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Energy Efficiency Services Ltd (EESL), the Power Ministry’s arm for manufacturing and supplying energy efficiency services and products, is pitching in to ease the burden of demonetisation.
The company is in the process of procuring 10 lakh Point of Sale (PoS) machines. “We have extended the tender date by another three days to encourage local manufacturers,” Saurabh Kumar, Managing Director of EESL, told BusinessLine .
EESL is responsible for the Domestic Efficient Lighting Programme (DELP) under which it distributes LED bulbs procured through a competitive bid.
Explaining the need for venturing into the PoS machine business, Kumar said, “India currently has 14 lakh PoS machines. Of these, only 50,000 are mobile PoS machines. There is an evident demand for these machines in the country today.”
Through this tender, EESL will procure 7 lakh mobile machines and the remaining 3 lakh will be regular (fixed) ones. EESL estimates that a regular PoS machine currently costs Rs. 7,000, while a mobile PoS machine costs Rs. 3,000.
This pitches the total tender at nearly Rs. 420 crore. The initial call for bids opened on December 1 for a period of two weeks. This has now been extended to three weeks.
‘Bucket fill’ approach
EESL is in talks with SBI and ICICI for using the PoS machines to encourage cashless transactions. The company will procure the machines through ‘the bucket fill’ approach, according to Kumar.
According to this, the companies first commit to offer a PoS machine at the lowest price possible. All other bidders will be asked to offer the number of machines they can at the lowest price quoted. Kumar expects larger PoS machine manufacturers such as Ingenico and Verifone to compete. Smaller players such as MSwipe and Ezetap are also expected to bid.
“There are some start-ups that are also interested in competing. The bid date extension was done for them,” he said. The business model for offering these machines to retailers is yet to be finalised, Kumar said. Currently, banks charge a one-time payment of Rs. 3,000 per PoS machine and a rental of Rs. 250 per month, he added.
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