‘BSNL chosen for project without tender process and it has quoted high price'

The Department of Telecommunication's plans to go for extensive erection of mobile towers in the Left-Wing extremism-affected areas, to help people and the security forces stay connected, have been opposed by the Finance Ministry, which cited selection of the state-owned Bharat Sanchar Nigam Ltd for the project without following any tender process and its quoting high costs for installation and maintenance.

In its draft note to the Cabinet, the Ministry has objected to the DoT proposal seeking Rs.5,809.38-crore subsidy for the BSNL from the Universal Service Obligation Fund (USOF), created for increasing mobile penetration in rural areas, for commissioning and maintaining 2,199 sites (towers) in LWE areas for five years.

The Ministry of Home Affairs (MHA) and the DoT have been pushing for improving mobile services in six Naxal-affected States covering 80 districts. This exercise, the officials believe, will help in tackling the problem.

The Finance Ministry has noted that the subsidy being sought is “very large” compared to the total subsidy of Rs. 211.84 crore disbursed till 2011-end from the USOF for creation and maintenance of 7,296 towers and 15,407 base transceiver stations (BTS). “This huge difference in costs cannot be accepted solely on the basis of estimates provided by the BSNL,” it says.

“Apparently, out of the 2,199 sites located in the LWE-affected areas, the BSNL has already installed 363 mobile sites. How the BSNL was nominated for this work has not been stated. In case, the BSNL is already authorised for this work, then the necessity for Cabinet approval for the work to be entrusted to the BSNL [on a nomination basis] is not clear.”

Also, DoT the proposal has failed “to provide adequate justification for assigning the work to the BSNL on nomination basis,” says the Finance Ministry note.

Criticising the BSNL's work culture, the note says its “capacity appears to be overstretched” and it “has acquired a reputation for large delays in execution and shoddy performance. There is a possibility that the BSNL will be executing even the present work by subcontracting, in which case, there can be very little reason for assigning the work to the BSNL on nomination basis.”

Asking the DoT to formulate the proposal for appraisal by the Expenditure Finance Committee (EFC), the Finance Ministry has rejected its contention that the LWE-affected areas are commercially unviable. “Any assumption about the [lack of] revenue generating potential in the LWE areas should be backed with evidence in the form of field trials or sample surveys.”

On the plea that the services should be free of cost if they are utilised by the armed forces or the police, the note says “such expenditure should be booked to the accounts of the MHA or the State government rather than being debited to the USOF.”

Meanwhile, a senior Telecom Ministry functionary said the price quoted for installing towers and its maintenance was on the higher side, though he justified the DoT entrusting the task to the BSNL. “Higher quoting of prices and that too without any tender process seems to have jeopardised the project as of now. We will go the government again with the revised project which is crucial to the strategy to fight Naxalism,” the official told The Hindu.

The BSNL was selected as only a government agency could work in a disturbed area and as it would have the support of all government agencies, which was crucial for such an important project, he said.