IN the midst of severe energy crisis, the government is in the process of implementing Rs6.7 billion project for free distribution of 30 million energy savers — compact fluorescent lamps — to consumers, ignoring its health hazards in the absence of proper disposal of such bulbs.
Officials at the devolved ministry of environment and water and power agree that compact fluorescent lamps (CFL) contain mercury content that requires proper disposal process to avoid risk of cancer. They privately agree that consumers generally throw defective bulbs or those completing their normal life into dustbins and municipal wastes that pose cancer threat. They, however, argue that the government would develop the proper disposal mechanism by the time these CFLs complete their life with a time lag of 3-4 years.
On the other hand, a more environment-friendly solution — solid state light emitting diodes (LEDs) — has become victim to bureaucratic wrangling. Following decisions of an energy summit presided over by the prime minister and attended by all the chief ministers in May 2010 to save about 1000 mw of electricity through conservation measures, the National Energy Conservation Centre (ENERCON) advised the Capital Development Authority (CDA) to initiate a project to replace existing 65,000 street lights through LEDs.
The prime minister also desired that Islamabad must be made a model city in respect of energy efficiency and conservation.
Given the fact that the CDA was incurring Rs1.2 billion expenditure on existing inefficient street lights, the LED project was taken in hand to provide a saving of about Rs600 million per annum on existing number of street lights.
The ADB also supported the government initiative for Islamabad and agreed to make available $780 million investment but diverted the funds due to delays and bureaucratic disputes to major conventional power generation, distribution and lossreduction projects.
The LED project for Islamabad was at no additional cost to the government because the energy savings through street light replacement was to be paid to the contractors through international guarantees. It may be noted that LED lighting is a solidstate lighting component that does not utilise electrical filaments or gas as the light is emitted from a solid semiconductor object.
The solid state lighting create visible light with reduced heat generation and allows greater resistance to shock, vibration, wear and tear, increasing its life span to 80,000 to 100,000 hours compared with 10,000-20,000 hours in CFLs.
The CDA invited expressions of interest for installation of 65,000 LEDs and six international companies responded.
Of them, three were technically pre-qualified and invited to bid. On the basis of technical and financial bids, the price offered by one of the bidders was too high and he was left out of the race.
Subsequently, the lowest bidder offered a bid of about Rs5.5 billion at the rate of about Rs100,000 per LED. The lowest bidder was forced by the CDA to share half of the project with second lowest bidder even though its bid was about Rs300 million lower when the second lowest bidder agreed to match the lowest bid. As this structure was a departure from the bid conditions, a clearance was sought from Public Procurement Regulatory Authority.
The PPRA did not clear the proposal saying it was in violation of Rule 29 and 30 of the PPRA Rules 2004. It also said the Rule 36 (b) invoked by the procuring agency prohibit any amendment in technical proposals during the technical evaluation and allow that the lowest evaluated bid shall be accepted.
As the legal opinion went against the CDA’s wishes, it started to create roadblocks even though the ADB, the ministry of water and power and Enercon supported the project. Meanwhile, the Lahore City Administration procured 925 LEDs for its Canal Road Remodelling project at Rs130,188 per light.
As the delays continued, the ADB diverted funds allocated for energy efficiency projects towards conventional generation and distribution projects.
This led the CDA to re-evaluate the overall cost and found that based on all aspects of the project, the bid offered by the lowest bidder was in fact Rs1 billion lower than its competitor.
At this stage, the CDA observed that the unit price of LED light — Rs100,000 per unit — was very high and should be reviewed thoroughly.
It also claimed that financial rate of return of the project was not favourable and hence it should be re-examined. It also took the position that the tendering process was not approved by the competent authority and hence the project should be implemented in phases; initially, a small pilot project be undertaken to ascertain if economic viability justified replicating it in other areas.
The new proposal was conceptually cleared by the Central Development Working Party of the Planning Commission which desired that the firm commitment of the ADB to finance the project be produced within a week. The ADB said it had alreadydiverted the funds to other projects because of slow movement on the LEDs project.
As a result, the LED lighting project that would have been led to replication in other cities for energy conservation has come to a standstill.
On the other hand, the CFL project approved only on the premise of an estimated energy saving of Rs17 billion against existing conventional bulbs has come into implementation stage despite certain objections raised by the ministry of water and power.
The power ministry had pointed out that “keeping in view the production of higher order harmonics in CFLs working, which may heat up the feeders and distribution transformers, sponsors (Pepco) may consider the future technical problems in adding these CFLs in the system. It said the quality of CFL was a serious issue.
A top Enercon official agreed that LEDs were more environment friendly, economical and efficient than CFLs, but said the introduction of CFLs was the first step in the emergent situation and LEDs could be adopted subsequently.