A Study report on Procurement in PSUS

At CTPS,Damodar Valley corporation

Submitted in partial fulfillment of PGDM

PGDM Batch : 2011-13

Submitted To : Prof. P. Chakravarti

Submitted By : MukeshPrabhakar

Declaration Imukeshprabhakar hereby declare that the project titled

procurement in PSUs is an original work carried out under the guidance of s. Prasad the report submitted is bonafide work of my own efforts and has not been submitted to any institute or published before.

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Certificate from the organization

To whomsoever it may concern

This is to certify that MR. /Ms. .. Of PGDM has successfully completed summer training program for a period of .. Days/weeks with from .. To. As per our assessment he/ she is hard working and his /her performance has been satisfactory/ good/ excellent during the training program.

We wish him/ her all the success for his /her future.

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Faculty guide certificate

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certify

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That the work done and the training undertaken by him/her is genuine to the best of my Knowledge and acceptable.

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Acknowledgement

This project is a real outcome of my study. I have done a hard work on my project work and the research program on PROCUREMENT IN PSU, S for the fulfillment of PGDM from vishwavishwani school of business.

I acknowledge my gratefulness to MR. S. PRASAD under whose expert guidance and immense co-operation. It could be possible to study and submit a project report.

I also thankful to Dr.Pchakravarti for providing us valuable information that helps me during my project work.

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INDEX
Chapter. No. Chapter 1 Introduction Chapter 2 Company Profile (a) Evolution of dvc (b) Mission (c) Vision (d) Objectives (e) Organization structure (f) Chandrapura thermal power station (g) Infrastructure (h) dvc- power plants, dams and barrages (i) Transmission (j) DVC performance (k) Finance (l) Growth plans (m) Human resource development Chapter 3 literature review Procurement in PSU,s Chapter 4. Research methodology Chapter 5 data analysis 34-46 47- 50 52-53 13 14 14 15 16 17 18 19-21 22 23 24-27 28-31 32 Content page no 10-11

Chapter 6. Findings Recommendations Conclusions

55 55 56

Bibliography Books / Articles referred Websites referred

Joining report

Date : .

, batch 2011-2013, a student of VishwaVishawani institute of system & management, boston house, Hyderabad-78 has been given the permission to do his/ her summer training programme at our organization for the period of to . Under the guidance of .

Name of the company. Address.. Date of joining .. Tel.no. . Area assigned (marketing/finance/hr). Topic of the project

Name of the corporate guide Signature

Purpose of the study

Organization study is very important part of the management program. It gives the exposure to the hidden skills of the students.it also adds practical experience of the real world of the business. Summer project provides the information about how organization works in scare resources and achieve its determined goals and objectives. It has helped me to understand organizational procurement in psu,s of the department. Apart from the theoretical knowledge, practical experience of summer project played a major role in building the real corporate personality. It was the great experience for me to be a part of DAMODAR VALLEY CORPORATION during the summer project.

Objective of the study

To learn the organizational procurement system. To learn the organizational work in the field of power generation. To study about the whole methods in the field of procurement To study about the working of procurement in PSUs.

Chapter 1

Introduction

Damodar valley corporation: - A brief history

The damodar valley corporation, popularly known as DVC, is the first multipurpose river valley project of independent India. The corporation came into being on July 7, 1948 by an act of the constituent assembly of India (act no. xiv of 1948).it is modeled on the Tennessee valley authority of the USA. Jawaharlal Nehru, prime minister of west Bengal and shri Krishna sinha, chief minister of Bihar, took personal interest to ensure early success of the project. The initial focus of the DVC were flood control, irrigation, generation, transmission and distribution of electricity, eco-conservation and afforestation, as well as job creation for the socio- economic wellbeing of the people residing in and around areas affected by DVC projects. However, over the past few decades, power generation has gained priority. Other objectives if the DVC, however, remain part of its primary responsibilities. The dams in valley have a capacity to moderate peak flood of 650,000 to 250,000 ft3/s. DVC has created irrigation potential of 3640 sq.kms. The first dam was built across the Barakar River, a tributary of the Damodar River at tilaiya 1953.the second one,konardam, was built across the Konar River, another tributary of the Damodar River at konar in 1955. Two dams across the rivers barakar and damodar were built at maithon in 1957 and panchat in 1959. Both the dams are some 8 km upstream of the confluence point of the rivers. These four major dams are controlled by DVC. Durgapur barrage was constructed downstream of the four dams in 1955, across the damodar river at Durgapur in 1955, with head regulators for canals on either side for feeding an extensive system of canals and distributaries. In 1978, the government of Bihar (that was before the formation of the state of Jharkhand) constructed the tenughat dam across the Damodar River outside the control of DVC. DVC proposes to construct a dam across the Barakar River at belpahari in Jharkhand state. There are hydro-electric power stations at tilayia, maithon and panchat, with total installed capacity of 144 MW. The one at maithon was Indias first underground hydro-electric power station. DVC operates thermal power stations at bokaro, chandrapura, Durgapur and Mejia, with the total derated capacity of 2745 MW. The power station at bokaro was biggest in the country when it was built in the fifties. DVC is expanding its thermal power capacity with the completion of its present plans by 2012 it would be generating
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more than 11000 MW of power. The forthcoming projects are ragunathpur TPS(4*600MW), andal TPS(2*500MW), koderma TPS(2*500MW), maithon RB TPS(2*525MW) and bokaro a TPS(1*600MW) and bokaro steel city TPS(3*250MW). The total valley area covered by DVC activities is approximately 24,235sq. Kms. The upper valley consists of the districts of hazaribhag, koderma, giridih, chatra, dhanbad and bokaro, and some sections of palamu, Ranchi, lohardaga and dumka districts in the state of Jharkhand. The lower valley consists of the two districts of Bardhhaman Hugli, and some areas of the Howrah, bankura, and purulia districts in the state of west Bengal. DVC will produce 11000 MW of power by 2012. Chairman and two part-time members, generally the secretary of the power dept., of the states of west Bengal the corporation has its head office at Kolkata, has a full time and Jharkhand representing their respective states. DVC made unprecedented progress during 2000-2005 when its profit rose from around 100 crores to 1000 crores. major initiatives taken during these periods included NTPC driven root cause analysis and improvement plan, implementation of preventive maintenance of robust information technology infrastructure plan under guidance of high profile IITian MR. agarwal, programme for realization of dues from BSEB, tying up for JV with Tata ,harsh punishment to tainted and irresponsible employees and officers. In-organic and un structured expansion plan after 2006 is putting the organization under pressure to cut its profit margins drastically to comply with statutory tariff norms.

