High Court extends stay till Feb 12

Our Bureau

New DelhiFeb. 1In a bid to salvage its cellular roll out plans, the state-owned Bharat Sanchar Nigam Ltd (BSNL) on Thursday offered an interim formula to Motorola, whereby it sought to award 40 per cent of the 45.5-million line contract. The suggestion was made by BSNL in the Delhi High Court but was not accepted by Motorola.

The High Court has extended the stay on the mega GSM project until February 12. This would further hurt the state-owned company's plans to ramp up its network, which is already running at almost full capacity.

The suggestion to clear 40 per cent of the total contract was made by the Additional Solicitor General, Mr Gopal Subramanium, appearing for BSNL. Mr Subramanium contended that as per the term of the contract 60 per cent of the project would go to the first lowest bidder and rest 40 would go to the second lowest bidder.

Even if Motorola wins the case, it would get only a maximum of 60 per cent of the contract, therefore, the balance should be cleared for awarding of contract, said the BSNL lawyer. That way it would have been able to move ahead with its expansion plans. Motorola's lawyers did not accept this.

The US-based Motorola had challenged its disqualification from the bidding process for supply of equipment to BSNL. While BSNL said that the US firm was disqualified on technical grounds, Motorola said that it was an unfair move. Ericsson and Nokia had emerged as the two lowest bidders when BSNL opened the bids in October 2006. The case has pulled back the company's plans by almost four months, which could be crucial with operators adding more than five million new users every month.

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(This article was published in the Business Line print edition dated February 2, 2007)
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