Justice Anand to head MTNL

What makes Justice A.S. Anand qualify, you may well ask, for the job of heading the country's biggest telecom services provider, the publi...

What makes Justice A.S. Anand qualify, you may well ask, for the job of heading the country’s biggest telecom services provider, the public sector MTNL. Apart from the fact that he’s never run a telecom firm in his life, he is, after all, the country’s chief justice.

It probably is an inappropriate choice but, of late, the fate of MTNL’s plans seems to be more determined by the country’s courts, that it seemed only fair that the Chief Justice run the public sector giant. To be fair to the judiciary, it should be clarified that no one is holding them responsible for this sorry state. In fact, this column is arguing that since the politicians in charge are not allowing MTNL to function independently, it is the courts which are rescuing it.

If you find this hard to believe, consider this. Somewhere in the middle of last year, MTNL decided that it needed to purchase 50,000 lines of the CDMA technology to provide wireless telephones in Mumbai. A tender was floated, and Fujitsu of Japan emerged as the lowest bidder. Another contender, LG of Korea, however, contended that Fujitsu’s paperwork was incomplete, that it had submitted an `experience certificate’ after the expiry of the bid-submission date, and so went to the Delhi High Court on the matter. In September last year, the judge ruled against MTNL. MTNL then appealed to the same court’s division bench which, in December, upheld MTNL’s case.

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Normally, that should have been enough for MTNL to proceed with its ordering for equipment. Yet, a week after the court validated the order, Communication Minister Ram Vilas Paswan asked MTNL to postpone any further action on the order, and start an inquiry into LG’s complaints — you see, some time before the court order, LG had complained that Fujitsu’s experience certificate which stated it had laid 1 lakh lines in Myanmar was not authentic. Meanwhile, following LG’s appeal against the High Court’s division bench, on September 15 this year, the Supreme Court validated the division bench’s verdict that MTNL was free to go ahead with its project. But a full 16 months were lost because the minister decided to go out of his way to satisfy the doubts raised by LG on a case which didn’t look so great.

It gets worse. A similar tender was issued by MTNL two months ago, for Managed Leased Line Data Networks. This time, the minister of state, Tapan Sikdar, has asked MTNL to keep it in abeyance and to investigate issues raised by the bidder that lost out to Alcatel. The whole process, of MTNL’s replies, and so on, is expected to set back MTNL by several months at least.

All of this, of course, pales into insignificance when you look at what the political machinery did when it came to MTNL’s cellular venture which, it is well known, sent shivers down the spines of all cellular phone operators in the metro cities of Delhi and Mumbai since it would have been much cheaper.

MTNL first bid out for cellular phone suppliers in 1999, and the lowest bidder was Lucent Technologies. Since, by then, the telecom regulator had cancelled its cellular licence, the then CMD of MTNL S. Rajagopalan let the tender lapse. On August 14 last year, a day after the courts ruled in its favour, MTNL floated another tender, which was won by the public sector ITI which had Lucent as a technology partner — at Rs 3,666 per line, this is probably the lowest cellular bid globally. By then, however, complaints were made (some even through the usual rent-an-MP route) that Rajagopalan’s son worked for Lucent, as did the son of Motial, the CMD of ITI.

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In April, an enquiry committee looked into all aspects of the case, even the bit about Rajagopalan’s son. Since Rajagopalan couldn’t be blamed for any wrong-doing, he was given a `displeasure’ letter the day he retired, on the charge that he had not told the government his son worked for Lucent, though, in fact, he had … see this column of July 15, 2000 for a full expose.

The committee then concluded that over a three-year period, it would have been cheaper to buy the cellular equipment from the runner-up Ericsson instead of Lucent, since Ericsson had quoted lower prices for purchases in the second year. This was strange since the committee knew MTNL had bought equipment only for the first year (where Ericsson’s costs were 60 per cent higher), and there was absolutely no commitment to buy from Lucent later. Not surprisingly, given its earlier bias, it gave three recommendations — suspend or sack Rajagopalan, the same for the ITI chief, or order a CBI enquiry. These were then forwarded to the CVC by the ministry.

Since there wasn’t enough ground for the first two options, the CVC said a CBI enquiry could be ordered. Meanwhile MTNL’s board ratified the purchase decision, and decided that they’d ask the ministry to re-examine its decision, refer the matter to the CVC again, to drop the CBI enquiry.

This may or may not happen, but the question is: who is to blame for this constant meddling and delay? And how is a PSU to function if its navratna autonomy exists only on paper? That’s a question addressed to you, Mr Prime Minister, since your ministers clearly believe PSUs report to them.