Now MTNL does a switch8217;

New Delhi, Oct 21: The last time this paper reported it on August 4, it was the Department of Telecom Services that was playing games, enc...

New Delhi, Oct 21: The last time this paper reported it on August 4, it was the Department of Telecom Services that was playing games, encouraging suppliers to form cartels, to jack up prices of equipment being supplied to it. This time, it8217;s the MTNL that8217;s doing this.

In July, MTNL got a quote of around Rs 3,400 per switch for its tender of 5 lakh lines. But before it finally placed the order, the Department of Telecom received a bid price of Rs 1,990 for the same switches 8212; prices of switches have been falling dramatically over the past year.

So, MTNL wrote a letter to the firms that had bid for the tender 8212; Siemens, HTL, Ericcson and Lucent 8212; offering them a lower price of Rs 2,045 per switch this was based on DoT8217;s base price, which was adjusted for some modifications in MTNL8217;s requirements. The four top bidders L1 to L4, in jargon, however, refused to supply the switches at this price. The next two bidders L5 and L6 8212; Alactel and ITI-Alcatel 8212; then wrote a letter to MTNL offering to supply the switches at this price.

For reasons best known to MTNL, however, the public sector unit decided to sit on the offer. So, about six weeks after the offer was first made, Lucent wrote back to cancel it.

Following this, a price negotiating committee was set up to decide on a final price though, curiously, this did not include MTNL8217;s technical director Gaiha who had been opposing the higher price. Right now, the price being talked of in the negotiating committe is around Rs 2600, or Rs 555 above that Lucent was willing to supply at.

While this adds up to around Rs 28 crore extra, this is not the first time that such games have been played in the ministry of telecom. In response to this newspaper8217;s expose on August 4, for instance, the Prime Minister8217;s Office intervened, and forced the Department of Telecom Services to change its rules in order to break the possible cartel 8212; this move resulted in a possible saving of Rs 300 crore in the tender.