The BSNL board's
decision to put tender for 93 mn GSM lines on hold has created a storm within
the concerned establishments in the government. Equipment order, given to
Ericsson and Huawei, has already been delayed for a year now. Corruption
charges, irregularities, controversies, etc, have been paralyzing BSNL's ability
to clear tenders for equipment procurement over the last three years, further
crippling its ability to register any significant profit. It failed to do so
particularly during the last three years when the mobile market in India
recorded the highest growth globally. It affected the prospects of BSNL's
expansion activities during a high growth time. This has resulted in the company
sliding to #5 from the numero uno position in mobile space in 2006. Bharti
Airtel has assumed the coveted top position pushing BSNL downward, and even Tata
Teleservices is poised to overtake BSNL in mobile customers within the next
couple of months.
On the issue of putting the tender on
hold, BSNL's executives maintain that 'vested interests' are at work behind the
delays to ensure that the PSU loses its prominence in the country's mobile
space. So, whose vested interests are involved? How can these vested interests
play havoc if BSNL is strict on its procedures without compromising on the set
norms? It looks like a blame game to divert attention from the controversy.
BSNL has stated that it is putting the
tender only on hold, but not canceling the tender as suggested by one of the
government representatives in the BSNL board. All court cases on the tender have
gone in its favor and even an 'integrity panel' set up with the permission of
the Central Vigilance Commission (CVC) has cleared BSNL of any wrongdoing in the
past regarding this tender. It further stated that it will wait for the results
of the latest probe by the CVC before placing orders with successful bidders,
Ericsson and Huawei. It's a hope that BSNL emerges out of this controversy with
a clean chit.
The BSNL move to put the tender on hold
comes as the CVC launched a fresh probe into the BSNL tender. The
anti-corruption body's guidelines forbid post tender negotiations with
successful bidders as this gives opportunities for corruption. Equipment vendor,
Ericsson, had emerged as the lowest bidder in the North and Southeast zones
while China's Huawei was selected for the South and West zones. The DoT too had
earlier asked BSNL not to renegotiate the price with its lowest bidder,
Ericsson, since the move would violate the CVC guidelines. But BSNL executives
say that it had entered into post tender negotiations with Ericsson since this
could result in a 20-25% reduction in the price, amounting to a minimum $1 bn
saving for the company.
But, is this a genuine reason for
renegotiation or any ulterior motives were behind this? Did BSNL at least
consult the DoT on this renegotiation when the latter had already asked the
former not to renegotiate? Hope all these questions will be answered in the
probe launched by the CVC and in the PMO meeting on January 6, 2010. This is the
second major setback for the government after the CBI, under CVC directives,
raided DoT offices for alleged irregularities in the allocation of spectrum and
licenses to eight firms in January 2008. All this doesn't augur good for the
government's telecom revenue. Linked to this Rs 36,000 crore tender is an $1 bn
IT outsourcing contract with IT firm, HCL Infosystems. This delay in the
equipment tender will impact this outsourcing contract too.
The latest controversy of irregularities
and CVC's seizing of documents to probe any such irregularities have cast shadow
once again on BSNL's integrity. If the government doesn't come out quickly with
its findings and if BSNL is found guilty of any violations, it might be a
beginning of BSNL becoming a sick company from once being the industry's top
leader. It would become prey to private sector takeover. And already our
government is well known for red tapism among the foreign equipment/technology
vendors. Such probes on irregularities further delay the tender execution,
hence, deteriorating not only BSNL's image, but also our government's as a
whole, losing revenue opportunities.
Kannan K
kannan@cybermedia.co.in
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