On April 15, even as the people in Tamil Nadu were bracing for lockdown 2.0, and expecting new announcements from Chief Minister Edappadi K. Palaniswami, the corridors of power at the state secretariat was busy making changes to a tender—drafted as early as December 2019— floated to lay Optic Fibre Cables (OFC) connecting 12,524 village panchayats across Tamil Nadu to provide broadband connectivity up to 1Gbps.
“The government has silently published a corrigendum to the tender, bringing in changes to favour two big companies,” alleged Jayaram Venkatasen, convenor of Arappor Iyakkam, an anti-corruption NGO in Chennai. On April 21, Jayaram has sent written complaints to both the state and Central government agencies, alleging a huge scam in the making to favour a few companies. He has sent complaint letters to the chief minister, the Central Vigilance Commission and the Competition Commission of India.
Tamil Nadu Fibre Net Corporation (TANFINET), launched on June 8, 2018, under the Companies Act, 2013, is a special purpose vehicle set up by the state government to implement the BharatNet project. TANFINET is the nodal agency to prepare request for the proposal for selecting the project implementing agency to carry out the project across 12, 524 village panchayats in Tamil Nadu. The BharatNet project was earlier implemented by the Arasu Cable TV Corporation.
The tender floated by TANFINET ran into a controversy in January this year, after Santhosh Babu IAS, the then information secretary, reportedly submitted his voluntary retirement letter. The issue of tweaking the tender was raised by the opposition and the anti-corruption activists after Santhosh Babu allegedly tendered his resignation. The dust over the controversy in the tender settled by the end of January, when the government remained silent. In February, Santhosh Babu was transferred to yet another department. Besides, TANFINET’s managing director M.S. Shanmugam was also transferred.
According to Arappor Iyakkam, the tender which was issued on December 5, 2019, has been modified on April 15, 2020 through a corrigendum. The corrigendum, published on April 15, clearly shows a substantial increase in the turnover of the bidding companies. The initial notification for the cable laying works to connect 12, 524 villages with internet connection was Rs 1,950 crore. The initial notification, issued in December 2019, required the bidder to have a minimum cumulative annual turnover of Rs 405 crore for the last three financial years, from 2016-17 to 2018-19. The corrigendum, issued on April 15, had notified that the bidder has to have an average annual turnover of Rs 405 crore for the last three financial years. “This is a major anti-competitive clause as the required turnover has been increased by about 300 per cent. This has resulted in turnover requirements to increase from almost 40 per cent of the tender value to 120 per cent of the tender value,” points out Jayaram.
The requirements for the consortium companies and Original Equipment Manufacturers (OEM) has now been made tougher through the corrigendum. “The cumulative experience in the last three years has been changed in each of the last three years in Package B, C and D again which will result in eliminating bidders. The initial notification was published for four packages A,B,C and D with values of Rs. 350 crore, Rs 550 crore, Rs 550 crore and Rs 500 crore respectively,” tells Jayaram.
Incidentally, the tender issued in December, was approved by the executive committee of the Tamil Nadu Infrastructure Development Board (TNIDB), which framed the eligibility conditions for the tender. The TNIDB’s executive committee is led by Chief Secretary K. Shanmugam and comprises of 15 other senior IAS officers, who meet and decide on such policies. The tender for BharatNet project was also vetted and approved by the TNIDB. “The modification of the tender conditions means violating the decision of the TNIDB,” tells Jayaram.
Highly placed sources in the Tamil Nadu Information Department confirmed that the project for laying OFC will begin by mid-May, even if the pandemic and the consequent lockdown continues. Sources also confirm that the government chose to remain silent till March as the controversy over Santhosh Babu’s transfer and the shunting out of Shanmugam had not settled. Again, as the people of the state were beginning to battle COVID-19 and its consequences, sources say the government felt that any development in the Information Technology Department may get highlighted. Sources also say that Santhosh Babu chose to quit only because he argued with the top echelons of the government that the tender conditions can’t be tweaked once drafted and approved by TNIDB.
However, clarifying on the reasons for floating the tender during the COVID-19 crisis to THE WEEK, Minister R.B. Udhayakumar said this was done only because the Centre has reduced the time limit for implementation of the BharatNet project from 11 months to nine months. Stating that the project will directly benefit the 62 lakh beneficiaries of the state government’s free laptop scheme in rural Tamil Nadu, Udhayakumar clarified that the state government was functioning as per the advise of the central government in implementing the BharatNet project. “The Centre has insisted that the project should be completed within nine months, the tender norms were revised as per the existing rules and revised tenders have been floated on April 15.” The minister said a pre-bid meeting was chaired by him on February 21 and that the tender inviting authority has powers to revise the tender as per Section 17 of the Tender Transparency Act.
It is to be mentioned that in Telengana, the BharatNet project was awarded to Sterlite Technologies Limited (STL) to create a high-speed rural broadband network by Telengana Fiber Grid Corporation Limited (T-Fiber). The tender, for the project worth Rs 1,800 crore, was awarded in the first week of January for enabling affordable and high-speed broadband connectivity to 60 lakh rural citizens in the state.
“The tender norms are not to favour any company as alleged. May be in Telengana, they would have won, but in Tamil Nadu, saying that the tender is to favour such companies at the initial stages itself comes with an intention only to accuse the government. We still do not know who the bidder will be,” Udhayakumar clarified.
