ITI asks Alcatel Lucent to pay for not meeting technical standards

ITI asks Alcatel Lucent to pay for not meeting technical standards

Manoj Gairola

Posted online: Friday, March 28, 2008 at 2318 hrs IST

New Delhi, March 27
Differences between government-owned ITI and its technology partner Alcatel Lucent have come out in the open, with ITI seeking Rs 130 crore from Alcatel Lucent for not meeting technical specifications for equipment supplied to Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL) under technology transfer schemes.

In a letter to the Alcatel Lucent chief finance officer (CFO), ITI has sought payments pending due to validation issues since 1996. “An amount of Rs 930 million has been shown as overdue to Alcatel from ITI. We appreciate your concern and are equally keen to finalise this issue without any further delays. However, withholding of processing of further orders as indicated in the letter does not arise since as per our records, it is observed that a factual net amount of Rs 1340 million is pending from your side after off-setting your claims of Rs 930 million,” said the letter issued by ITI’s finance department to Alcatel Lucent.

When contacted, ITI director (marketing) Tejbir Singh refused to comment. ITI has been purchasing technology from Alcatel since 1983 for fixedline switches and since 2004 for GSM. The deal was made with the assurance that Alcatel would meet all technical specifications and standards laid by TEC, a division of the department of telecommunications (DoT) responsible for setting up standards.

However, on may occasions the technology and equipment supplied by Alcatel Lucent failed to meet the complete technical specifications. That is the reason BSNL, which is ITI’s main customer, didn’t pay the full amount.

The total demand of Rs 223 crore raised by ITI on Alcatel Lucent is for a period of more than 10 years. It is surprising why ITI didn’t seek its due for so many years. In the past, ITI has sought funds from the government to pay salaries to its employees. Interestingly, Rs 223 crore is sufficient to meet a year’s salary bill of ITI.

In November 2006, Sonia Gandhi inaugurated ITI’s GSM manufacturing unit in Raebareli under much fanfare. ITI has a tie-up with Alcatel for technology transfer.

DoT has a quota policy for ITI, under which BSNL and MTNL are forced to give up to 30 per cent of total orders to ITI. For most of the orders, ITI tied up with Alcatel. ITI suffered a loss of about Rs 117 crore for the third quarter of 2007-08.

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ITI asks Alcatel Lucent to pay for not meeting technical standards Manoj Gairola Posted online: Friday, March 28, 2008 at 2318 hrs IST New Delhi, March 27 Differences between government-owned ITI and its technology partner Alcatel Lucent have come out in the open, with ITI seeking Rs 130 crore from Alcatel Lucent for not meeting technical specifications for equipment supplied to Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL) under technology transfer schemes. In a letter to the Alcatel Lucent chief finance officer (CFO), ITI has sought payments pending due to validation issues since 1996. “An amount of Rs 930 million has been shown as overdue to Alcatel from ITI. We appreciate your concern and are equally keen to finalise this issue without any further delays. However, withholding of processing of further orders as indicated in the letter does not arise since as per our records, it is observed that a factual net amount of Rs 1340 million is pending from your side after off-setting your claims of Rs 930 million,” said the letter issued by ITI’s finance department to Alcatel Lucent. When contacted, ITI director (marketing) Tejbir Singh refused to comment. ITI has been purchasing technology from Alcatel since 1983 for fixedline switches and since 2004 for GSM. The deal was made with the assurance that Alcatel would meet all technical specifications and standards laid by TEC, a division of the department of telecommunications (DoT) responsible for setting up standards. However, on may occasions the technology and equipment supplied by Alcatel Lucent failed to meet the complete technical specifications. That is the reason BSNL, which is ITI’s main customer, didn’t pay the full amount. The total demand of Rs 223 crore raised by ITI on Alcatel Lucent is for a period of more than 10 years. It is surprising why ITI didn’t seek its due for so many years. In the past, ITI has sought funds from the government to pay salaries to its employees. Interestingly, Rs 223 crore is sufficient to meet a year’s salary bill of ITI. In November 2006, Sonia Gandhi inaugurated ITI’s GSM manufacturing unit in Raebareli under much fanfare. ITI has a tie-up with Alcatel for technology transfer. DoT has a quota policy for ITI, under which BSNL and MTNL are forced to give up to 30 per cent of total orders to ITI. For most of the orders, ITI tied up with Alcatel. ITI suffered a loss of about Rs 117 crore for the third quarter of 2007-08.