MP, Chhattisgarh Initiate e-procurement

by Sonal Desai    Dec 15, 2006

In a major boost to the e-governance drive in the Hindi heartland of India, the states of Madhya Pradesh and Chhattisgarh are setting up e-procurement across all their departments.

Nextenders along with Wipro has bagged the order from both states.

Summet Bhatt, director, Nextenders says, “Our deal with Chhattisgarh will officially be signed on December 19. We bagged the MP project in September.”

Nextenders will be a part of the e-procurement process in MP for five years and three months, and in Chhattisgarh for five years and six months. Each project is estimated to cost around Rs. four crore. All the government departments will be covered in this project.

MP has already issued a cabinet order regarding this. In a circular dated September 7, 2006, Anurag Srivastava, IT secretary, MP states, “All departments will be covered in the e-procurement project. Digital signatures will be used for on-line forms and information will be encrypted. Electronic tendering will be carried out by the Madhya Pradesh Society for Promotion of IT.”

Bhatt informs, “We have an exclusive tie-up with Wipro for front and back-end implementation support to deploy Wipro’s version 2 Government E-Procurement System. Wipro’s expertise in change management will help. The government has no investments in the project. We will deduct a fee of Rs.575 per tender downloaded.”

The e-procurement system to be deployed will use a three-tier architecture on Microsoft technologies and for database MS SQL Server will be used. E-procurement process would run on four servers. In the next 30 to 40 days,MP will have its data centre in Bhopal, while the Chhattisgarh data-centre will be located in Mumbai till such time as the State builds its own data-centre in Raipur. The disaster recovery centre for Chhattisgarh will also be based in Mumbai and will be managed by NetMagic. Training in MP has already begun and the first batch comprises of the public works department employees of Bhopal. The company has selected VSNL and Airtel for providing bandwidth in MP.

In Chhattisgarh, the project will be rolled out in a year. Explains Bhatt, “We have to customize the existing infrastructure and may be add on some more. As of now, the government departments are involved in e-tendering process at an independent level. All these departments will be integrated into e-procurement.”

He claims that fairness and transparency, availability and accessibility and reduced tender process cycle time are the main benefits of e-procurement, besides cost benefits to the state governments and an ability to award more projects for public welfare.

This statement is echoed by Srivastava and Ajay Adala, joint CEO, Chhatisgrah Infotech and Biotech Promotion Society or CHIPS.

Notes Srivastava, “E-procurement will reduce the overall tendering time. Since ready-made templates are available, filling forms is also faster and easier reducing processing time. More bidders can participate, making the process more competitive. The main advantage is the visibility of the tender. Tender ads placed in newspapers can be missed, but they can be accessed 24×7 on the site. Arrangements could be made to alert the bidders either through SMS or an email. E-procurement eliminates manipulation and discourages cartel formation.”

Adala adds that e-procurement scales the e-tendering process by covering the entire system from proposal stage to the payment stage. Chhatisgrah has earmarked a budget of Rs.4,000 crore for e-procurement. Going on the bid value, the transaction volume is estimated to near Rs.5 - 6 crore each year initially. However, revenues for the state will flow in only from the fourth and fifth years, he added.

In MP, BHEL and Antares were the other bidders for the project, and C1India and Tenderciti were the other bidders in Chhatisgrah.