CHENNAI: After facing criticism over the high cost of bicycles proposed for Class 12 students, the State government has renegotiated the procurement price with the lowest bidder, Hero Cycles Ltd, reducing the overall cost by Rs 116.12 crore.

The company's initial bid of Rs 392.32 crore was reduced to Rs 276.20 crore, a cut of nearly 30 per cent, following nine rounds of negotiations held between October 26 and November 12. The initial quotation had exceeded the government's administrative sanction for the procurement.

According to the minutes of the Purchase Committee meeting of the Directorate of Backward Classes Welfare, Hero Cycles lowered its price by Rs 1,975.10 per boys' bicycle set and Rs 2,346.60 per girls' set. The committee eventually settled on Rs 5,260 per set for boys and Rs 5,130 for girls, inclusive of GST, and found the revised rates reasonable and within the sanctioned budget. It accepted the company's final offer on November 12.

The procurement covers over 5.32 lakh modern bicycles for the current academic year, including 2.37 lakh for boys and 2.95 lakh for girls. Each set also includes a helmet and a water bottle.

Three companies — Hero Cycles Ltd, Avon Cycles and S K Bikes — participated in the tender and cleared the technical evaluation. Following the opening of price bids on October 22, Hero Cycles emerged as the lowest bidder in both categories.

The committee has authorised the Director of Backward Classes Welfare to issue the Letter of Acceptance. However, purchase orders will be placed only after the company submits the security deposit, executes the agreement and secures approval for the revised helmet and water bottle samples.