NORTHEAST MOBILE TOWER PROJECT: TELECOM SCAM IN MAKING?

One advertisement which marks completion of three years of Narendra Modi government having remained untouched by any case of corruption is being played out loud in all FM radio stations these day. But for how long will the unblemished image of current BJP government remain is very hard say. Particularly when the current dealings at the Department of Telecommunications are taken into account. To know what all is cooking in Sanchar Bhawan which should worry Prime Minister Narendra Modi, read on…

NEW DELHI, JUNE 20, 2017: Very soon Telecom Commission will take a decision on a key mobile infrastructure project to cover eight Northeastern states which has been divided into two phases and is funded by DoT’s Universal Service Obligation Fund (USOF). While for phase-I, BSNL (the implementing agency) has selected two companies after competitive bidding process, for phase-II (which is bigger than phase-I and reserved for private mobile operators by DoT), only one company has come forward, namely Bharti Airtel.

But what smells of a possible scam is the fact that while phase-I of the project, comprising difficult areas in Arunachal Pradesh and Assam where 2817 cell sites have to come up, the project price has been finalised at Rs.2,386 crores against the estimated cost of Rs.1,975 crore (a hike of 20%), for phase-II comprising 4,177 sites in eight states, the total cost has jumped to Rs.4,396 crore against the estimated cost of Rs.2,817 crore (a hike of 56%). A 36% hike in project cost in phase-II compared to phase-I when the nature of work in both are identical.

This means that if the Telecom Commission, the highest decision-making body of the DoT, clears both the projects, Bharti Airtel will execute phase-II of the project at 30% higher cost compared to phase-I. This will result in a massive loss to the government exchequer.

And this is not all. There are several other lacunae in the entire tendering process of phase-II which smells of nexus between the high-ranked DoT officials and private operators. Let us take them one by one.

First and foremost, when government funds are involved in a project, why should the DoT not go for open bidding instead of reserving a major portion of the project for private operators. In phase-I open bidding was allowed, but phase-II was kept exclusively for private operators. In a way, DoT wants to reward private operators instead of penalising them for not having fulfilled license conditions of providing proper coverage to their subscribers even after more than a decade of having begun their operations in the Northeast.

Another major deviation from the laid norms in phase-II is in the implementation of two major recommendations of the government and TRAI, the telecom sector regulator. Government sources say DoT was literally arm-twisted by Cellular Operators Association of India (COAI), representing top GSM players, to scale down tender norms to allegedly benefit private operators. All this was done without taking the Union Cabinet into confidence as the project was originally passed by the Cabinet in 2014.

First, the norm of putting up solar panels for uninterrupted green power supply at cell sites was diluted for phase-II, but cost of solar panels were not taken into account and its prices in tender documents were not reduced. Second, relaxation was given in selection of equipment provider in phase-II, thus ignoring security concerns as many towers will come up along international borders and other strategic places. It also ignored clarion call of Prime Minister Narendra Modi to push “Make in India” technology and products. All these norms are being followed in phase-I.

Government sources also point out that keeping BSNL away from phase-II will not only hurt the government-owned telecom firm which is facing tough competition from private players, but will also give undue advantage to private player who will execute the project. Had BSNL been given phase-II of the project, DoT could have helped the state-run firm to earn extra revenues in the form of inter-connect usage charge (IUC) from other operators in lieu of usage of its infrastructure. But here the successful private operator will earn that extra buck from the project which has been funded by public money.

It seems that DoT has also not learnt from its past mistakes. Instead of trusting its own agency, BSNL, it has virtually decided to give major chunk of the project to a private party. The case in point is that of Reliance Communications and DoT which were severely indited by CAG a few years ago for entering into an arrangement for setting up towers in rural areas. Towers were funded by DoT and set up by RCom, but one fine day the private operator stopped running the towers and vanished, leading to loss of public funds and disruption of mobile services.

Ironically, all this is now an open secret in the Sanchar Bhawan. Industry bodies have already petitioned the Telecom Minister, the Telecom Secretary and the USOF Administrator about serious violations in carrying out tendering process in such an important telecom infrastructure project which is also linked to India’s security and is also key to implementation of Digital India programme in the eight NE states. Even some MPs from the Northeast have complained about this to the Telecom Minister and raised it in Parliament.

Now the Telecom Equipment Manufacturers Association of India (TEMA) has approached the Cabinet Secretary and also sent a letter to the Prime Minister’s Office giving details about the alleged gross violations and irregularities in the Northeast telecom project. DoT sources say even Telecom Secretary Aruna Sunderarajan, who took charge a few weeks ago, has also been alerted about these alleged violations and irregularities.


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