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Chapter 2

12

Company profile
a) Evolution: - formation

DVC, a legacy to the people of India, emerged as a culmination of attempts made over a whole century to control the wild and erratic Damodar River. The river spans over an area of 25,000 sq. kms covering the states of Bihar (now Jharkhand) & West Bengal.

The Damodar Valley has been ravaged frequently by floods of varying intensities and the first of the major recorded flood dates back to 1730. Thereafter serious floods occurred at regular intervals, but it was the flood of 1943 that left the worst devastation in its wake. As a result, the Governor of Bengal appointed a Board of Inquiry headed by the Maharaja of Burdwan and the noted physicist Dr. MeghnadSaha as member. In their report, the Board suggested creation of an authority similar to the Tennessee Valley Authority (TVA) of United States of America. The Government of India then appointed Mr. W.L. Voorduin, a senior engineer of the TVA to make recommendations for comprehensive development of the valley. Accordingly, in August, 1944, Mr. Voorduin submitted his "Preliminary Memorandum on the Unified Development of the Damodar River"..

Mr. Voorduins "Preliminary Memorandum" suggested a multipurpose development plan designed for achieving flood control, irrigation, power generation and navigation in the Damodar Valley. Four consultants appointed by the Government of India examined it. They also approved the main technical features of Voorduins scheme and recommended early initiation of construction beginning with Tilaiya to be followed by Maithon................................................................................

By April 1947, full agreement was practically reached between the three Governments of Central, Bengal and Bihar on the implementation of the scheme and in March 1948, the Damodar Valley Corporation Act (Act No. XIV of 1948) was passed by the Central Legislature, requiring the three governments the Central Government and the State Governments of West Bengal and Bihar (now Jharkhand) to participate jointly for the purpose of building the Damodar Valley Corporation. The Corporation came into existence on 7th July, 1948 as the first multipurpose river valley project of independent India.

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b) Mission: -

The assigned mission of the Damodar Valley Corporation under Section 12 of the DVC Act, 1948:
o o o o o o o

Flood control Promotion and operation of schemes for irrigation. Water supply for industrial and domestic use. Navigation and drainage Generation, transmission and distribution of electrical energy. Promotion of afforestation and control of soil erosion in valley area. Promotion of public health, agriculture, industrial, economic and general wellbeing in Damodar valley.

c)Vision:

To foster integrated development of Damodar Valley Command Area and achieve par excellence in its multifaceted activities of control of floods, provision of irrigation, generation, transmission and distribution of electrical energy and also soil conservation, unified tourism, fisheries, socio-economic & health development of villages within a radius of 10 KM of its projects.

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d) Objectives: To realize DVCs Mission, the following corporate objectives have been identified for persuasion: Corporate Objectives:

Generate maximum on sustainable basis through implementation of best O&M practices. Rejuvenate old generating units through refurbishment / replacement / comprehensive overhauling programme. Capacity augmentation through extension and green field projects. Strengthening of the existing transmission and distribution network and augmentation to match with the capacity addition. Transmit, distribute and supply reliable and quality power at competitive tariff. Improve the financial health of the Corporation by adoption of efficient industrial, commercial and human resource management practices. Ensure optimum utilization of available water resources through effective and efficient management and harnessing the remaining potential of Damodar basin. Adopt measures for pollution abatement of Damodar River. Ensure environmental protection at plant level. Strengthen activities of eco-conservation in the valley area & to make Damodar valley more Green. Unified socio-economic development for the inhabitants of villages neighboring major projects of DVC. To pursue with development of tourism at Maithon, Panchet, Tilaiya and Hazaribagh. Revival of Fish Farming in DVC reservoirs.

