Telecom deal charges against Maran set to snowball


Chennai : The troubles of Dayanidhi Maran have not ended with his forced departure from the union telecommunications and IT ministry. A new storm is brewing in Tamil Nadu over an allegation that he caused the nation a loss of Rs.100 billion in a telecom deal while he was minister.

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The charge was publicly levelled by Maran's successor in the telecommunication ministry, A. Raja, in a media interview last weekend.

Talking of a Bharat Sanchar Nigam Limited (BSNL) capacity-building deal through a tender call in March 2006, Raja said that BSNL agreed to pay Rs.4,940 per line of equipment for 45.5 million GSM lines (2G and 3G equipment).

Raja alleged that Maran when he was minister caused the nation a loss of Rs.100 billion through this deal. MTNL was paying Rs.2,845 per line while BSNL had agreed to give nearly twice the amount to the lowest bidder in an international tender.

If BSNL goes through with awarding the contract, "we (the government of India) will be paying close to Rs.10,000 crore (Rs.100 billion) more unnecessarily," Raja said here.

There were five bidders, two of them – Motorola and ZTE – were disqualified in the second stage of bidding. Motorola has been supplying equipment to MTNL and Raja has expressed unhappiness that it did not qualify for the BSNL order.

Swedish telecom vendor Ericsson emerged the lowest bidder for the BSNL tender, quoting $107 a line. The second lowest bidder was Nokia. Siemens was the fifth bidder. Ericsson has an R&D facility and Nokia a mobile plant in Tamil Nadu.

"What we learn from this is that so long as Dayanidhi Maran was acceptable to Karunanidhi (the chief minister and DMK president), the loss of Rs.10,000 crore to the country was quite alright," Leader of Opposition J. Jayalalitha quipped.

"But once Maran became unacceptable to Karunanidhi, they (the DMK) would be the first to expose the scam," she added.

Calling Raja's allegations against Maran as "shocking", the AIADMK leader said: "The DMK has a lot of explaining to do."

Nevertheless, the upshot of the continuing Maran-DMK spat is that BSNL is likely to offer Ericsson $90 per line.

BSNL has the right to either scale up or trim the order size by up to 50 percent, according to the bid document. It is known that Ericsson is unwilling to lower its call.

To cut costs, the government is now mulling dropping altogether the 3G component of the tender. At present this forms 25 percent of the total 63 million new lines that BSNL plans to provide.

India does not have a specific 3G policy and this part of the capacity building could definitely be re-bid, department sources have said.

According to BSNL's original tender document, 60 percent of the contract was to go to the lowest bidder, which is Ericsson.

The other 40 percent was to go to the second-lowest bidder, Nokia. These two companies were to set up 45.5 million lines. Another 18 million lines are to be set up by a state-owned ITI, in collaboration with Alcatel, under the reserved quota for PSUs.

Now, with Ericsson's bid in doldrums, Motorola and Siemens may be back in the running for the BSNL contract, with Nokia moving from second position to a clear leader.

The board of directors of the state-owned BSNL are due to meet this week to discuss plans for a possible re-tender for GSM technology, and making a new offer to Ericsson.