Govt to continue with quota for ITI

ITI had failed to transform itself into a company to keep up with the latest developments in telecom sector

The government today approved the continuation of reservation quota policy for the Indian Telephone Industries Ltd (ITI) in procurement and network rollout orders by the BSNL and MTNL, a move seen as helping the PSU firm survive in the competitive telecom manufacturing business.

The Cabinet Committee on Economic Affairs has approved the proposal of the Department of Telecommunications regarding continuation of reservation quota for ITI Ltd, an official statement said.

The reservation policy will remain in force for one year with effect from September 21, 2013 and it should be again reviewed after the expiry of this period.

"To continue the reservation quota policy for ITI by reserving 30 per cent of procurement orders placed by BSNL and MTNL for ITI Ltd, for products manufactured by ITI and 20 per cent of the network rollout orders for their turnkey projects (like GSM network roll-out) of BSNL and MTNL," the statement said.

It said ITI would accept orders under the reservation quota only after the price is known and it is commercially viable and shall exercise its option under the reservation quota within 15 days of the opening of bid.

The statement said BSNL/MTNL will give 10 per cent advance against the orders placed on ITI, subject to liquidation of advances outstanding against prev-ious projects awarded to ITI by the state-run telecom companies.

The government, however, said BSNL and MTNL should have to follow public procurement rules for central public sector enterprises (CPSEs) once they are framed.

The Government has introduced the Public Procurement Bill 2012 in Parliament, and under the provisions, procuring entities, including CPSEs, would have to frame rules for public procurement of goods, work and services.

"Once such public procurement rules for CPSEs are framed after the enactment of the Public Procurement Act, these would also be applicable to CPSEs under the administrative control of the DoT," the statement added.