New Delhi: State-run energy companies have started procuring goods and services together to leverage the massive scale of their requirement to negotiate steep discounts on their purchases, starting with airline tickets, an official statement from an inter-ministerial group said on Wednesday.
A task force set up on 8 March comprising directors of all state-owned companies under the ministries of petroleum and natural gas, power, coal and new and renewable energy have tied up with six airlines including government owned-Air India to avail of discounts that will save as much as 10% of their annual air travel spending, said the statement.
The joint purchase of goods and services will eventually be extended to medical insurance, software licenses and hardware, said Rakesh Kumar, director (finance), NLC India Ltd., formerly known as Neyveli Lignite Corp., a state-owned company.
“When we go to the market individually, the negotiating capacity for getting a competitive price is less. Consolidation of demand helps in getting better terms of purchase," explained Kumar.
In 2014-15, 30 state-owned companies and 143 government institutions spent
Rs270 crore on air travel, the statement from the task force said about the combined market potential that these entities offer to companies.
“The approach adopted is to showcase all central public sector companies as a bigger buyer of goods and services and seek more competitive price, terms and conditions. It attracts service providers in terms of higher business volumes," said the statement.