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Table 2.1

E.) organization structure

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F) CTPS: - CHANDRAPURA THERMAL POWER STATION

Chandrapura Thermal Power Station is located at Bokaro district in the State of Jharkhand. It has an installed capacity of 390 MW. CTPS had the pride of being largest pulverized fuel fire power station of Asia and unit number one was the first reheat unit installed in India with highest steam parameters. Electrical switchyard of CTPS is a pride of DVC, being Indias biggest network. Details of CTPS Generating Units Gen. Name of Original Unit Manufacturers capacity (MW) Boiler TG Present capacity (MW) Year of Special commissioning features

1 2 3

CE CE CE

GE GE GE

140 140 140

130 130 130

Oct., 1964 May, 1965 July, 1968

Three stage turbine Fly arrested EP ash by

CW system through CT pond Reheat & reimpulse turbine

Table 2.2

Future Capacity addition of 2 x 250 MW is under execution.

Expansion

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g) Infrastructure: With the time DVC developed and expanded its infrastructure five thermal power station with a capacity of 2570 MW, three hydro-electric power station with a capacity of 144 MW and one gas turbine with a capacity of 82.50 MW contribute to a total installed capacity of 2796.60 MW .presently dvc has 60 sub stations and receiving stations more than 5500 circuits kms of transmission and distribution lines.DVC had also four dams, a barrage and a network of canals that play an effective role in water management. The construction of check dams, development of forests and farms and upland and wasteland treatment developed by DVC play a vital role in eco conservation.

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H) DVC power plants, dams and barrage

Hydel Power Plant Maithon Panchet Tilaiya

Thermal Power Dam GT Plant Konar Maithon BTPS (B) Panchet CTPS Tilaiya DTPS Maithon MTPS

Table2.3

Fig 2.1

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DVC Plants Power Plants

Name HYDEL Tilaiya RiverBarakar 4 Dist.-Hazaribagh (2X2 MW) State- Jharkhand MW U-I Feb U-II July 53 53 Location Existing Capacity Commissioning

Maithon

RiverBarakar 63.2 MW U-I Oct Dist.Burdhaman (2X20+1X23.2 MW) U-II Mar State- West Bengal U-II Dec 58 RiverDamodar 80 Dist.Dhanbad (2X40 MW) State -Jhankhand . Location 147.2 MW Capacity MW U-I Dec U-II Mar 91

57 58 59

Panchet

Total Hydel Name THERMAL Bokaro 'B'

Commissioning MW U-I Mar U-II Nov U-III Aug 93 86 90 64 65 68 11

DistBokaro 630 State- Jharkhand (3X210 MW)

Chandrapura

DistBokaro 890 MW U-I Oct State- Jharkhand (3X130 + 2X250MW) U-II May U-III July U-VII Nov U-VIII July 11 Dist.Barddhaman StateWestBengal 350 (1X140 + (1X210 MW)

Durgapur

MW U-III Dec 66 MW) U-IV Sept 82

Mejia

Dist.Bankura 1840 State(4X210 +2X250 WestBengal 1X500MW)

MW U-I Mar + U-II Mar U-III Sept U-IV Feb U-V Feb U-VI Sept U-VII Aug 11 MW U-I May 12

96 98 99 05 08 08

Durgapur Steel Dist.Barddhaman StateWestBengal Total Thermal .

500 (1X500 MW)

4210 MW
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GRAND TOTAL Table 2.4

4377.2 MW

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I) Transmission: Charged with the responsibilities of providing electricity, the vital input for industrial growth in the resource-rich Damodar Valley region, DVC over the last 60 years has developed a big and robust transmission network consisting of 132 KV and 220 KV grids. DVC grids operated in unison with the Eastern Regional grid through 132 KV and 220 KV Tie lines. All the power stations and Sub-stations of DVC are connected with the DVC grids. DVC power consumers are provided supply at 33 KV, 132 KV and 220 KV pressure. DVC Transmission Lines in service at a Glance

State Jharkhand West Bengal TOTAL Table 2.5

Transmission line length in CKm 220 KV 132 KV 798 2238 536 1177 1334 3415

DVC Sub-stations in Service (Nos.) at a Glance

State Jharkhand West Bengal TOTAL

Substations in nos. 220 KV 4 6 10

132 KV 12 21 33

Table 2.6

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J)Dvc performance: Physical

Generation of Electricity Actual Generation(MU) Plants Thermal Hydel Overall 2009-10 14521.52 198.11 14719.63 2010-11 16263.9 115.6 16379.5

Other operating parameters of thermal generating units: Thermal Parameter Plant Load Factor (%) Specific Oil Consumption (ml/kwh) Auxiliary Power Consumption (%) 2009-2010 61.17 2.66 10.68 2010-2011 68.51 1.74 10.72

Table 2.7

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k) Finance

(YEAR OPERATIONAL RESULTS Particulars 2008-09 A. Revenue Account - Power 1. Revenue i) Sale of power a. Firm Domestic Sale b. Firm Export Sale through PTC c. Unscheduled Interchange d. Sale of (up to 28.02.07) MTPS # 5 income 4620 310 410 56 5284 370 5654 2277 370 616 37 3300 320 313 5137 338 113 34 5554 329 5883 2721 875 700 29 4325 351 383 18 5077 (395) 806 (77) 590 10 5568 (221) 187 (86) 4847 802 51 80 5620 135 5755 3162 637 792 39 4630 2009-10

