CWG Controversy: This time it's MTNL!

Corruption in Indian telecommunications industry is no longer limited to private operators-the loot now seems to be spreading its wings to the PSU operators as well. And the best example of it is the recently released Comptroller and Auditor General report on the Commonwealth Games 2010 that continues to bring ripples to the sector.

According to the report, the government-run Mahanagar Telephone Nigam Limited (MTNL) which got the contract for providing telecommunications services, outsourced the contract to a private firm. The premise of the PSU following public financial accountability norms, was jettisoned as the technical requirements were altered without adequate justification by MTNL to leave only 1 technically qualified bidder, the HCL-Cisco team. There was thus no financial competition. Essentially MTNL acted as a conduit for placement of a contract, on a back-to-back basis, in a non-transparent manner.

The Comptroller and Auditor General has said that the process followed for awarding the telecom service contract for CWG 2010 was flawed. The auditor has blamed MTNL for buying equipment in a non-transparent manner which favored the bid put in by HCL-Cisco .

Moreover to add to the complexity of the issue was the airtel episode. For unexplained reasons airtel's offer, which was superior than that of MTNL, was overlooked by the government of India. Airtel had also proposed for providing telecommunications facility to the organizing committee (OC). The company in its `160 crore contract bid had also included `100 crore sponsorship proposals.

Though the OC was in talks with airtel for the proposal, it did not put forth airtel's bid in front of the government while the proposal was much better than MTNL

The CAG also points towards an offer from airtel that was not brought to the notice of the Government of India, wherein airtel had offered to provide telecommunications services for CWG 2010 worth `100 crore as the lead sponsor, and following an engagement with the organizing committee, the offer was changed to `160 crore (excluding taxes) offset by `100 crore as sponsorship. In addition, the CAG adds, “It is also not understood why Kalmadi and his associates continued to divulge with airtel, even after the Government of India had taken the decision to engage MTNL on the OC's recommendation and thereafter, MTNL was parallely engaged in selecting a contractor to provide these services.”

During the Commonwealth Games 2010, tech majors were contracted for providing timing and scoring system, a games management software system, a website, and IT and telecom infrastructure, besides laptops and desktops. The biggest loss to the exchequer however came from the telecom services contract.
Well, it seems that though the Commonwealth Games might have ended with a good note, but the discrepancies surrounding the deal still seem refurbished.
However it should be noted that this is an inspection report put together by field officers and that the final report may vary.

Ritu Singh
ritus@cybermedia.co.in