SANKHYA VAHINI: In the Line of Fire

Billed
as one of the many things that India would need to survive and
succeed in an IT driven world, Sankhya Vahini, the proposed
country-wide high-speed broadband data network, has run into
rough weather even before a take off. The project is a JV
between the Department of Telecom Services (DTS) and US-based
IUNet. As allegations of irregularities and lack of transparency
in the signing of the Memorandum of Understanding (MoU) with the
company fly in from within and outside the government, pressure
is mounting on the Vajpayee government to scrap the project.
Apart from many senior DoT officials, a number of senior members
of the Union Cabinet have objected to the nature of the MoU.

Objectors and
the Objection

The
issue was first brought into focus by the Rashtriya Swayamsevak
Sangh (RSS), which alleged that not only was the Rs 1,000 crore
project an open invitation to the company to loot the country,
it was also a threat to national security. It also accused the
Government of indulging in unnecessary haste in clearing the
project. RSS is now adamant that come what may it will not allow
the project to take off.

If it was not for the
voices raised from other quarters including senior officials
from the DoT, the controversy over the project could have been
dismissed as just another manifestation of anti-liberalization
and anti-foreign investment stand of the RSS. The DoT officials
question as to why a similar venture proposed by VSNL and
British Telecom (BT) was not allowed three years back. One of
the objections then raised was that VSNL had chosen the MoU
route rather than inviting bids and that the project would end
up allowing back door entry to BT in the national long-distance
services sector. What has annoyed the DoT officials is the fact
that after sitting on a decision on the proposal for over two
years, the telecom commission asked VSNL to invite bids from
telecom majors for the selection of a partner. Thereafter, for
all practical purposes, the project was shelved. Their argument
is that there cannot be different rules for different people.

Interestingly, the current
secretary of DTS, PS Saran, who was then member (services) of
the Telecom Commission, had opposed the VSNL-BT project to the
hilt. Now, as it appears, DTS itself did not find it worth to
follow the best practices and procedures to select IUNet for the
JV. What has intrigued officials is the fact that DTS chose to
partner with IUNet. They say that no company by that name even
existed when the MoU was signed in October 1999.

Moreover, if the VSNL-BT
project could have provided backdoor entry to the latter in
national long-distance services, how come the same could not be
true of IUNet, they argue. This apart, sources point
out a number of unreasonable clauses in the MoU heavily
favouring IUNet. For instance, IUNet has been given the complete
charge of purchasing the entire equipment required for the
project. This, according to sources, is surprising since the
Government owns 51 percent equity in the project.

The arguments put forward
by the opponents of the project seem reasonable when one looks
at the share holding pattern of Sankhya Vahini and the various
"incentives" contained in the MoU. While the DTS will
hold 45 percent equity, the ministry of IT will hold 2 percent
and educational institutes the remaining 4 percent.

IUNet, an organization
being set up by the Carnegie Mellon University of the US, will
hold 49 percent equity in the company. The MoU envisages free
real estate to Sankhya Vahini courtesy DTS. Besides, the
Department will transfer 10,000 kilometre of single pair of
optical fibre within 90 days of the agreement. No credible
arguments have been put forward by the Government with regard to
these provisions.

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