2008-2009)

(Rs. in crore) 2010-11

e. Total [i (a)+i (b)+i (c)-i (d)] ii) Miscellaneous Income iii) Extra-ordinary Income iv) Total Income (i + ii + iii) 2. Revenue Expenditure (Rs. in Crore) i) Fuel ii) Purchase of Power iii) O&M, Establishment Charges iv) Overhead Charges v) Total (i to iv) vi) Depreciation vii) Interest

viii) Bad debt and Provision for Consumers O/S & Provisions for 76 Others 3. Total Expenditure: [v+vi+vii+viii] 4. Effects Transactions (Debit)/Credit of & 4009 Extra-ordinary Past Years (590)

5. Power Surplus before Tax: [1(iv)1055 3+4] 6. Deficit on Irrigation & Flood Control (73)
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7. Income Tax 8. Net Surplus after Tax:[5+6-7] 9. Gross Margin: [1(i)-v]

95 887 1984

34 300 1229 806

120 990 187

10.Current Years Profit on Power: 1645 [9+1(ii)-vi-vii-viii] Table 2.8

Sources & Utilization of Fund Particulars 2008-09 (Rs. crore) SOURCES A. Members fund: 4004.22 (i) Loan capital (ii) Ploughed back 426.00 power surplus (iii) interest Retained 224.31 in % 12.63 1.34 0.71 14.68 20.35 41.36 23.61 100.00 71.29 28.71 100.00 2009-10 (Rs. crore) 4655 131 235 5020 11501 15614 6780 38915 22904 16011 38915 in % 11.96 0.34 0.60 12.90 29.56 40.12 17.42 100.00 58.86 41.14 100.00 2010-11 (Rs. crore) 5020 -34 300 5286 16337 16569 6075 44267 23145 21122 44267 in % 11.34 -0.08 0.68 11.94 36.91 37.43 13.72 100.00 52.29 47.71 100.00

Total members fund 4654.53 (i+ii+iii) B. Borrowing from markets central 6452.61 loan and others C. resources Internal 13111.76 7484.40

D. Capital Reserve UTILISATION Gross fixed assets Capital work progress TOTAL in

TOTAL (A+B+C+D) 36357.83 22601.93 9101.37 36357.83

Table 2.9

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NOTE: 1. Loan capital contributed by the participating Governments to meet capital cost of the projects is however treated as DVCs own resources.

2. Power surplus and retained interest ploughed back fund-awaiting transfer to capital head.

Capital Expenditure & Sources(Power)-Cumulative (Up 2008-09 1. Capital Expenditure 2. Sources a. Central (i) Loan Capital Government 1374.07 142.00 78.25 Government 1284.21 142.00 69.34 1345.94 142.00 676.72 1564.66 6452.61 13111.76 7484.40 31703.30 1495.55 1594.32 31703.30 to)

(ii) Ploughed back power surplus (iii) Retained Interest b. W.B. (i) Loan Capital

(ii) ) Ploughed back power surplus (iii) Retained Interest c. Bihar Government Loan Capital Ploughed back power surplus Retained Interest d. Market Loan, Central Loan & Others e. Internal Resources f. Capital Reserve TOTAL Table 2.10

NOTE: Capital Reserve generate due to Revaluation of Assets.

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Key Ratios Growth (%) i) Increase in Total Income ii) Increase in Profit Before Tax iii) Increase in Debtors iv) Increase in Inventory 2. Profitability (%) i) Gross Margin/Sales ii) Profit (PBT)/Sales 37.56 29.10 22.12 14.50 2.32 17.61 3.33 0.90 2008-09 14.17 (16.72) 49.07 25.50 2009-10 4.05 (50.97) 33.69 17.31 2010-11 (2.18) (76.79) 36.01 6.91

iii) Rate of Return (Post Tax-excluding extra 4.44 ordinary income) 3. Solvency / Liquidity i) Debt to Net Worth Ratio ii) Current Ratio iii) Quick Ratio 4. Turnover Ratio i) Inventory Holding Thermal (Monthly 0.88 Consumption) Fuel ii) Debtors Holding (Monthly Sales) Table 2.11 6.08 0.39 1.36 1.21

0.62 1.89 1.66

0.85 2.51 2.26

1.13 7.73

1.14 10.39

* Figures within () indicate decrease.

