State-owned BSNL has relaxed the eligibility criteria as well as tightened the domestic value addition norms for companies looking at participating in its Rs 65,000-crore, phase-III BharatNet project tender. In total, the company has made some 100 changes in the tender conditions.
The financial turnover and net worth of the companies participating in the tender has been relaxed by up to 33% and 30%, respectively, in certain circles.
For example, if the minimum average annual turnover required for a company to bid for, say Uttar Pradesh (East) circle was Rs 2,750 crore and minimum net worth required was Rs 425 crore, the same has been reduced to Rs 2,550 crore and Rs 350 crore, respectively.
A copy of the document on amendments to BharatNet project was reviewed by FE. The project, with an overall outlay of Rs 1.4 trillion, is for design, supply, construction, installation of optical fibre cables, switches, routers and other telecom equipment to connect and upgrade existing 164,000 gram panchayats, as well as connect around 47,000 gram panchayats.
BSNL has also extended the deadline for companies to submit the bids for tender, now to May 30. When the tender was rolled out in February, the deadline was April 2 to submit the bids. It will hold a doubt clearing workshop with the stakeholders on May 14.
“It is a complex tender, for which we received more than 4,000 queries. We have replied to each and every query and amended the norms wherever it was necessary,” a BSNL official said.
In about 4,400 queries, several companies also sought relaxation on the financial eligibility, reduction in penalties, guidelines on trusted sources certification, domestic value addition, among other things. In fact, domestic companies such as HFCL, TCS and Tejas, among others, had earlier also demanded an equitable treatment with foreign counterparts like Ericsson and Nokia in the BharatNet tender.
With regard to the eligibility criteria, companies can also participate in consortiums, which can have a cumulative net worth.
However, for average annual turnover in case of consortium, barring the lead members, which need to meet at least 40-50% of the average annual turnover requirement, the remaining members should have minimum Rs 50-100 crore turnover during the last three financial years, based on the category of circles bid for.
Average annual turnover for the last three audited financial years, from FY24 or FY23, can be considered. Besides, the companies participating in the tender need to have at least three years of operations in India as on bid submission date as against five years mentioned in the earlier document.
“This is a minimal relaxation in eligibility criteria and it will not make much difference for small companies as the turnover and net worth requirement is still very high in certain circles,” an executive at a local telecom solution provider said.
“Small companies, including a few listed players as well, will not be able to participate in their individual capacity. They will have to join hands with big system integrators for the BharatNet tender,” another executive of a telecom equipment maker said.
On the domestic value addition, BSNL has strengthened the norms by stating reference to the department of telecommunications’ (DoT’s) public procurement (preference to Make in India) order 2017. The order contains as many as 36 telecom products, services and works with local value addition requirement for companies to be preferred bidder.
The companies will have to submit a self-declaration regarding local content in their telecom products with a certificate from cost auditor certifying the claim if bids exceed Rs 10 crore. Besides, there is a mandatory undertaking requirement for companies submitting bids as Class 1 suppliers. These are companies who have at least 50% local value addition in their equipment.
Similarly, on the trusted sources, the bidder shall not be in the notified list of designated sources, from whom no procurement can be done, the tender said, adding that there will be quality assurance norms and testing of equipment will be done by BSNL.
“The amendment to the BharatNet tender especially with reference to DoT’s Make in India public procurement policy is positive, given our focus to be a product nation with Atmanirbharta,” said Rakesh Bhatnagar, director general of Voice of Indian Communication Technology Enterprises (VoICE).
Bhatnagar, however, said the local content requirement should be product specific, as many companies inflate their domestic value addition by including civil work as well.
Among other amendments, BSNL has relaxed penalties on companies for delay in last-mile connectivity beyond 30 days of completion of project work. “A penalty of Rs 100 per day of delay beyond 30 days shall be levied, unless the exemption is given by BSNL on case-to-case basis with proper justification,” the amended clause said. Earlier, the penalty was Rs 1,000 per day.
In August last year, the Union Cabinet had approved the third such package of Rs 1.39 trillion for BharatNet, taking the total allocation to over Rs 2 trillion so far.