Govt likely to forfeit earnest money of Sterlite

Govt likely to forfeit earnest money of Sterlite
PTI & EEB

NEW DELHI/MUMBAI, AUG 29: The Government is likely to take stern action against Sterlite by way of forfeiting the earnest money of Rs one crore on account of the controversial 200 mm jelly-filled cable tender floated by the telecom department.

"The government is looking at forfeiting the money of Sterlite totalling about Rs one crore and is considering going for retendering process," Shyamal Ghosh, secretary of Department of Telecom (DoT) told PTI here.

He, however, said that the company would not be penalised on other 36 category of telecom items tendered on account of the jelly-filled tender.

Ghosh further said Koshika Telecom's plea for extending the deadline for payment of arrears to migrate from licensee fee to revenue-sharing regime was currently under government's consideration. "No decision to this effect has yet been taken," he said.

EEB adds: According to Sterlite Industries, which has bid for supplying jelly-filled cables to the Department of Telecom, it inadvertently got its bid figure wrong by a whopping 79 per cent! That's right, according to a petition which was examined by Minister of State for Communication, Tapan Sikdar, Sterlite quoted a bid price of Rs 1,64,193 per kilometre for 200pr 0.5 mm a cable on March 30, but later realised that this should be higher, and sent a corrigendum (after the submission) to revise this to Rs 2,94,193.

While this revision was rejected by the DoT, several bureaucrats feel that Sterlite should be held to its original bid, and be given the contract -- as per the rules, Sterlite will get 30 per cent of the contract for 400 lakh cable kilometres, and other firms will be given the balance, but they will have to supply these at Sterlite's prices.

Sikdar, however, has asked the ministry to review the case all over again, to penalise Sterlite for its error, but consider its bid as `non-response', and assume that the next-lowest bidder be considered as the lowest bidder. Problem is that if this is done, the extra payment that the DoT will have to make on the cables they are ordering will be a whopping Rs 183 crore. Sikdar's argument is that if Sterlite is forced to fulfill its bid, it will fail to do so, as will the other firms, for the simple reason that the bid is totally uneconomic.