Usha Group Firm Moves Court Against Dot Move
Usha groups Techno Telecom yesterday filed a stay petition in the Delhi High Court against a move by the department of telecommunications (DoT) to encash the bank guarantees for its bid for provision of basic services in Bihar.
Essar Commvision the letter of intent (LoI) holder for Punjab whose bank guarantee DoT had sought to encash did not move courts yesterday. The company is expected to do so today or tomorrow. The bank guarantees were provided by the companies for the right to bid in the circles.
DoT had issued letters to banks which had provided guarantees to the companies on Tuesday. ABN AMRO bank had provided a guarantee for Rs 25 crore to Essar Commvision and Bank of Tokyo the Rs 5 crore guarantee for Techno Telecom.
The department had surprised the telecom industry by seeking to attach the bank guarantees of the companies. DoT officials said the move was initiated after the erring companies did not produce financial and performance guarantees within the stipulated period of one month after accepting the LoI. This was despite several reminders sent to them, a DoT official said.
Company executives contest this claim. The one-month period mentioned in the tender documents, they say, is effective from the date of signing the licence agreement. Here we have only an LoI, not the agreement, one senior executive said. Financial guarantees covers licence levies, access charges and royalties, administration charges and research & development cess. Performance guarantees are to ensure that the companies stick to their roll-out plans and stick to quality of service parameters.
The two companies had requested DoT to give them some more time to produce the guarantees. In fact, Techno Telecom had even furnished in part its financial and performance guarantees. Since the size of the financial commitments like licence fees were large, companies found it difficult to arrange the guarantees.
Meanwhile, according to unconfirmed reports, communications minister Beni Prasad Verma took the decision to encash the guarantees despite advice from the telecom commission against it.