HFCL offer to DoT to end stalemate

Tuesday, November 18 1997

HFCL offer to DoT to end stalemate

Navika Kumar

NEW DELHI, Nov 17: Himachal Futuristic Communications Ltd (HFCL) has offered to pick up the basic services circle in Haryana in return for the Department of Telecommunications (DoT) ending litigations against the company. In a letter to the DoT few days ago, HFCL has asked the department to settle pending issues against the company which have been hanging fire for the last seventeen months.

The DoT is currently vetting the proposal and is expected to refer the matter to the Additional Solicitor General for an advice on the issue. According to sources, the DoT is likely to seek opinions from practically all quarters in the government including the cabinet before reaching a final conclusion.

A single bench of the Delhi High Court had in September upheld the HFCL claim disallowing the DoT from encashing the company's bank guarantees of Rs 105 crore for the four basic service circles of Haryana, Uttar Pradesh (west), Orissa and Delhi. The DoT has now appealed to a Division Bench of the High Court which has prolonged the uncertainty on the issue.

The present HFCL proposal may also benefit the DoT as it would bring to an end the litigations in these four circles and re-start the privatisation process in these circles DoT would then be free to rebid all the circles which have been hanging fire for almost three years now. The HFCL is understood to have made an offer to the DoT to include Rs 80 crore extra in its bid of Rs 4,060 crore for the Haryana circle against licence fees compensating the DoT for the bank guarantees it would stand to lose on the other three circles of Delhi, UP (west) and Orissa. The DoT had fixed a reserve price of Rs 1,300 crore for the Haryana circle with the next highest bidder offering to pay Rs 3,150 crore as license fees.

When contacted, an HFCL spokesperson refused to comment on the latest development stating that the matter was subjudice.

Interestingly, while the company has been discussing such options with the DoT for several months, this is the first time that any written offer has been made.