The ministers decision means that the plans of Basic Teleservices Ltd, to provide basic telecom services in Tamil Nadu have been virtually scuttled. Of the six successful bidder companies, the RPG-led consortium was the only one not to accept the department of telecommunications LoI.
At a press conference here yesterday, Verma reiterated that DoT would not grant companies who had not accepted the LoI any further extension of the deadline. The minister had served an ultimatum on six succesful bidders to accept the LoIs by October 18 or face legal action.
Verma told the Business Standard that the companies had been given enough time to sign (the agreements) and now DoT would initiate legal action against those (companies) which had not complied with the deadline. When asked whether legal action meant encashing the companys bank guarantees, the minister said this was yet to be decided.
The five companies which have given their acceptance of LoIs are: Tata Teleservices for Andhra Pradesh, Hughes Ispat (Maharashtra), Essar Commvision (Punjab), Reliance Telecom (Gujarat) and Techno Telecom (Bihar). These companies are now liable to pay 21 per cent interest on delay in payment of licence fee, the minister said.
RPG officials handling its telecom ventures could not be contacted yesterday. But industry sources felt that the company would initiate legal action if DoT tried to encash its Rs 25-crore bank guarantee for the Tamil Nadu circle.
Five companies had complied with the deadline with a token acceptance of the LoIs, though only one of them were willing to sign the licence and interconnection agreements. Basic Teleservices, which had won the Tamil Nadu circle with a Rs 11,000-crore bid, listed contentious issues in thelicence and interconnect agreements.
It was willing to sign the agreements if the issues were resolved. This was the startegy followed by two other companies, Essar Commvision and Tata Teleservices. However, the Essar company changed its stance and put in a letter on October 22 saying that it had accepted its LoI. It separately listed the issues which needed to be resolved.
The RPG firm was also working on these lines and was holding discussions with its Japanese consortium partner, Nippon Telephone and Telegraph. According to an unconfirmed report, it had asked DoT for some time to put in acceptance of the LoI.
On the procurement process in DoT, the communications minister claimed that the value of the fresh tenders for supply of optical fibre cables were substantially lower than the ad-hoc orders placed by the earlier government. He had cancelled earlier orders worth several crores of ruppes and ordered floating of fresh tenders for the supply of the cables.
He said the prices quoted in the tenders opened last week were 30 per cent less and those opened yesterday were 45 per cent less compared with the ad hoc orders issued by DoT under Sukh Ram.