On the services tenders, Basu said the projects themselves were unviable. This has been proved by the analysis done by former communications secretary, D K Sangal. The projects would end with huge cumulative losses, he predicted. This point was further buttressed by the unwillingness of international and domestic financial institutions to lend to these projects. Basu alleged that now that the government had decided to stick to the tender guidelines on interconnect charges, treatment of the licence as an asset and the formation of holding companies, the basic telecom service licencees were dragging their feet. He also charged connivance of DoT and law ministry officials in delaying the licence and interconnect agreements so that some basic service licencees could wriggle out of their commitments.
Releasing several sets of DoT documents, Basu charged that there were several extraneous issues involved in the whole tendering process. He made references to two tenders that were cleared by Sukh Ram. Quoting from a tender evaluation committee (TEC) report for jelly filled cables (opened in 1994-95), Basu alleged that the TEC's recommendations had been violated by Sukh Ram.
Though the original tendered quantity was for 392 lakh circuit km (ckm) worth some Rs 3,500 crore, DoT decided that only 192 lakh ckm of cables were required. This massive reduction in the tendered quantity was done to favour Advanced Radio Masts (ARM), the Hyderabad-based company in the centre of the telecom scandal, Basu charged.
Since ARM did not have type approval at the time that DoT floated the tender, the quantity was perhaps reduced so that ARM could benefit when the remaining quantity would be tendered for, he said. ARM had set up capacity for jelly filled cables. Also, orders were placed on two companies (Finolex and Sterlite) much in excess of the TEC's recommendations, he said.
In another tender for digital transmission analysers and testing equipment for optical fibre cables, Basu alleged that ARM had again been favoured by DoT. Sukh Ram had cleared the TEC's recommendations on March 8 for the tender and ARM's name did not figure among the five shortlisted companies. A few days later he called the file back and placed 90 per cent of the order on ARM at higher rates, he added. The loss because of this one decision was some Rs 20 crore, he felt.
Basu also complained that on several occasions the former minister had violated the 25 per cent norm followed while placing repeat orders and in some cases the repeat orders were even more than the original orders issued after tenders.