Corporate rivalry affecting govt decision-making, says Raja

A fresh or snap tender from BSNL for an estimated Rs36,000-crore GSM mobile equipment contract could still be challenged by corporate rivals, telecom minister A Raja has said in a letter to the PM

Apparently peeved by the vigilance authorities' direction for a fresh or snap tender to procure equipment for state-run Bharat Sanchar Nigam Ltd (BSNL), the telecom ministry has complained to prime minister Manmohan Singh that corporate rivalries were affecting the government's decision-making, reports PTI.

Pointing out that a fresh or snap tender for an estimated Rs36,000-crore GSM mobile equipment contract could still be challenged by corporate rivals, telecom minister A Raja brought to Dr Singh's notice various developments that have delayed the telecom company's expansion for nearly two years.

BSNL had invited bids to add 93 million GSM lines about two years ago and one of the leading vendors Nokia-Siemens Network (NSN) was disqualified on technical issues, and since then, the state-run company has not been able to place the orders due to various reasons including legal battles.

Swedish vendor Ericsson was the lowest bidder for the Northern and Eastern regions, while China's Huawei was selected for the Southern zone. NSN had challenged the disqualification in two High Courts which had upheld BSNL's decision.

"In this regard, you will appreciate the trend where corporate rivalries are buffering government decision-making," Mr Raja said in his letter to the PM.

The minister said that BSNL needs these lines urgently in view of its rapidly-declining market share and said that its inadequate capacity to add mobile subscribers may lead to further deterioration in its market share.

It has been more than 20 months since BSNL is trying to put in place the procurement order, Mr Raja said in his letter, adding that “it appears that the CVC observations mainly pertain to the rejection of NSN, which has been examined in detail and upheld by two High Courts earlier”.

Earlier, Department of Telecom (DoT) joint secretary JS Deepak, who is on BSNL's board as the government nominee, had questioned the single bid brought out by BSNL and the lack of comparative analysis on the basis of total cost to the company.

To this observation, BSNL had maintained that at the time of inviting bids, many vendors were in the fray and their bids had been scrutinised, but in the end only one vendor emerged as the lowest bidder in the respective zones. The process cannot be categorised as a single bid, BSNL officials said.

Cancellation or any delay in the contract could hit BSNL hard at a time when the government is thinking of disinvestment, a senior official said on condition of anonymity, adding that in such an eventuality, only corporate rivals could be benefited.

BSNL's capacity to add more mobile subscribers is diminishing in most of the centres at a time when private players are adding 15 million-17 million new users every month.

Further delay in execution of the project would affect BSNL both in terms of market share as well as revenues.

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