BSNL's new mantra -- buy what you don't need

BSNL's new mantra -- buy what you don't need

New Delhi, Dec 18: Belive it or not, instead of trying its best to set up new lines to meet the emerging private sector competition, the newly-created Bharat Sanchar Nigam Limited (BSNL) continues to sit on a proposal to buy 21 lakh telecom switches for the three months or so that it has been an independent corporation -- the proposal actually has been sitting around since May, when the Department of Telecom Services first bid out for it.

And if this isn't bad enough, thanks to a request from the office of telecom minister Ram Vilas Paswan, BSNL has placed an order for 9 lakh cable kilometres of telecom cables (worth Rs 650 crore) last week even though its own finance department had earlier rejected the proposal saying that BSNL had no need for additional cables right now.

The saga of the 21 lakh telecom switches goes back to May, when Fujitsu dropped out of the 7 bidders who were interested in the project. The project then went into a loop, over the number of bidders who should finally be awarded the tender. While the telecom ministry wanted 5 bidders to be awarded the tender, the Prime Minister's Office asked it to award the bid to only 4 as this would prevent cartelisation (for the detailed argument, see The Indian Express, Aug 13). That was August, but till date the order still hasn't been placed. State minister for telecom Tapan Sikdar has called for the file and said that the tender needs to be re-evaluated -- currently, Lucent is the lowest bidder at Rs 1,989 per switch, Siemens is number two with a price offer of Rs 2,250, and the public sector HTL is third at Rs 2,255.

BSNL has also threatened to scrap a one-and-a-half year old tender for 20,000 WLL telecom lines for the rural sector. While LG Electronics was supposed to be given the order last week, it has now decided that the tender will be merged with an existing one for 6 lakh lines. Interestingly, however, the specifications for the 20,000 line and the 6 lakh line tenders are quite different, so it's not as if merging them makes any economic sense.

Cutting Evergrowth?

The Evergrowth saga, where the telecom ministry is trying to bail out the Bharti Telecom group, appears to be headed for a spot of trouble. Communication Minister Ram Vilas Paswan had referred the matter to the law ministry, but sources say Attorney General Soli Sorabjee is unlikely to give a favourable opinion on the matter, choosing instead to stick to an earlier opinion given by him.

JT Mobiles, whose subsidiary Evergrowth operates the Punjab cellular licence, owes the government Rs 415 crore, but has disputed part of this amount. While the Attorney General had earlier said that JT would have to pay the full amount, Paswan feels that JT shouldn't be asked to pay the full amount -- JT disputes Rs 218 crore of this -- and the licence should be revived subject to a later settlement. The file was sent to the law ministry a couple of months ago.

In addition, JT Mobiles which operated 3 telecom circles, was bought over by Bharti Telecom, which paid the dues of two of its circles and revived the licenses -- Bharti, however, didn't pay the dues for Punjab. Interestingly, though the telecom ministry has insisted that all defaulters pay the dues for all their circles (Koshika, for instance, wants to revive just one of its licences but is being asked to pay the dues for all its circles), it didn't apply the same rule for the Bharti takeover of JT's licences. A decision on asking Bharti to pay Evergrowth's dues is also expected to be taken within the next few weeks.