DoT-ADB controversy takes a new twist

NEW DELHI, Jan 2: The controversy regarding the Department of Telecommunication's (DoT) rejection of the Asian Development Bank (ADB) loan f...

NEW DELHI, Jan 2: The controversy regarding the Department of Telecommunication’s (DoT) rejection of the Asian Development Bank (ADB) loan for a Rs 600 crore project to set up village telephones in eastern Uttar Pradesh has taken a new twist with the public sector Punjab Communications Ltd (PUNCOM) today stating that the DoT’s claim for rejecting their bid on the grounds of lack of "reliability and provenness" is baseless.

According to a statement by PUNCOM managing director A S Gill here today, the company has stated that it had furnished certificates of its provenness along with its bid on the basis of the Chinese PTT (post and telecom authority) from Xinjiang where the company’s systems have been in operation since April, 1996. In fact, Gill has stated that while the DoT had sought a provenness certificate on the basis of six months functioning of the bidders equipment, PUNCOM had furnished the certificate for 11 months during which its equipment had been working in rural China.

The DoT negotiated for a Rs 400 crore loan from the ADB for the UP project, in February, 1993. The department subsequently took nearly four years to finalise the technical specifications for the tender for Wireless in Local Loop (WLL) technology which finally opened in March, 1997. Of the 14 companies which bid for this tender, 12 were multinationals like Ericsson, Harris, Alcatel, NEC, Lucent, Motorola and Qualcomm. The other two companies were Bharat Electronics Ltd (BEL) which is a public sector company under the defence ministry and PUNCOM a Punjab state PSU.

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According to the BEL spokesperson, even BEL had sent all certifications for "reliability and provennness" before the DoT deadline and were surprised when they were disqualified by the DoT on these grounds.

The PUNCOM chief also stated that "the members of the Technical Evaluation Committee (TEC) had wanted to visit the foreign installations where their equipment was working", following which the PUNCOM had extended an invitation to the TEC members in August last year for their visit.

If the DoT, as a firefighting measure, floats a fresh tender for the project, it would push the project behind by at least 18 months to two years. Further, sources say, through the ADB loan, the project was exempt from excise, sales tax and customs and other counterveiling duties, which in the new tender is likely to push up the project cost by at least Rs 300 to Rs 400 crore.

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