BSNL's Rs 35k cr expansion hits rough patch

A big controversy on procurement of Rs 35,000 crore worth equipment by telecom behemoth BSNL is brewing with position taken by the two government nominees on the Board, threatening mega expansion programme of the PSU.

While the major equipment supplier Ericsson has lowered its price substantially after negotiations for the GSM expansion contract, the two government nominees-- joint secretary J S Deepak and a senior DoT official P K Mittal-- have raised some proprietary issues concerning the tender that was cleared early 2009.

When contacted BSNL CMD declined to get into the matter raised by the government nominees but told PTI that "The Board will look into all the issues and take appropriate decision".

Cancellation or any delay in the contract could hit hard BSNL at a time when government is thinking of disinvestment, a senior official said on condition of anonymity adding that in such an eventuality only corporate rivals could be benefitted.

A note given by DoT Joint Secretary J S Deepak has raised questions on the process followed by BSNL in evaluating the tender and is against the CVC guidelines.

"It was a single bid throughout the country... And BSNL has not done a comparative analysis on the basis of total cost to the company," the note by Deepak said.

When contacted, he said "this was a comment to BSNL as a Board member and government nominee" adding that a similar note was also submitted by another nominee P K Mittal.

BSNL officials said some vested interest do not want this tender to go through.

Asked whether some DoT officials are interfering into the tender business of the PSU, the officials declined to comment but said that someone is working so that it (93 million GSM lines tender) does not go through.

According to sources, Ericsson, who was the lowest bidder for the Northern and Eastern region, has lowered the price to a level seen in the last tender and this was the desired level.

The note by Deepak, the government nominee, has said that the 93 million tender should be reconsidered indicating that it could either be scrapped or the size of the tender could be reduced.

BSNL has been losing the market share to private sector due to its inability in timely adding the capacity and executing projects in view of government hurdles.

On the issue that there was only one bidder throughout the country, Ericsson in the North and East and Huawei in South, BSNL CMD had said that at the time of inviting bids there were other players too.

It was only after the technical evaluation that the single bidder remained in the fray.

Earlier, BSNL had put on hold the Advance Purchase Order (APO) to Huawei saying conditional acceptance of orders cannot be entertained by the PSU.