PSU’s Opting for Local Procurement to Boost Ancillaries

Four major PSU’s of Orissa state have increased their procurement of various items of necessity from different local ancillaries. This was revealed in the Plant Level Advisory Committee Meetings (PLAC). These PSU’s are NALCO (National Aluminum Company Limited), HAL (Hindustan Aeronautics Limited), RSP (Rourkela Steel Plant, a division of SAIL) and Neelachal Ispat Nigam Limited (NINL).

FD fanAmong these four PSU’s, RSP topped the list by procuring equipment worth of Rs.81.7 crore from the local ancillary units in the year 2009-2010. It has also procured Rs. 45.76 crore equipment in the April-June quarter of 2010. This plant has procured from as many as 198 vendors in the local area.

NALCO procured Rs.57.06 crore of equipment in 2009-2010 and set a procurement target of Rs.70 for the next fiscal year. The company receives various items of necessity from 49 vendors, of which 9 percent are local vendors.

NINL procured Rs.4.19 worth of equipment from local vendors in 2009-2010. The total number of vendors for this unit is 35. HAL’s unit has procured equipment worth Rs.1.52 crore in 2009 – 10 from local vendors.

PLAC meetings with public sector companies and PLCC meetings with private sector companies are conducted at regular intervals to review the steps taken by these companies in promoting ancillaries. As the the guidelines by Central MSME Ministry, mother industries need to procure at least 20 percent of its necessities from local ancillaries. But this guideline is not mandatory.