The Hindu Business Line : BSNL tender runs into trouble again

Revised contract
Ericsson India to refer tender to its headquarters in Sweden
Swedish company unhappy with new price of $90 per line against the earlier $107
BSNL asking for free bundling of software with equipment

Thomas K. Thomas

New Delhi, July 20 The tender for Bharat Sanchar Nigam Ltd’s cellular expansion plan has run into fresh trouble with the employees union again threatening to go on an indefinite strike.

Adding to the uncertainty is Ericsson India’s decision to leave the fate of the tender to its headquarters in Sweden with BSNL asking for freebies worth Rs 3,000 crore in the revised contract agreement.

New pricing

Sources close to the deal said that Ericsson was unhappy with the revised cost of around $90 per line compared to its quote of $107 per line. As per the revised advanced purchase order, BSNL has asked Ericsson to bundle free software along with the equipment. BSNL has also revised downwards the cost of several elements used in providing value-added services.

However, sources said that Ericsson may start negotiations with BSNL to clarify the new price. Ericsson also has the option to refuse the price offered by BSNL as per the tender conditions. In that event, BSNL may not be able to go for a re-bid as the legal conditions in the tender prohibits the option, which will jeopardise the PSU’s expansion plans.

Ericsson’s global CEO, Mr Carl-Henric Svanberg, said he hoped to soon see the completion of the deal. He was speaking in Stockholm while announcing the company’s second quarter results.

Meanwhile, the BSNL union said that the decision to reduce the contract by 50 per cent was detrimental to the company’s future growth. They also said that the decision to hold back the purchase order for 3G equipment until the policy was finalised was not acceptable.

“We are demanding that BSNL should place the purchase order for all the 45.5 million GSM lines, as envisaged in the tender originally. We are asking the employees to be prepared for indefinite strike,” said Mr V.A.N. Namboodiri, Convenor, BSNL Union’s Joint Forum.

In a related development the Communication and IT Minister, Mr A. Raja, sent a letter to the Prime Minister, Dr Manmohan Singh, explaining the reasons for his intervention in the cellular deal.

“Immediately after my taking over as minister, I received a number of complaints from various quarters, including MPs, alleging that BSNL was going to place an order at a rate much higher than the prevailing rate and the rate at which Motorola is providing to another PSU – MTNL.

“I was left with no option but to ask for clarifications coupled with suggestions to remove the doubts,” Mr Raja said. Following the intervention, BSNL was forced to cut its project size by half.

More Stories on : Telecommunications | Trade & Labour Unions

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