BSNL contract stuck between security and rule
Caught between security concerns and transparency issues, the fate of state-owned Bharat Sanchar Nigam Ltd’s (BSNL) tender for procuring equipment and installing 93 million mobile telephone lines — and through it the company’s growth — has turned static. Manoj Gairola examines...india Updated: Nov 19, 2009 01:21 IST
Caught between security concerns and transparency issues, the fate of state-owned Bharat Sanchar Nigam Ltd’s (BSNL) tender for procuring equipment and installing 93 million mobile telephone lines — and through it the company’s growth — has turned static.
Of the five bidders to this Rs 40,000 crore, May 2008 tender, Nokia-Siemens, ZTE and Alcatel Lucent were disqualified on technical grounds, leaving Ericsson and Huawei in the field.
But two months ago, the Home ministry raised objections to installing Chinese equipment in border states on the basis of a report by intelligence agencies. That ended Huawei’s prospects in north, west and east zones, leaving Ericsson as the sole north and east zone bidder and no bidder in the west.
“There is no competition in any zone and no bidder in the West zone,” an October 23 Department of Telecommuni-cations (DoT) letter to BSNL stated. “Under these circumstances even though the equipment costs are coming down, negotiations with single bidder may result in finalisation of tender at higher rates. Besides negotiations with single bidder will lack transparency in decision making.”
In its reply, the company has written to DoT that the security alert came after the bids were submitted, a senior BSNL official told Hindustan Times.
When Ericsson submitted bids, it did not know that BSNL would not be allowed to procure Huawei equipment in North and East zones. Hence, it cannot be considered as a single bid, he added.
These security-related objections, however, do not apply to private telecom operators that have employed Chinese equipment on border states. BSNL has demanded a level playing field vis-à-vis private operator.
In a September 2009 meeting, the company officials told DoT that if it is not allowed to procure Chinese equipment for its GSM mobile services, the same guidelines should apply to private telecom service providers as well, said an official who is not allowed to speak to media.
In a letter to DoT, BSNL has also said that its growth would be affected if it is not allowed to place orders through this tender.
Last week, the Prime Minister’s Office informed the BSNL that it would review the company’s performance in view of falling revenues.