Essar Comm Contests Dot Move To Encash Bank Guarantees
Essar Commvision, the letter of intent holder for provision of basic telecom services in Punjab, yesterday challenged in the Delhi High Court, a move by the department of telecommunications to encash its bank guarantees.
The court has scheduled the first hearing of the case for today. The hearing of a stay plea filed by Usha groups Techno Telecom is also on the list of hearings slated for the day.
DoT had sought to encash bank guarantees of the two companies on Tuesday. The Essar company had provided a bank guarantee of Rs 25 crore for the Punjab circle and Techno Tele-com Rs 5 crore for Bihar.
The decision to encash the bank guarantees was taken because the companies had not furnished financial and performance guarantees after accepting the letters of intent (LoI). RPG-led Basic Teleservices has already challenged a DoT move to encash its guarantees for Tamil Nadu, the hearing for which, incidentally, is also scheduled for today.
The basic service tender of 1995 detailed that companies should put in the guarantees within a month of signing the licence. Three other firms Reliance Telecom, Hughes Ipsat and Tata Teleservices had provided the guarantees after accepting the letters of intent.
Financial guarantees cover licence levies, access charges and royalties, administration charges and research and development cess. And, the performance guarantee are to ensure that the companies stick to their roll-out plans and stick to quality of service parameters.