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l) Growth plans: -

Generation projects

Fig 2.2

Capacity Addition Programme Capacity Addition Status Upto May'2012

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Sl. Project No. 1 2 3 4 5 6 7 8 9 10 11 12 13 MTPS Extension MTPS Extension CTPS Extension CTPS Extension Mejia TPS Mejia TPS Koderma TPS Koderma TPS Durgapur Steel TPS Durgapur Steel TPS RaghunathpurPh-I TPS RaghunathpurPh-I TPS Bokaro-A TPS

Unit

Capacity Status (MW) COD declared 29.02.2008 COD declared 24.09.2008 COD declared 02.11.2011 COD declared 15.07.2011 COD declared 02.08.2011 on on on on on

Project implementation by DVC own Unit#5 250 MW Unit#6 250 MW Unit#7 250 MW Unit#8 250 MW Unit#7 500 MW Unit#8 500 MW Unit#1 500 MW Unit#2 500 MW Unit#1 500 MW Unit#2 500 MW Unit#1 600 MW Unit#2 600 MW Unit#1 500 MW

Full load achieved on 26.03.2011 Full load achieved on 20.07.2011 Under Construction COD declared 15.05.2012 on

Full load achieved on 23.03.2012 Under Construction Under Construction Under Construction

Project implementation through Joint Venture 1 Maithon RB TPS [by MPL, JV Unit#1 525 MW of DVC & TPC] Unit#2 525 MW COD declared Sept'2011 on

Full load achieved on May'2012

Table 2.12

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Anticipated transmission system

Graph 2.1

Growth plans

Plan period 10th plan

year 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007

Energy requirement(MU) 9307.20 9635.00 10018.08 13588.80 14155.00

Peak demand (MW) 1758 1819 1892 1986 2145

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Plan period 11th plan

year 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012

Energy requirement(MU) 15146.00 15903.00 17334.00 18200.00 19135.00

Peak demand (MW) 2340 2574 2857 3085 3333

Table 2.13

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m) Human resource management: -

The most significant factor contributing to the success of DVC so long is its human resources. Since inception, DVC is a major source of providing employment to a large number of individuals in various disciplines like engineering, technical, accounts & finance, general categories & skilled / unskilled local people. DVC is proud to have succeeded in motivating the workforce and bringing the best out of them. As on 31st March 2006 DVCs total employee strength stands at 11169. The focus of human resource development in the Damodar Valley Corporation has been changing in tune with the rapidly changing external environment. Man: MW Ratio The overall Man: MW ratio in the year 2005-06 was 3.76 as against 3.8 in the year 2004-05.

The GroupWise number of employees over the last 5 years depicted in the following table:

YEAR

Category of Employees Group A Group B 6337 6046 5869 5621 5591 Group C&D 4783 4460 4226 3983 3808 Total 12745 12097 11731 11384 11169 1625 1591 1636 1780 1770

2001-02 2002-03 2003-04 2004-05 2005-06

Table 2.14

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Chapter 3

33

Literature review Procurement in public sector units: -

a) Definition and meaning of procurement

Procurement is the acquisition of goods or services. It is favorable that the goods/services are appropriate and that they are procured at the best possible cost to meet the needs of the purchaser in terms of quality and quantity, time, and location . Corporations and public bodies often define processes intended to promote fair and open competition for their business while minimizing exposure to fraud and collusion. Almost all purchasing decisions include factors such as delivery and handling, marginal benefit, and price fluctuations. Procurement generally involves making buying decisions under conditions of scarcity. If good data is available, it is good practice to make use of economic analysis methods such as cost-benefit analysis or cost-utility analysis.

b) Objectives: 1. To ensure procurement of right quantity, right quality of Material from right source at right price and at right place and time, keeping transparency in contractual process. 2. To keep pace with the changed scenario under the dynamic market Conditions, liberalized economy, new technology/process/product and Maintenance schedule. 3. To maintain proper co-ordination amongst contractors/suppliers/service providers and Indenting Departments. 4. To prepare vendors profile as well as updating of vendor list depending upon the performance of the vendor and explore new entries in the field. 5. To bring out economy and efficiency in implementation of the Purchase/project/works contract within given time schedule. 6. To create competitive environment by providing opportunity to all qualified eligible bidders to participate in the tendering process.

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7. To encourage the development of local vendors/agencies and domestic manufacturing industries. 8. To explore import substitute without compromising quality and price.

c) Types of procurement and its features: -

Direct procurement and indirect procurement TYPES Direct Indirect procurement procurement Raw material Capital Maintenance, and goods repair, and production and operating supplies goods services Quantity Large Low Relatively high Low Tactical spare Low Low High Strategic Crude oil storage facilities

Frequency High Value FEATURES Nature Industry specific Operational

Crude oil in Lubricants, Examples petroleum parts industry

Table 4.1 Based on the consumption purposes of the acquired goods and services, procurement activities are often split into two distinct categories. The first category being direct, production-related procurement and the second being indirect, nonproduction-related procurement.

Direct procurement occurs in manufacturing settings only. It encompasses all items that are part of finished products, such as raw material, components and

parts. Direct procurement, which is the focus in supply chain management, directly
affects the production process
35

of

manufacturing

firms.

In

contrast, indirectprocurement activities concern operating resources that a company purchases to enable its operations. It comprises a wide variety of goods and services, from standardized low value items like office supplies and machine lubricants to complex and costly products and services like heavy equipment and consulting services.

d) Procurement steps: Procurement life cycle in modern businesses usually consists of eight steps:

Information gathering: If the potential customer does not already have an established relationship with sales/ marketing functions of suppliers of needed products and services (P/S), it is necessary to search for suppliers who can satisfy the requirements.

