Editorial- February -2016

BSNL has illegally and hurriedly released payments to the Chinese vendor, ZTE worth about Rs 1,000 crores. These monies have been released for uninstalled sites, in utter violation of tender norms. This has been done by three men who form the top management of BSNL, the CMD of the company, Anupam Shrivastava, RK Mittal, Director of Mobile Services, and NK Gupta, another Director of BSNL who for sometime held charge of the Mobile services of the company.

This illegal payment release has been done by invoking a letter from the expenditure division of finance ministry that administered a rap on BSNL for ‘dismal capex expenditure’ by BSNL. Capex expenditure reflects the rate of project completion; it is not a call for letting loose payments for projects that are incomplete or as yet not done. And yet this is how it was interpreted.

In 2012, ZTE had won contracts for installation of GSM (2G & 3G) equipment in three zones – North, South & East – on turnkey basis. Later, it was awarded the contract for the West zone as well. Thus, ZTE is the only contractor for BSNL of GSM services across India.

Even a rookie in the telecom sector knows that a turnkey order means the provision of a complete product or service that is ready for immediate use. And all know that payments of this nature are linked to rollout of ordered equipment. In this particular tender, the condition was that 60 pc, 75 pc, 90 pc and 100 pc payments were to be released linked with the rollout of the ordered equipment, for which sites were handed over. The rollout specifications were 30 pc, 60 pc, 100 pc and ‘one year after successful commissioning or on after 80 pc loading whichever is earlier.’

Therefore, it’s clear that the terms and conditions do not and cannot mean payments for equipment languishing in vendor (ZTE) warehouses. And these were languishing stocks because instead of reviewing the supplies on a monthly basis as was required by the tender conditions, BSNL kept procuring the equipment during the time when Mr Shrivastava was the Director of Mobile Services.

But this is what has happened. How the official process was abused, how 20 signatures were whipped up on a single day to commit this illegality is the stuff of our cover story.

In MTNL also similar developments have unfolded. NK Yadav, who is the acting CMD of MTNL, has given away Rs 27 crore in an upgradation order to ALU even though such equipment cannot be used without upgradation of core network. In the HTC mobile phone theft matter, reported earlier in the magazine, Mr Yadav has now tried to dodge the investigators by procuring three new HTC phones in cash and getting backdated receipts from MTNL officers to cover up this heist. Read about these revelations.