BANGLADESH: Cancelled telecoms deals revived
Revived telecom deals, however, suspected to be heavily overpriced
The Daily Star
Sunday, August 20, 2006
by Abu Saeed Khan
The Ministry of Post and Telecommunications has revived two cancelled contracts totalling $15 million for two Chinese companies and forwarded purchase proposals to the Cabinet Committee on Public Procurement (CCPP), which will meet on Monday.
One of these two deals is over-priced by more than 200 per cent while the other is completely unnecessary and is based on a flawed bid, sources said.
Bangladesh Telegraph and Telephone Board (BTTB), the customer, cancelled one of the deals more than two years back on financial grounds. The Ministry of Planning recommended cancellation of the other contract on technical reasons recently.
But the telecommunications ministry has ignored both the decisions and decided to table the purchase proposals for consideration of the CCPP, which will be chaired by Finance and Planning Minister M Saifur Rahman.
Sources said the family members of two highly powerful ministers represent these Chinese companies.
The first deal of $11 million has been controversially structured for the state-owned China National Machinery & Equipment Import & Export Corporation (CMEC) to supply 185 units of radio links for BTTB's rural network.
A top-secret document of the telecoms ministry, however, reveals that bids were originally invited for 220 units of radio links.
The CMEC became the lowest bidder but its price was 2.5 times higher than the BTTB budget.
On April 28, 2004, the BTTB held a board meeting and unanimously decided to abandon the tender and invited fresh bids.
The secret document also reveals that around two months later, on June 13, the Chinese vendor persuaded the telecoms ministry and the BTTB retracted its re-tendering process and go for customising CMEC's overpriced bid.
In the process, the BTTB doubled the budget but reduced the total number of radio link units to 185, meaning it will be paying a far higher price for lesser number of equipment if the CCPP approves this purchase proposal on Monday.
Sources said the BTTB has earlier procured exactly the same equipment for its cellular mobile phone project at a far lesser price. Therefore, the telecoms ministry has no grounds for promoting this deal in favour of CMEC.
Sources said a brother-in-law of a highly influential minister from Chittagong represents the CMEC, which has supplied 1,89,000-line telephone systems to the BTTB since the time of the previous government under a highly controversial supplier's credit arrangement.
The present government has stipulated this deal in its "white paper of corruption by Awami League". But instead of taking any action it secretly attempted to reward the CMEC with further $10 million repeat order in 2003.
It was, however, foiled as the media had leaked the move.
Meanwhile, the telecoms ministry has also cooked up a $3.6 million deal for Huawei Technology of China to supply four units of Voice over Internet Protocol (VoIP) platforms to BTTB.
A high-powered review committee of the Central Procurement Technical Unit under the Implementation, Monitoring and Evaluation Division of the planning ministry has, however, found all the bids, including that of Huawei, technically non-responsive.
The review committee's report blames the BTTB for "hiding" 50 penalty points that Huawei deserves for "material deviation" in its bid. On July 24, the committee gave its unanimous decision to re-tender the project.
But the telecoms ministry brushed aside the verdict and forwarded Huawei's $3.6 million purchase proposal to the CCPP.
Sources said the youngest son of a highly powerful minister from the northeastern region represents Huawei. This minister also holds a key position in the decision making process of the CCPP.
Meanwhile, competent sources of BTTB termed the VoIP platform project a wastage of public fund.
All BTTB customers are using VoIP services by dialling 112 without any so-called platform. "Therefore, why should we unnecessarily spend foreign currency for a useless project like this?" said a BTTB general manager, requesting anonymity. He said no other country has deployed such a "fictitious" platform in the name of VoIP service.
Date Posted: 8/20/2006