Supplier contact: When one or more suitable suppliers have been identified, requests for quotation, requests for proposals, requests for information or requests for tender may be advertised, or direct contact may be made with the suppliers.

Background review: References for product/service quality are consulted, and any requirements for follow-up services including installation, maintenance, and warranty are investigated. Samples of the P/S being considered may be examined or trials undertaken.

Negotiation: Negotiations are undertaken, and price, availability, and customization possibilities are established. Delivery schedules are negotiated, and a contract to acquire the P/S is completed.

Fulfillment: Supplier preparation, expediting, shipment, delivery, and payment for the P/S are completed, based on contract terms. Installation and training may also be included.

Consumption, maintenance, and disposal: During this phase, the company evaluates the performance of the P/S and any accompanying service support, as they are consumed.
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Renewal: When the P/S has been consumed or disposed of, the contract expires, or the product or service is to be re-ordered, company experience with the P/S is reviewed. If the P/S is to be re-ordered, the company determines whether to consider other suppliers or to continue with the same supplier.

Additional Step - Tender Notification: Some institutions choose to use a notification service in order to raise the competition for the chosen opportunity. These systems can either be direct from their e-tendering software, or as a re-packaged notification from an external notification company.

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(e) Working of procurement in psus

As I have done my project at CTPS, DVC which is one of industry in the field of the power generation. So they required purchase of direct machinery which is used in the production and as well as they also required indirect services according to demand. So I am going too discussed about the procurement in CTPS: DVC and some of the examples relating to it. The process are as follows: -

There are two section s which deals in the process of procurement 1. User section 2. finance section 3. Purchase section

Now, we discussed each of them: 1. User section in this we prepare a demand note regarding the procurement. (a) Back up sheet: first of all ,we prepare the backup sheet in which the details of the previous purchases viz rate, quantity, consumption pattern are given.

(b) Quantity to be procured: here quantity of the materials are decided that in which amount it should be procured.

2. Finance section: in this section , the commercial term and conditions are fixed. Now the technical and commercial term and condition s are incorporated .and finally the NIT ( notice inviting tender) is floated

3. Purchase section: in this section the administrative approval is taken.

After that , mode of tendering is selected

NOTE: in the indirect procurement ,wedidn,t prepare backup sheet and remaining all are same.

Now we discuss about the tender:

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Tender
Tender" means an invitation to offer for an item/items or work. All Public Sector purchases/Contracts in India, over a certain value has to be publicly notified through Tender Notices which are advertised through All India Newspapers, Trade Journals, Departmental Publications and Notice Boards, and now on Internet. An estimated Rs.300 billion (US$ 6.6 billions) worth of equipment and services are procured annually through All India Tenders.

Types of tender
Broadly, there are three types of Tenders: Limited Tendering, Open Tendering, and Single Tendering

Limited Tendering:

This involves issuing Tender to few selected tenderers only.

Open Tendering

This means that the Tender is open to any supplier who can quote for the materials as per requirements. This is usually done by publishing the Tender Notice in Newspapers/Trade journals/Internet and other bulletins.

Single Tendering:

Single Tendering means sending the Tender to one particular party. Normally, it is either for an item where there is only one supplier or for an item where the purchaser has developed confidence in one supplier only and would just like to verify the current price, delivery etc. Single Tenders are also sent for items of proprietary nature.

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Tender documents: -

Type of Item/Work enquired for Name and Address of the Tender Authority The Tender Enquiry reference Number/Date The cost and the last date for collection of Bid Document Earnest Money Deposit This deposit is refunded to unsuccessful Tenderers Due Date/Time The last Date/Time for submission of Tender papers Opening Date The date, time and venue of opening of the sealed Tenders in presence of representatives of Tenderers Pre-qualification of Tenderers The criteria/qualifications that will be considered before issuing Tender Documents to a Tenderer. Estimated cost of Item/Work Mentioned in selected Tenders Any other Instructions/Information

Collection of Bid Documents/Tender Papers: Interested parties, to collect / Purchase the Tender / Bid Documents on payment / free of cost, as the case may be. Every Tender quotation has to be accompanied by the Tender Documents. Submission of Offers: The Quotation has to be submitted along with all other Documents as stipulated by the Tender Authority in the Tender Notice. Attending Tender opening: Representative of the Tenderers are allowed to attend Tender opening. The activity during Tender opening is to list down the names and addresses of the Tenderers, note down all the rates/freight charges/taxes etc. and details of whether - EMD paid, Tender Document purchased, any Tender quotation is rejected, if so for what reasons. The comparative statement of all the rates offered and other terms like freight forwarding, quality assurance, Taxes, identifying the Lowest (L1, L2, L3) Offers etc. When the Order will be issued and to which parties/Party.

Periodic updates and Post-Tender status : The concerned parties regularly follow up and ensure that the Purchase/Work Order is issued.

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Negotiation: If for some reason, the party is not able to comply with the terms of the Order, an amendment to the Order needs to be issued. The order may not necessarily be placed on L1 since, various other criteria like past performance of the party, urgency of the requirement etc. are also considered before decision is taken. In some cases orders are divided between two or three parties. At times L2 is asked to work/supply at L1 rates. In these situations, negotiation plays an important role especially in cases where multiple technology, high value Items/Work are involved.

