BEL failed to execute MTNL project: CAG

In its report tabled in the Parliament today, the Comptroller and Auditor General (CAG) said BEL also "failed to ensure performance by its partner IBM inspite of its commitment" to the project.

"The company failed to execute a prestigious and important project of MTNL even after five years of its scheduled date of completion which resulted in blocking of Rs 144.85 crore for more than four years," the report said.

MTNL had floated a tender in 2004 for implementation of Convergent Billing System and Customer Relationship Management(CRM) project.

BEL had tied up with IBM for the project as the latter had an expertise in system integration in CRM projects.

CAG said the order worth Rs 503 crore was placed by MTNL with BEL in February 2006 for executing the project in 12 months from the date of order.

The government auditor noted that though BEL had informed that IBM can do the task of System Integrator satisfactorily, IBM was "not willing" to take the responsibility and the task had to be given to some other firm.

CAG also rejected BEL's reply that MTNL launched many new services and expected the company to deliver all of them as part of the convergent billing.

"BEL should have taken adequate financial safeguards while accepting a project with open-ended scope for expansion and fixed delivery period.

"In absence of expertise in field of system integration, BEL should have protected its interest by fixing the responsibility on IBM for execution of the contract in full," it said.