Pitroda panel tells BSNL to scrap controversial tender

The committee said BSNL should change its method of growth from outright purchase of equipment to lease arrangement. The vendor who would supply the equipment should be responsible for installation, maintenance and operations, besides future expansion. Such a contract could run for five years, it said.

Private telecom companies already follow such a model for expansion. With this model, BSNL would reduce its capital expenditure, besides reducing its problem of having a shortage of young trained engineers in the latest technologies, the committee said.

BSNL should prepare the operational and quality requirements for the network, along with necessary commercial requirements, as the bid document in 20 days and no changes would be permissible after the bids have been received, to ensure transparency, openness and fairness, it recommended.

The BSNL tender issue was referred to the committee headed by Pitroda (who is advisor to the PM on infrastructure, innovation and information technology), after a number of controversies. These ranged from home ministry objections on Chinese equipment firms to legal battles by disqualified vendors. The committee also had HDFC Chairman Deepak Parekh and Union telecom secretary P J Thomas as members.

The hurdles in the project started after BSNL disqualified three of the five bidders on technical grounds. Ericsson and Huawei were shortlisted, while Nokia Siemens, Alcatel Lucent and ZTE were disqualified. Nokia Siemens challenged its disqualification in court.

Further, security agencies said BSNL could not buy telecom equipment from any Chinese vendor, including Huawei. BSNL, subsequently, started negotiations with Ericsson for lower prices. However, the Department of Telecommunications said BSNL may not get the best price, since there was no competitive bidding.