now expected to lose the TPS Panki tender, as HPC was expected to absorb Rs 1000/KL in the transportation rate in this tender also. • We had already submitted the tender & it was due to open in the next week. • We started searching for options to WIN the tender.
LUCKNOW DIVISIONAL OFFICE ACTION TAKEN : • Entry Tax @ 5% is charged on LDO, for supplies on inter-state basis • The tender floated by TPS Panki was silent on the Entry tax element & we decided to use the same to IOC benefit. • We met the TPS management & persuaded them to clarify whether the Entry tax portion is part of the landed cost calculations. We requested them to seek clarification on the Entry tax element from the bidders. • Our logic & excellent relations with the customer clicked. • Accordingly, TPS Panki issued a letter to the bidders, seeking to clarify, whether the Entry Tax would be borne by the buyer or supplier. They simultaneously extended the Bid opening date by further one week. • On receipt of this letter, we sought mandate for additional discount of Rs 1000/KL, for partly absorbing the Entry tax & submitted our position on the Entry tax, accordingly.
LUCKNOW DIVISIONAL OFFICE OUTCOME : • When the bids were opened, it was found that HPC was L1, based on quoted LDO rate by Rs 700/KL • However, when the status on Entry tax was included in the Landed cost calculation, IOC stood L1. • TPS Panki placed Supply Order on IOC for supply of 3500KL on LDO on delivered basis.
LUCKNOW DIVISIONAL OFFICE LEARNINGS : • Market Intelligence is very important in winning business. • The motivation should be “ Playing to WIN “ . There may be a possible WIN, even in seemingly LOST situation. • Maintaining excellent Customer relationship is very important. It provides the winning edge.
LUCKNOW DIVISIONAL OFFICE THANKS