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This report assesses the potential of electricity contract auctions as a procurement option for the World Bank's client countries. It focuses on the role of auctions of electricity contracts designed to expand and retain existing generation capacity. It is not meant to be a 'how-to' manual. Rather, it highlights some major issues and options that need to be taken into account when a country considers moving towards competitive electricity procurement through the introduction of electricity auctions. Auctions have played an important role in the effort to match supply and demand. Ever since the 1990s, the use of long-term contract auctions to procure new generation capacity, notably from private sector suppliers, has garnered increased affection from investors, governments, and multilateral agencies in general, as a means to achieve a competitive and transparent procurement process while providing certainty of supply for the medium to long term. However, the liberalization of electricity markets and the move from single-buyer procurement models increased the nature of the challenge facing system planners in their efforts to ensure an adequate and secure supply of electricity in the future at the best price. While auctions as general propositions are a means to match supply with demand in a cost-effective manner, they can also be and have been used to meet a variety of goals.

This book reviews the major developments in and the lessons learned from the 21-year (1991-2012) experience with private sector participation (PSP) in the power sector in India. It discusses the political economy context of the policy changes, looks at reform initiatives that were implemented for the generation sector, describes transmission and distribution segments at different points in the evolution of the sector, and concludes with a summary of lessons learned and a suggested way forward. The evolution of private participation in the Indian power sector can be divided into different phases. Phase one was launched with the opening of the generation sector to private investment in 1991. Phase two soon followed - early experiments with state-level unbundling and other reform initiatives, including regulatory reform, culminating in divestiture, and privatization in Orissa and Delhi respectively. Phase three, the passage of the electricity act of 2003 by the central government, followed by a large increase in private entry into generation and forays into transmission and experiments with distribution franchise models in urban and rural areas during the 11th five-year plan (2007-12) period. In phase four, at the start of the 12th five-year plan (2012-17), the sector is seeing a sharp reduction in bid euphoria and greater risk aversion on the part of bidders, who are concerned about access to basic inputs such as fuel and land. In this context, the report is structured as follows: chapter one gives introduction; chapter two presents private sector participation in thermal generation; chapter three presents private sector participation in transmission; chapter four deals with private sector participation in distribution; chapter five deals with private sector participation in the Indian solar energy sector; chapter six deals with financing of the power sector; chapter seven presents emerging issues and proposed approaches for the Indian power sector; and chapter eight give updates.

At the end of 2011, the Indian power sector found itself in financial crisis, just a decade after the 2001 bailout of state electricity boards (SEBs) by the central government. Bankrupt state power distribution utilities in several states were unable to pay their bills or repay their debts. Despite the passage of the landmark 2003 Electricity Act and implementation of a broad set of reforms over the past decade, the sector today is looking at another rescue from the center, four times larger than before. This financial rescue scheme amounts to about Rs 1.9 trillion ($42 billion) and was instigated by the nonperforming assets of the banks and other financial institutions. The Electricity Act was envisaged to create independent companies functioning on commercial principles, but they are still far away from that goal. This report presents a diagnostic of the financial and operational performance of segments in the power sector value chain between adoption of the Electricity Act, 2003, and 2011, including analysis of the factors that contributed to the recent crisis. The report focuses on efficiency and productivity, whether performance has improved over time, and which states have emerged as performance leaders. Analysis of this kind is not new or unique, but this report aims to integrate historical performance, the current situation, future projections of the impact of worsening sector finances, and the actions that need to be taken to check the downturn. The report draws primarily from utility data collected by the Power Finance Corporation in successive years on utilities operational and financial performance. The Power Finance Corporation data were collated into a single database with the addition of various operational parameters at the plant level and the utility level from the Central Electricity Authority.

Purpose This study aims to investigate digitalization as a performance driver in supply chains, especially the role of data analytics in the digitalization of procurement. The study investigates how digital procurement capabilities are linked to data analytics capabilities and supply chain operational performance and how this links to business success. Design/methodology/approach Using operational and dynamic capabilities as foundations for data analytics capabilities, this paper studied the digital procurement capabilities and proposed the conceptual model and hypotheses for empirical testing. The collected industry survey data and structural equation method are then applied to test the hypotheses. Findings The study confirms positive and significant relationships among digital procurement capabilities, data analytics capabilities and supply chain performance. Digital procurement capabilities mediate the positive relationship between external data analytics capabilities and supply chain performance. Research limitations/implications This study has some limitations that should be addressed. The empirical study was based on survey data from a questionnaire that was probably challenging for some respondent companies with low levels of digital procurement and data analytics. Also, it is necessary to adopt secondary data to measure business performance in future studies which reduces the effect of subjective bias. Practical implications From the managerial point of view, the findings highlight the importance of gaining knowledge from gathered data and digitalized processes. Managers must focus on data utilization capabilities to improve the operational performance expected from the digitalization of supply chain activities. In addition, managers need to consider exploiting of data through new creative approaches as part of standardized operations. Originality/value The present study contributes to existing knowledge by investigating the mediating role of data analytics capabilities between the digitalization of procurement and supply chain performance. The findings support a positive relationship between the data analytics capabilities and supply chain performance in digital upstream supply chain procurement processes. The present study also clarifies the impact and role of data analytics capabilities in digital supply chain development and success.