Lastly, after fulfillment of tendering process award of contract is given to the eligible party. If after tendering no result is outcome than re-tendering is done.

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Example: (1) Procurement of material (purchase proposal)

Tender for single two part tendering are invited on behalf of CTPS,unit 7&8,DVC, for supply of hydrazine hydrate securely packed for destination basis ,CTPS, chandrapura, bokaro on door delivery basis.

Sub- supply of hydrazine hydrate for CTPS,unit 7&8,DVC Earnest money nil Cost of tender paper nil E-procurement portal www.tenderwizard.com/dvc Last date for downloading of tender documents 13/3/2012 up to 15.00hrs Last date of on line submission of tender document 13/3/2012 up to 15.30 hrs. Tender opening date and time 13/3/2012 after 16.00 hrs.

Tender duly filled in should be as per defined in details in GCC( general conditions of contract) which is available in www.dvc,gov.in/gcc-2009 with NIT for subject supply.

In sending your quotation you will be deemed to have undrrstood and accepted all the terms and conditions stated in the enquiry. DVC reserves the rights to cancel and quotation in part or full and to reduce or increase the quantity of supply without assigning any reason thereof.

Please may send your query to: The superintending engineer (tech.) Unit 7&8, CTPS Ambedkarbhawan p.o. - chandrapura dist. - bokaro (Jharkhand) pin- 828403

Or may contact through e-mail [email protected]

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Or telefax 06549-242428Tenderers authorized representative may be present at the time of opening .the quotation should be submitted by online at earliest. The firms name and offer no. with date must be maintained clearly. Offer validity 120 days from opening

S.no. 1.

description Hydrazine hydrate(80%) confirming

quantity required 3 MT

To is. 12086-1987 and reaffirming 1997 Duly packed in manufacturers original 200 kg drum

Orders placed by the corporation are subject to the special term and conditions as follows and also will be guided by GCC available in the www.dvc.gov.in/gcc-2009.pdf . However if any term and conditions maintained in special terms and conditions are similar with that of gcc, then the former should prevail.

NOTE: during tendering process following should be documented Estimate for mechanical seal (demand) Checklist for purchase proposal Certificate of oem/oes (a) manufacturers /venders name (b) Description of articles (c) Control code no. (d) indigenous/imported item (e) if imported ,name of the Indian agent, if any (f) Indent no with date (g) Estimated value (h) Basis of estimate Approval for invitation and opening of tender Enquiry for procurement (a) To the party involved (b) Details about the party that how many order received by the company in previous 5 years and delivered or not. (c) The company is registered or not (d) The company is paying taxes duly or not. Quotation done by the party

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 If the quotation is according g to the orderer then it is duly signed by authorized higher person .if necessary or if any change in the price negotiation .orderer call for negotiation according to the approval from higher authority. Finally the purchase order is placed

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(2) Procurement for maintenance:- (work proposal)

Annual rate contract for the maintenance of telephone lines in DVC Colony and power house. Sub annual rate contract for the maintenance of telephone lines in different areas of DVC colony and power house including telephone connections and stringing of telephone cable on as and required basis.

Vide.no. ct/ce/t-es-11(w)/66 Dated 1/7/2011 will be expire on 30/6/2012

The AMC is meant for maintaining about 700 nos of telephones lines in different areas of DVC colony and power house. As it is felt necessary to finalize a fresh ARC in boq format before expiry of running AMC .so that continuity of such essential services remains maintained 100 new connections have been provided after enhancement of exchange capacity for the DVC officials posted in unit 7&8 construction Main contractor m/s BHEL and other sub-contractors and also in new power house area. Contract 1 year Estimated amount for proposed ARC Rs 4, 68,779

Necessary budget provision has been proposed in BE 2012-13 under chargeable revenue head of E.S.2, CTPS.

NOTE: Same steps are followed in this as done in the purchase proposal during tendering.

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Chapter 4

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RESEARCH METHODOLOGY

Research definition:
Research is careful inquiry or examination to discover new information and relationship and to expand and to verify exiting knowledge, Research always starts with questions or a problem. Its purpose is to find answer to questions through the application of the scientific method. It is a systematic and intensive study directed towards a more complete knowledge of the subject studies.

Research design
Research design is the plan, structure and strategy of investigation conceived so as to obtain answer to research question and to control variance. - BY KERLINGER From definition it is evident that research design is more or less a blueprint of research. At the outset may be noted that there are several ways of studying and tackling a problem. There is no signal perfect design. The research design can be classified in to true broad categories: Exploratory Descriptive Casual

Exploratory research is focus on the discovery of ideas. Exploratory research is carried out to define problems and developed hypothesis to test later. An exploratory study is generally based on the secondary data that are reading available. It does not have to change his focus of direction, depending on the availability of new ideas and relationship among variables. Descriptive studies are undertaken in many circumstances. Descriptive studies can be complex, determining a high degree of scientific skill on the part of the researcher.

