Cabinet approves procurement quota for ITI

The Cabinet Committee on Economic Affairs today approved the proposal regarding continuation of reservation quota for loss making public sector firm ITI Limited in procurements made by state-run telecom firms.
"The Cabinet Committee on Economic Affairs...Has approved the proposal of Department of Telecommunications regarding continuation of reservation quota for ITI Limited in procurements made by BSNL, MTNL and Bharat Broadband Network Limited (BBNL," an official statement said.
CCEA in its meeting held in January, 2014 had extended the benefit of 30 per cent reservation quota for ITI for a period of one year which expired September 20, 2014.
The decision reserves 30 per cent of the procurement orders placed by BSNL, MTNL and BBNL for ITI Ltd for the products manufactured by it and for those outsourced items in which there is a minimum 5 per cent value addition by ITI during 2016-17 and 8% value addition in 2017-18.

ITI will get 20 per cent quota in orders for the turn key projects (like GSM network roll-out etc of BSNL & MTNL and National Optical Fibres Network roll-out, etc of BBNL).
ITI would accept orders under reservation quota only after the price is known and if the same is commercially viable, the statement said.

ITI will have to exercise its option under Reservation Quota within 15 days of bid opening.
This policy measures will remain in force for a period of two years with effect from the date of approval of CCEA and shall again be reviewed considering the financial health of ITI after the expiry of this period.

The Government has introduced Public Bill 2012 in Parliament, and under the provisions thereof, procuring entities, including CPSEs, would have to frame Rules for Public Procurement of Goods, Works and Services.
"Once such Public Procurement Rules for CPSEs are framed after the enactment of Public Procurement Act., the same would also be applicable to CPSEs under the administrative control of the Department of Telecommunications," the statement said.
"In today's highly competitive environment, it will be very difficult for ITI to survive on its own without the benefit of reservation quota which BSNL/MTNL has been extending for ITI for the last many years. Provision of reservation quota from BBNL will provide further boost to the order book of ITI and help in improving its financial health," the statement said.