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BSNL told to scrap tainted deal

The CVC directs BSNL to either "re-tender" or "snap bid" the contract it awarded to HCL Infosystems, reports M Rajendran.

india Updated: Jan 11, 2007 03:08 IST
M Rajendran
M Rajendran

The Central Vigilance Commission (CVC) has directed Bharat Sanchar Nigam Limited (BSNL) to either "re-tender" or "snap bid" the Rs 591-crore contract it awarded to HCL Infosystems in September last year to set up a communications network for the Indian Air Force. The direction came after a CVC probe concluded that there had been "restriction of fair competition" in the tendering process.

A "snap bid" means calling the same 11 companies who had participated in the earlier bid to submit fresh tenders, without beginning the process from scratch.

That the CVC had begun a probe into the award of this tender was first reported by the Hindustan Times on December 17.

In its letter to DS Mathur, secretary, Department of Telecommunications, and AK Sinha, chairman and MD of BSNL, the CVC has said, "The Commission is of the view that there are adequate prima facie indications of certain tender conditions, having led to restriction of fair competition, compromising transparency and equity to all vendors participating in the tendering process." Mathur and Sinha could not be contacted for comments.

The CVC reached it decision after looking at the total cost of components the successful bidder HCL Infosystems was to buy from Cisco Systems Inc, the well-known network suppliers, as against the total cost of the project.

The tender documents showed that the cost of components obtained from just Cisco would have been 50.2 per cent of the total cost of deliverables — hardware and software included. "This indicates a monopolistic situation... rendering the competition highly restricted," said the letter.

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