The Hindu Business Line : Raja wants BSNL tender reviewed; ‘rates too high’

The Union Minister for Communications and Information Technology, Mr A. Raja, on Saturday made it clear that he would not allow BSNL to purchase 45.5 million cellular lines at the rates quoted by the lowest bidder. The rates were too high, he told The Hindu.

“If BSNL goes ahead with the tender in the current form and award L-1 (lowest tender) the APO (advance purchase order) we will be paying close to Rs. 10,000 crore more unnecessarily,” he said when asked why he had refused to clear the file aimed at making available, in the near future, a large number of lines.

Comparison of prices

Asked whether a fresh tendering process would not mean a delay of more than six months, the Minister responded: “MTNL gets 2G and 3G equipment from a company for Rs. 2845 per line (dollar exchange at Rs.41). The L-1 in the BSNL case has quoted Rs. 4940. Multiply that by 45.5 million and you will know what I am speaking of. Where is the comparison of prices? How can I let this deal through?” (Dayanidhi Maran was the Union Minister for Communications and Information Technology when the BSNL tender was finalised.)

A delay was unavoidable in these circumstances, Mr. Raja said, adding that it was important to correct mistakes at any stage even if it held up development. But he was sure that there would be no serious breach of timelines that had been drawn up to increase the telephone density in the country. Financial re-bidding would start soon, and discussions would be held with all the five bidders to finalise technical specifications.

The story dates back to March 2006, when BSNL floated a tender for additional lines to substantially augment capacity across the country. Five big firms — Ericsson, Motorola, Nokia, Siemens and ZTE — participated. But since the five could not fulfil all the technical specifications indicated in the original tender document, BSNL sought clarifications and also held discussions on the specifications with the bidders. According to Mr. Raja, some of the tender specifications were changed, resulting in the technical disqualification of Motorola and ZTE. “It is surprising that Motorola, one of the leaders in the world in telecommunication equipment and a firm that supplies 2G and 3G equipment to MTNL, could not qualify technically,” he said.

Mr. Raja sent a note to BSNL asking them not to issue the advance purchase order at the current rate since this was not fair. He also advised BSNL to renegotiate with the lowest bidder and “restrict the APO to the minimum possible quantity and then go in for a fresh tender.”

Ball in BSNL court

The ball is now in BSNL’s court. Its board is scheduled to meet to take a decision on the issue. The Minister gave BSNL one more instruction: “If the BSNL decides to go ahead with the existing tender, it may consider restricting it to only to 2G as the (Union) Government is yet to finalise its 3G policy.”

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