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Re-tender 93-million line order, DoT asks BSNL
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Process already stuck for a year on Chinese bidder concerns.

The Department of Telecommunications (DoT) has suggested a quick re-tendering of the 93-million GSM line order, one of the largest single contracts in the world, from Bharat Sanchar Nigam Ltd (BSNL).

This is to ensure more than one bidder in each zone, which would ensure the cheapest price for equipment. DoT, in a letter, has asked for BSNL’s comments on the issue.

DoT has said it is possible to re-tender in a short duration and complete the procurement process in two to three months, as tender documents have already been prepared and all bidders are fully familiar with these.

The move, if accepted, could put BSNL at a further disadvantage in catching up with its competitors who have been expanding their capacity, as a result of which the state-owned corporation is losing market share in the mobile space. The equipment order has already been delayed for nearly a year, due to security issues raised about Chinese manufacturers.

In its communication to BSNL, the department had said there was no competition in any zone (the tender order was divided into north, east, south and west zones) and no bidder was left in the west zone. Under these circumstances, though equipment costs are coming down, negotiations with a single bidder may result in finalisation of tenders at higher rates. Besides negotiations with a single bidder will lack transparency in decision making.

When asked to respond for this report, BSNL officials declined to comment. Currently, BSNL is already involved in price negotiations with Ericsson for the two zones and for the southern zone with Huawei. It has also given advance purchase orders to both.

The problem arose after the government decided not to allow Chinese companies to supply equipment in telecom circles that have a border with Pakistan, Nepal, Bangladesh or Myanmar and are considerd sensitive by India. As a result, Chinese manufacturer, Huawei, the highest bidder in west India, was not given the contract, as it was considered a sensitive area.

The same logic ensured that Huawei, the second highest bidder in the north and the east, would not be considered there at all, leaving only Ericsson in the ring. In the south, while Huawei was the highest bidder, the bid of Nokia Siemens was rejected on some grounds, as a result of which the company went to court.

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