PMO wants explanation from DoT

The Prime Minister's Office (PMO) has sought an explanation from the department of telecommu-nications on numerous allegations that have come to its notice regarding BSNL's 62 million GSM line tender.

The PMO has pointed out that there are allegations that specifications of the tender have been changed repeatedly in order to protect the interests of some foreign players. There are other allegations that several informal instructions have been issued to BSNL by ministry officials on the tender.

The letter, written to the DoT secretary on September 22, also says, "There are apprehensions that the tender might be finalised in a not very transparent manner."

The PMO has also questioned the DoT on the ITI-Alcatel technology agreement on the grounds that it will be loss-making for ITI but clearly beneficial to Alcatel.

In 2004, ITI had entered into an agreement with Alcatel for transferring technology for the manufacture of GSM equipment.

The terms of the agreement involve payment of royalty to Alcatel but, more importantly, procurement of proprietary equipment from the same firm. The third-party procurement also involved selection of vendors by, or in consultation with, Alcatel.

"The entire exercise of manufacture of equipment in the ITI plants is being shown as one of ITI's revival, but only a small portion of the workforce in these two plants (in Rae Bareli and Mankapur) is being utilised. ITI has reportedly incurred a loss due to this exercise," the PMO letter says.

The PMO has also pointed out that there are allegations that Alcatel got orders on the strength of its tie-up with ITI.

For the 18 million lines ITI-Alcatel will get in the proposed BSNL contract, the order could be in the range of Rs 5,000 crore, of which Alcatel's share would be "Rs 2,000 crore without even participating in the tender".

This is because about 30 per cent of all contracts given by BSNL are reserved for the ITI-Alcatel combine. The letter also questions the DoT about showing courtesies to the chairman of Alcatel which was much "above that of a head of a private firm".