There is a significant potential to improve the benefits from public procurement through a better understanding of drivers in company success at the micro-level, an area that has received little study to date. To increase these impacts on innovation and markets, policy makers have opened procurement to innovation, including the strategic incorporation of formal standards in calls for tenders. Consequently, companies offering innovative solutions should have higher chances to be successful in public tenders. In addition, companies who engage in standardization activities at standards development organizations may have a competitive advantage in submitting tenders. Examining the case of Germany, this paper empirically investigates the effects of German manufacturing companies’ innovation activities and their engagement in national standardization on the receipt of contracts within domestic procurement competitions. The results of our empirical analyses based on German companies surveyed within the framework of the Community Innovation Survey show that being successful in product innovation and being engaged in standardization are significant positive predictors of companies’ success in public procurement. With implications for policy-makers and practitioners, this shows that public procurement is indeed open for solutions from companies active in innovation and standardization.

This study investigates the effects of procurement tools to support small and medium-sized enterprises (SMEs) in public contracts by analysing contract awards for public works published on Tenders Electronic Daily in 2018–2022. Focusing on dividing contracts into smaller lots, a key feature of the 2014 EU modernised procurement framework, this study’s findings reveal that splitting contracts might not necessarily attract SMEs to bid but increases their chances of winning such contracts. Other factors, such as using open and unrestricted bidding procedures and allowing SMEs to showcase their specialisation by awarding contracts based on the best price-quality ratio, positively affect the SMEs’ bidding. The findings of this study emphasise the importance of thoroughly considering individual contract characteristics and overall procurement settings to accommodate SMEs’ limited resource capacities and foster their performance in the public procurement marketplace.

Project delivery on time, with agreed quality and assigned budget, is the desire of project-based companies. Time, quality, and cost are determinants of project success; however, organisations suffer from achieving these three success criteria at the same time. Failures in project delivery cause the loss of the competitive advantage. The recent digital technologies introduce smart contracts to supply chain (SC) operations for improving SC processes. Project procurement is the area for smart contract implementation to deliver successful projects and gain sustainable competitive advantages. The aim of this study was in explaining how smart contracts benefit project organisations through project procurement. Qualitative research design guided this research with phenomenology. Semi-structured interviews generated the data. The obtained research data were analysed with thematic, textual, and discourse analysis. Published industry reports were used to triangulate the data. This study demonstrated an integrated relationship model to answer the research question. The research findings initially identified the fact that smart contracts improve procurement efficiency through cost, time, and quality. Secondly, smart contracts build a trust-less platform where reliability is delivered and reinforced with transparency, traceability, and security. This study found that enhanced procurement efficiency and reliability meet requirements to gain sustainable competitive advantages. This study intends to contribute to industry practices and future research. The correlation of project procurement management success, smart contracts, and sustainable competitive advantages are expected to guide feature research and business practices.

PurposeProject management tools and techniques have been widely adopted in the construction industry; however, its combination with Six Sigma and application in construction procurement has not been widely researched. This paper explores the use of Six Sigma Project Procurement (SSPP) and its potential applications in public sector construction procurement.Design/methodology/approachThe role of Six Sigma and project management in construction is critically evaluated using three case studies to demonstrate their application in public procurement.FindingsThe use of SSPP by public sector organisations creates efficient and effective construction procurement processes by addressing delays. The proposed timelines for competitive tendering in the Ghanaian Public Procurement Manual are not realistic.Research limitations/implicationsThis paper contributes to and broadens the limited body of evidence and knowledge of applying SSPP to public procurement processes and identifies areas for further research.Practical implicationsProject management will continue to expand in the global construction industry. However, what will eventually determine if SSPP is embraced by public sector construction depends on the leadership and success of its execution. The application of SSPP to public construction procurement will address delays and lead to significant time reduction of the process. This will eliminate the major issue (delay) accounting for deficiencies in the process.Originality/valueThe paper yields immense value to construction project management researchers and practitioners, especially in the public sector. It recommends the inclusion of Six Sigma to promote focus on actual instead of perceived problems and advocates for decisions-making based on facts which will ensure continuous improvement.