CAG hauls up govt for letting off pvt basic cos missing rural phone targets

The Comptroller and Auditor General (CAG) has hauled up the Department of Telecommunications (DoT) and its service arm Bharat Sanchar Nigam ...

The Comptroller and Auditor General (CAG) has hauled up the Department of Telecommunications (DoT) and its service arm Bharat Sanchar Nigam Ltd for allowing a benefit of Rs 812 crore to the private sector basic service operators for their failure to install village public telephones (VPTs). A loss of Rs 720 crore resulted because despite failure to meet commitments, licenses of these companies were not revoked instead they were let off with just minor liquidated damages. What’s more, BSNL spent Rs 93 crore setting up rural phones which were the obligation of these operators.

The Comptroller and Auditor General has also stated that if the public sector BSNL was asked to meet the shortfall of rural phones, it would have to spend an additional Rs 600 crore as capital investment and an additional Rs 330 crore as operating expenses every year.

The CAG has stated that as of March 2002, of the 98,000 village public telephones committed by private operators, a mere 846 were put up by them.

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The report states that the license agreement with private operators stipulated that basic telecom service operators were to provide a minimum of 10 per cent of their total commitment as VPTs. It was on the basis of this that they won the bid for that circle.

The Comptroller and Auditor General report states that the liquidated damages would be calculated at the rate of Rs 66 per day of delay multiplied by the the number of days of delay and village public telephones not delivered.

But a maximum of Rs 6.5 crore was set as the cap for the LDs which left a loophole for all private companies to escape from.

In fact, the CAG has stated, the entire 846 VPTs set up by private operators costed them a total of Rs 6.77 crore. The CAG report states that the original National Telecom Policy (NTP) of 1994 had sought to cover all villages by 1997. The NTP 1999 postponed this to 2002. As things stand today, these companies are way off target even today and a convenient Rs 6.5 crore fine is hardly likely to push them to meet their targets.