The World Bank is understood to have allowed its five-year multi-million dollar contract with Satyam Computer Services, India’s fourth largest IT services provider, to lapse. The contract was awarded to Satyam in 2003, and was due for a renewal last month.
Spokespersons from both the Bank and Satyam refused to comment or deny this development.
A Satyam spokesperson said: “As a matter of company policy, and with due respect to client confidentiality, we do not comment on specific clients and status of individual client assignments.”
Responding to an email from Business Standard, World Bank’s director Sunil Kumar in Chennai (which is the nodal centre for the bank’s IT operations in India) wrote: “As a matter of business practice, we do not publicly discuss our contractual arrangements with vendors, as this information is considered to be confidential.”
It is not known if the contract has been awarded to another IT services provider. A World Bank official in Delhi, however, said that appointment of a new vendor by the bank is public domain information and would be released to the media as and when it happens.
The reason for not renewing the deal with Satyam is not clear. Some two years back, a case of “conflict of interest” was reported by the US media when a (then) retired employee had invested in Satyam Computers while he was on the rolls of the Bank.
World Bank’s policies do not permit its employees to invest in business that benefit directly from its operations.
It could not be established if this lapse had anything to do with this “conflict of interest” case.
While the size of the original contract is not available, it is understood that it came with an immense ‘goodwill value’ and Satyam had in 2003 won the contract against great odds. Several other global IT services providers had bid for the contract which had finally gone in favour of the Hyderabad-based company.
The original contract awarded to Satyam entailed delivering solutions like ERP, Java, .NET, Notes/Domino, Document Management and Messaging. A senior Satyam executive at the time of bagging the contract in 2003 had said, “This is a very prestigious contract and we are delighted to work with the World Bank. Before that Satyam had supported the media design of the World Bank intranet, which was ranked as one of the world’s 10 best intranet sites.
