Dt: 4/8/22
Ministerial Interference in PSUs
Dr T H Chowdary*
In 1988-89 while I was the Chairman and Managing Director of the VSNL we wanted to replace the Electro-Mechanical International Gateway Telephone Exchanges in Mumbai , Delhi and Chennai by digital electronic exchanges of the latest design. Government wanted us to take a loan from the Asia Development Bank (ADB) for this purpose . We wrote specifications and invited global tenders as required by the Asian Development Bank stipulations. When the bids were received I appointed an evaluation committee in which I included a Dy. Dir General of the Development of Telecoms also besides my own officers . They evaluated the bids and came to the conclusion that the best one was that of Ericsson’s ( Sweden) .
2. The Japan was very much interested that the MEC of that country should get this order. While the process was going on I was invited by the Japanese Counsel in Mumbai for a lunch . I accepted the invitation. During the lunch and after the Japanese Counsel mentioned about the MEC’s bid for the international gateway exchanges. I said the tenders were being evaluated and the right decision would be taken.
3. The evaluation committee recommended that the Ericsson’s bid was the best. Sweden is not a member of the ADB. The ADB called for a meeting in Manila to finalise the loan for the international gateway exchanges of India. There the Japanese officer who was determined to challenge and revise the VSNL’s decision to place the order with Ericsson. I did not go to the meeting purposely . I sent a Chief General Manager of the VSNL Smt. Lakshmi Menon who was a member of the evaluation committed and a very competent engineer . In the deliberation of the ADB on this affair Lakshmi was put to excruciating questions . The discussion was postponed to the next day as Lakshmi Menon stood her ground she called me and told me that the Japanese official of the Bank was becoming difficult as he want her to concede that MEC ‘s officer was better, “what should I do”, she asked me. I said, “since you and your committee were
convinced that Ericsson bid was the best do you still hold that view” , I asked, she affirmed . Then I said, “ come what may, loan or no loan, hold your ground and say that your Ericsson’s bid was the best of all the bids received”. She did so and end of the next day’s decisions the Japanese officer of the ADB congratulated her and said he would agree for the VSNL decision to obtain the Ericsson equipment.
4. I dd not seek any advise from the DOT / Ministry of Communications. We have taken the decision to place the order with Ericsson and issued the Letter of Intent. Then a call came from the Member of the Telecom Board that the Minister Sri Veerabhadra Singh ( former Chief Minister of UP ) and now Minister for Communications in GOI ) was inquiring about this tender and that I should send a report to the Minister . I told him that the VNSL has already decided and had issued the Letter of Indent with Ericsson, there was nothing more to be done and the order will be placed with Ericsson. The member was not happy but just as Smt. Lakshmi Menon stood her ground in Manila with the ADB, I told the Member that she could tell the Minister the order was placed and it is irrevocable .
5. It is clear that Minister would have wanted to place the order to some other company which would approached him. I am sure that a few persons like me who exercise the power without obliging the Minister as the Minister as well as the DOT which is the demonstrative authority for VSNL.
6. This is in fact, in the case of BSNL obtaining new or additional equipment for expansion of its mobile network a minister stood for the file for months on end so that the private companies to get the market and the BSNL would be a very late and lame entrant into the market. To follow the dictates of the ministry or minister defenders upon the caliber of the CMD of the PSU concerned. Those who look for extension or who are –complicit with the minister would jeopardize the interests of the PSU. This has been happening in the case of BSNL far too often. That is why it is in the red. It can not be saved. It is better to enlist state as a corporation and convert it back into a department . ( 774 words)
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