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Casual research helps in determined cause and effect relationship. Between two or more variables. The present study seeks to find out the consumers attitude towards buying of bike. The study also aims at findings out the drawbacks of the marketing set up of mint newspaper So this makes the study a descriptive one.

Sources of Data
The sources of data collection methods are as follows.

1) Primary data:The primary data is that which details we collect first time from the market and also used first time in the research. We also say that the information is first time in the research decision .

2) Secondary data:Secondary data are those data which are already collected by someone for some purpose and are available for the present study; secondary data are already collected by the companys records and other librarys books. When the secondary data are sufficient, the researcher has to be satisfied with the primary sources of data.

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Chapter 5

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Data analysis
Capital structure
IntermsofSection30oftheAct,entirecapital requirementoftheCorporationwastobemetbytheparticipatingGovernments. Till196869theparticipatingGovernmentshadprovidedanamountof214.72croreonlyascapital.Fro m1969-70onwards, the participatingGovernmentsdidnotcontributeanycapital.Consequently,thecapitalrequirem entswerepartiallymetby withholdinginterestonCapitaLandsurplusonpowerpayabletotheparticipating Governments.Ason31March2010,4654.55 croreshownInthecapitalaccountIncluded4347.401croretransferredtocapitalaccount( power)ofthe participating Governmentsbywayofploughbackoftheaccumulated powersurplusandfromaccumulatedinterestpayabletotheparticipating Governments.However,formal a p p r o v a l from1986-87for t h e s e t r a n s f e r s was pending(March2010). Thedistributionof capital outlayandthecontributionofthe

threeparticipatingGovernmentsincludingploughbackofthe accumulatedpowersurplusandinterestpayableoncapitalson31March2010aswell asthefinancingpatternofthedeficit aregiveninthefollowingGraphs(1and2):

Graph1

Capitaloutlaytowardsmain objects (power, irrigationandfloodcontrol)

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Financial Position
.Sourcesandapplicationoffunds

Graph2and3indicatethesourcesandapplicationoffunds oftheCorporationforthelastthreefinancial yearsending2009-10.

Graph 2 Source of fund

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Graph 3 Application of fund

Theincreaseinpaidupcapitalwasdueto transferofsharesofsurplusof426.01crore, retainedinterestof196.67crore oncapital oftheparticipatingGovernmentstocapitalaccountandcapitalexpenditureof27.65croremad ebyWestBengal Government, fromtheyear200304to200708,transferredtotheCapital AccountofGovernmentofWestBengaTheIncrease In l borrowingsIncludingProvidentFund&PensionFundwasmainlydue10drawlofProjectloa noff4701.84croretakenfrom PowerFinance CorporationandotherFinancial Institutionsforongoingcapacityadditionprojectsandprovisionofadditional liabilityoff428croretowardspensionandgratuityfundduringtheyear2009-10.

Financial ratios
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Thecapitalemployedhaddecreasedduetodecreaseinnetfixedassetsandincreaseincurre ntliabilities.Networth anddebtequityratiohad, however, increasedduetoincreaseinpaidupcapital anddecreaseinreserve. Steep increaseinDebt anddecreaseinReservesindicatesthe deterioratingfinancialhealthoftheCorporation.

Working capital

2007-GI a)CurrentAssets b)Currentliabilities c)WorkingCapital(a-b) 5814.68 3828.90 1985.78

2008-GB 5179.84 3815.51 1364.33

2009-10 5664.28 3963.57 1700.71

TheWorkingCapital fortheyear200910hadincreasedby24.66percentcomparedtopreviousyearmainlyduetoincrease inCurrentAssets,LoansandAdvances.

2007-GI
CapitalEmployed(fIncrore)3 NetWorth(fIncrore)4 DebtEquityRatio5 14217.72 16280.39 0.23:1

2008-GB
12805.52 16805.73 0.39:1

2009-10
12335.05 17024.07 0.75:1

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Chapter 6

Findings
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The power of talking decisions is centralized at the higher authority i.e. Kolkata (headquarter of DVC).

There is healthy competition among the tenderers in the procurement process. There is a scope of development of the party involved in the procurement. Due to procurement ,they keep pace with the changed scenario under the dynamic market Conditions, liberalized economy, new technology/process/product andMaintenance schedule.

Recommendations
As I done my project on title procurement in psu, s at CTPS, DVC. It is one of the power generation company. So i want to say that it plays major role in the development of respective areas. They should work regularly and effectively in their field. And there is a healthy completion in the procurement but its a lengthy process.so there should be a different department for this.

Conclusions
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DVC plays a major role in the production of electricity and they also helps in the flood control and irrigation facility in the respective areas. It is a mass responsibility of society, administrator and stable people to stand them in row of common man. I learnt that DVC has a well-defined policy about both wage & salary administration and finance. Company strictly confirms to all the provisions and government policies and all the statuarycompliances. Its adopted policies and schemes really work for the officers, staff and worker and provide the benefits that work as a booster for them and make them more responsible and effective. If the satisfaction level of the employees is increased then DVC will get more benefited in production.

Bibliography
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DVC NEWS Bokaro at a glance Bokaro darpan

Corporate office DVC publication

Website- www.dvc.gov.in www.wikipedia.org

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