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DoT asks Bharti to clear dues in cash

G. Rambabu

NEW DELHI, Sept. 2

THE Bharti group's plans of rolling out fresh telecom services -- national long distance, basic and cellular -- have run into rough weather, with the Department of Telecommunications (DoT) stipulating payment of all pending dues (amounting to over Rs 600 crore with interest) in cash, failing which further licences will not be issued.

According to official sources, the group, which had earlier disputed DoT's decision for withholding its licences (in the Delhi court), had come up with a counter proposal to pay up its dues (on account of its acquisition of JT Mobile) partly in cash, ban k guarantees and corporate guarantees. However, DoT has refused to accept the proposal and is demanding full payment by cash.

Bharti had offered to pay Rs 72.13 crore in cash as undisputed amount. It also offered to settle Rs 218.60 crore being the licence fee for the disputed period as cash or in counter security or bank guarantee. The remaining interest on amount of the disp uted period was promised to be cleared by a corporate guarantee.

However, in an internal note by highly-placed officials in DoT, it has been pointed out that ``since a number of fresh licences are now to be issued to the Bharti group for various services, this is perhaps the last opportunity to recover the outstanding dues without facing protracted and long drawn out litigation''.

The proposal of Bharti for paying only a small amount in cash and thereby enabling them to obtain fresh licences may not be accepted, it has noted.

``It may be mentioned that BGs are accepted only for future payments and not for old dues for which we have been pressing for quite sometime and have committed before various authorities and forums that all efforts would be made to recover these dues. Th e action of DoT, allowing defaulting companies to apply or participate in the bidding process, was criticised in certain forums including the standing committee. It means that no defaulting company should be given any new licence whatsoever,'' the note adds.

It has also been pointed out that the quantum of entry fee and bank guarantee for its fresh telecom services is quite large compared to the outstanding dues on account of JT Mobiles and there is no reason that the company should not clear its dues. In fa ct, as per the department's calculations, Bharti has committed Rs 1,125 crore towards entry fee and Rs 2,160 crore for bank guarantee for obtaining 17 fresh licences.

The Attorney-General, in his opinion, has differed with the DoT's contention. The matter was referred to Mr Sorabjee thrice and he has held the view that ``the stand of the DoT is erroneous and untenable. The decision of the Government, which is tantamo unt to unilateral withdrawal of the NOC, was unjustified''.

With both the A-G and the DoT holding diametrically opposite views, it has now been decided to refer the matter to the Union Cabinet for a final decision. However, sources noted that with the new Communications Minister, Mr Pramod Mahajan, on a two-week trip abroad, it is only likely to come up at the Cabinet meeting next month.