Friday, August 28, 2009

BSNL's Nokia tender disqualification upheld M-9426201999
NEW DELHI: BSNL has overcome two major challenges in its attempt to award the world’s largest telecom contract, clearing the way for it to open price negotiations with the two companies it has shortlisted for the deal.

An ‘integrity panel’ set up with the permission of the country’s top anti-corruption body, the Central Vigilance Commission, has endorsed the state-run company’s decision to disqualify, on technical grounds, Nokia Siemens Networks from its Rs 35,000-crore tender to supply equipment for 93 million mobile phone connections.

The Andhra Pradesh High Court, too, ruled on Monday that BSNL was justified in disqualifying NSN because it did not meet the technical requirements.

“We are glad both the integrity panel as well as the courts have cleared us of any wrong doing given the fact that there were allegations that we were not transparent with the selection process,” a top BSNL executive said.
BSNL, the executive added, will immediately start price negotiations with China’s Huawei and Swedish company Ericsson. “The only possibility of this tender being further delayed is if NSN were to approach the Supreme Court.”

BSNL has been making huge operating losses in the past two years, only managing to stay in the black because of interest income from its accumulated cash reserves. It ran out of capacity to expand cellular services nearly 18 months ago and no new major contracts for mobile networks and equipment have been awarded in the past 24 months.

NSN said it has obtained the report of the integrity panel — whose members are former chief election commissioners TS Krishnamurthy and BB Tandon — and is “internally reviewing the contents.” A company official added that it has still not received the order of the AP High Court.

The panel was set up after NSN approached the anti-corruption body seeking a probe into its disqualification. It also filed petitions in the Delhi and Chandigarh High Courts as well as the AP High Court. While the Delhi High Court said the case did not fall under its jurisdiction, the Chandigarh High Court asked BSNL to get NSN’s bid evaluated by an independent panel. The AP High Court had in May asked BSNL to put on hold the tendering process until it took a decision.

In May, a year after the tender was floated, Ericsson was short-listed as the lowest bidder for the northern and eastern regions, while Huawei made the cut for the western, eastern and southern zones. NSN has argued before the courts that it was not given proper reasons for its disqualification and claimed all details that BSNL wanted were provided.

On the other hand, BSNL has maintained that all the four companies which were disqualified — NSN, China’s ZTE, Alcatel-Lucent and Nortel — were purely because of technical reasons.

BSNL executives have told ET that they suspect ‘vested interests’ are behind the legal challenges to delay its tender and stymie the state-run company’s expansion. They cited a similar petition in Delhi High Court in 2006 by Motorola, which delayed BSNL’s expansion plans by about a year. Motorola later withdrew the case. BSNL’s last tender in 2006 for about 43 million lines, then the largest, was finally reduced to 13 million lines after telecoms minister A Raja’s intervention.

The umbrella body representing all employee unions of BSNL has asked the telco’s management to act against NSN for delaying BSNL’s expansion plans.

NSN denies any such motive and says it has “long-standing relationship with BSNL” and “look(s) forward to supporting them in the future as well”. M-9426201999

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