This paper examines sustainable procurement within the Indian Power Transmission Utilities, highlighting its substantial influence on environmental, social, and economic aspects. The integration of sustainability principles in procurement aligns with the United Nations Sustainable Development Goals, transforming procurement into a critical tool for responsible practices and sustainable development. The paper underscores sustainable procurement as a holistic process, emphasizing favourable outcomes across the procurement lifecycle while minimizing negative impacts. This approach is essential for the sector to meet contemporary challenges and align with international sustainability benchmarks.
Key principles of Sustainable Procurement include accountability for societal, economic, and environmental impacts, adopting a life cycle perspective, transparency, ethical behaviour, unbiased decision-making, stakeholder respect, adherence to law, and continuous improvement. These principles guide organizations to consider the broader implications of their procurement activities and strive for sustainability in every aspect of procurement.
The Sustainable Public Procurement (SPP) concept, evolving since the 2000s, has seen contributions from entities like OECD, ILO, WTO, EU, UNEP, and others, promoting regional adoption of SPP with a focus on competition, transparency, and legal adherence. Developed and developing countries are at various stages of SPP implementation, with India advancing through new rules and strategies that encourage sustainable procurement practices.
Key Drivers of Sustainable Procurement in the Indian Power Transmission sector include shifting customer preferences towards sustainable practices, market competitiveness, innovation, legislative compliance, supply chain security, investor confidence, worker welfare, cost optimization, and leadership commitment. These factors collectively drive the sector towards sustainability, responsibility, and economic viability, aligning with global standards.
Sustainable Procurement Process involves strategic planning, specification enhancement, supplier selection, and contract management. This cycle ensures the integration of sustainability in every procurement aspect, addressing immediate needs and broader sustainability objectives. The approach involves comprehensive stakeholder collaboration and a focus on life cycle cost analysis.
A critical aspect is the Life Cycle Cost (LCC) approach, considering total cost of ownership, operating, and end-of-life costs, as well as the societal costs of externalities. Shadow pricing is used to internalize environmental and social impacts, assigning monetary values to these externalities and influencing procurement decisions towards sustainability.
Contractual Provisions in the sector include a range of sustainability-related provisions, aligned with statutory acts and focusing on comprehensive environmental and safety plans. Despite these provisions, the papers identifies gaps, particularly in evaluating contractors’ sustainability capabilities before work commencement. The report emphasizes defining and documenting sustainability criteria, ensuring their alignment with sourcing strategies, and being objective, verifiable, and transparent. The incorporation of sustainability into tender documents includes a multi-faceted evaluation methodology, balancing costs with assurance levels and focusing on certification schemes.
The proposed roadmap includes pre-contractual evaluation improvements, strengthening contractual provisions, enhancing stakeholder collaboration, promoting transparency and ethical behavior, driving innovation, continuous improvement and training, implementing lifecycle cost analysis and shadow pricing, policy alignment, technology utilization, and regular policy review.
The paper concludes with a commitment to a comprehensive and strategic approach towards sustainable procurement in the Indian Power Transmission Sector, aligning with Global Sustainability Goals (SDG-17). By implementing these measures, organizations can contribute significantly to environmental preservation, social equity, and economic growth, setting a benchmark in the industry. The roadmap emphasizes the need for commitment, innovation, and adaptability in achieving sustainable development and resilience in the power transmission sector.
Sustainability Criteria, Sustainable Public Procurement, Shadow Pricing, Evaluation
