The Telegraph
Since 1st March, 1999
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Stink of a telecom scandal

New Delhi, Sept. 29: The income-tax department has stumbled on a telecom equipment scam worth over Rs 1,000 crore that is likely to shake up the two government-owned companies Bharat Sanchar Nigam Ltd and Mahanagar Telephone Nigam Ltd.

In a raid conducted on Saturday, the department found from the residence of Rajeev Gupta, a consultant, documents allegedly suggesting that three tenders for cellular equipment worth over Rs 1,000 crore were placed with a company without following procedures.

Over Rs 50 lakh in cash was also found from Gupta’s Sainik Farm house. The papers revealed his association with the multinational telecom equipment vendor that received the orders.

Bharat Sanchar Nigam Ltd sources said: “Rajeev Gupta used to deal with BSNL officials as a consultant of a company called Nirman Management Consultancy and Variant Technologies. This was a front company of a leading telecom equipment vendor. Many former Telecom Commission members were empanelled with the firm as consultants.”

Surender Nair, a senior employee of Gupta, confirmed that raids took place, but described these as “routine”. Gupta cannot be contacted since he is in Himachal Pradesh, Nair said.

The companies that are currently fighting to get the contract for the 3000-line global system for mobile communications (GSM) equipment from BSNL include Motorola and Ericsson. The bidders for another contract for 1200-line code division multiple access (CDMA)-based equipment include Motorola, United Telecom Ltd and Huewai, a Chinese company.

The BSNL sources said: “Gupta was a regular visitor at BSNL with influence in the corridors of the Department of Telecommunications (the government department that controls BSNL and sister concern MTNL). He also managed to rope in a former member of the Telecom Commission who’s a Padmashree awardee.”

A controversy had erupted after BSNL said that to avoid delays in the tendering process and maintain the standard of equipment, it would award new contracts to the same manufacturer that had provided the original supplies. Such a system, BSNL officials had said, would also streamline payment to vendors, often beset with delays.

Recently, the communications and information technology minister, Arun Shourie, had stepped in to sort out complications in tender-based procurement of equipment by BSNL.

Speaking at the annual conference of the Telecom Equipment Manufacturers Association last Friday, Shourie had said he would soon convene a meeting of the association and BSNL and MTNL to review procurement and payment.

Scandals have dogged telecom since the days Sukh Ram was the minister in P.V. Narasimha Rao’s government in the early-to-mid nineties when the forces of robust growth were unleashed in the industry by a technological revolution.

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