New Delhi, July 18: Communications minister A Raja’s bid to cancel the $4.8 billion tender by Bharat Sanchar Nigam Ltd (BSNL) for procuring 4.5 million GSM lines was thwarted by a legal opinion from additional solicitor general Gopal Subramanium. When Raja asked BSNL to look at the possibility of scrapping the tender, BSNL sought legal opinion from Subramanium on whether there was any ground to cancel the tender.

Subramanium opined that scrapping this tender would be unconstitutional and could be questioned in a public interest litigation (PIL). He noted that the tender documents are not inconsistent or ambivalent. In such a situation, the tender could be scrapped only if either BSNL didn’t need new network or BSNL couldn’t make payments on account of a financial recession.

“Neither of these two conditions has been stated to exist,” Subramanium noted in his legal opinion, a copy of which is with The Indian Express. “Therefore, it would be unconstitutional to scrap the tender.” The tender was issued during Raja’s predecessor Dayanidhi Maran’s tenure. As first reported by The Indian Express on May 31, the first major decision Raja took after taking charge of the ministry was to ask BSNL officials to bring down the prices quoted by vendors in the tender.

Ericsson, the lowest bidder, had quoted a price of $107 per line in the tender. According to the tender conditions, the order will go to Ericsson and Nokia, the second lowest bidder, at the price quoted by the lowest bidder. As reported earlier in The Indian Express, BSNL’s GSM network is already over stretched — in most parts of the country, there is no capacity available with the company and it cannot give new telephone connections. This has had an adverse impact on its subscriber base and it has slipped to number three position in terms of total subscribers. BSNL, therefore, urgently needs to expand its network.

The tender was for procuring equipment for both 2G and 3G services. BSNL had also sought Subramanium’s opinion on whether the tender could be converted into one for 2G only. Subramanium said that since the tender documents clearly mentioned 2G and 3G, it could not be utilised for 2G alone.

“If such an action is attempted, it will be open to judicial review and there are high chances that the court may interfere in the exercise of its powers of judicial review,” noted Subramanium. He also said that BSNL cannot make any changes in the technical specifications during the bidding process or at the time of considering the tender.

On the issue of reducing the quantity of the order, he pointed out clause 25(a) of Section 2 of the tender document: “BSNL reserves the right to order only up to 17.5 million as required in phase V.1 and as specified in the schedule of requirements, without any change in the unit price or other terms and conditions at the time of award of contract. Further, while ordering for purchases V.2 and V.3, BSNL reserves the right to either restrict the order to 50 per cent of the tendered quantity, including 33 per cent of phase V.1 quantity, or to order up to the tendered quantity.”

Ericsson gets APO

NEW DELHI: BSNL on Wednesday placed an advanced purchase order (APO) with Ericsson for equipment and installation of a GSM network of 14 million lines at about $80 per line. This is about 25 per cent less than the price quoted by Ericsson. “The total quantity has been reduced by 50 per cent to 22.5 million. Out of this, we will first place orders of 14 million lines for 2G services. When the government approves a policy for 3G services, we will place orders for 3.5 million lines of 3G services. For the rest of the quantity, we will place orders in the second phase,” BSNL chairman and managing director A K Sinha told The Indian Express.