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HC stops BSNL's tender award for Nokia, Ericsson

BSNL cited technical and financial reasons for disqualifying Motorola in the race, reports M Rajendran.

india Updated: Nov 02, 2006 20:37 IST

The Delhi High Court on Thursday restrained the government and state-owned Bharat Sanchar Nigam Ltd (BSNL) from going ahead with its award of a Rs 20,000-crore GSM network equipment tender to European giants Ericsson and Nokia until November 16, after US-based rival Motorola cried foul.

BSNL cited technical and financial reasons for disqualifying Motorola in the race.

The court set November 16 as the next date for hearing in the case filed by Motorola, which is expected to file its reply to BSNL's response in court. The award involved the setting up of GSM (global system for mobile communications) networks for 45.5 million lines.

Last month, Motorola had approached the court challenging its disqualification in the last leg of the tender. A two-member bench headed by acting Chief Justice Vijender Jain and Judge Kailash Gambhir asked Motorola's lawyers to submit their reply before the next hearing.

A Motorola spokesman offered no comment on the court order, saying the matter was "sub-judice"-- a rule that bars statements that could be seen as influencing the court's decision.

Motorola has appointed leading lawyers Abhishek Manu Sanghvi, Mukul Rohatgi and AS Chandhiok to plead its case. Additional Solicitor-General Gopal Subramaniam appeared on behalf of BSNL.

Rohtagi told Hindustan Times, "The Bench on Thursday has suggested to the government that it may not award the tender till the next date of hearing."

BSNL, in its response, said its decision was based on the recommendations of a seven-member committee for evaluation of tender (CET) with two of the members the state-owned research body, the Centre for Development of Telematics (C-DoT) and the Indian Institute of Technology (IIT) who evaluated the bids on technical grounds.

"CET had come to a conclusion that the petitioner (Motorola) does not fulfill all the necessary techno-commercial standards prescribed by the tender document. It had failed to meet the eligibility criteria laid down in the tender document," BSNL said in its reply.

BSNL said Motorola's experience in supplying the critical network switching sub-systems (NSS) was limited to 3.2 million, while the tender prescribed a minimum of 20 million. Similarly, its experience in third generation (3G) networks was limited to one lakh subscribers, while the eligibility criteria for the tender specified 50 lakh subscribers, it said.

On financial strength, BSNL pointed out that tender conditions stipulated that a bidder should be a profit-making company with a minimum turnover of Rs 8,000 crore in the last two years (2003-04 and 2004-05), while Motorola India Private Ltd, the US giant's Indian subsidiary, was not a profit-making company in 2004-05.

First Published: Nov 02, 2006 20:37 IST