Quick telecom bidding raises eyebrows | The Daily Star
12:00 AM, December 30, 2016 / LAST MODIFIED: 12:44 AM, December 30, 2016

Quick telecom bidding raises eyebrows

BTCL, through a 4-day procurement process, awards contract to Telephone Shilpa Sangstha to build undersea cable links

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Public procurement from international sources is usually a lengthy process in Bangladesh. But Bangladesh Telecommunications Company Ltd (BTCL) has only taken four days to complete an international purchase to link the capital city with the country's second submarine cable, only to raise eyebrows from experts.

Within this time the state-owned telecom firm has sought an offer, received, evaluated, approved and signed a deal, recording the fastest government procurement.

Moreover BTCL has received supplies from the seller, another state-owned company Telephone Shilpa Sangstha Ltd (TSS), violating court order. Legal experts termed it contempt of court.

Procurement experts said it is impossible to complete such an international purchase within four days as a number of time-consuming procedures are required.

Md Faruque Hossain, director-general of the Central Procurement Technical Unit (CPTU) of the planning ministry, said there are five to six steps in procurement, and every step takes a few days to complete.

“In this case, we have found very fast procedural activities. It seems that there is some collaboration between TSS and BTCL officials,” he said.

Hossain said though it was direct procurement it needs to give the supplier at least 14 days after seeking the offer.

Normally, the technical evaluation committee takes seven days to evaluate the pros and cons of a proposal. The board has to approve it. There are other formalities to complete, such as depositing performance security. Then a final deal can be signed, according to Hossain.

However, the officials who were responsible for the purchase said they complied with related rules and regulations.

The procurement process started on November 9 when BTCL's board at a meeting decided to install transmission systems from Kuakata to Dhaka under a direct purchase.

The meeting minutes were signed on November 13. However, TSS placed a proposal for the purchase on November 10, according to documents.

TSS has never produced or assembled this kind of transmission systems, said its officials.

It decided to bring the required equipment from an Indian company, Tejas Networks, meaning TSS obtained Tajas Networks' experience certificate, technical and financial certifications and offers within less than 24 hours after getting the green light from BTCL, said insiders.

On November 10, BTCL formed a committee to ink a deal with TSS. The committee gave their nod in favour of TSS on November 13, as November 11 and 12 were weekly holidays.

A day later, BTCL approved the purchase proposal in an emergency board meeting, and on November 15, the contract between BTCL and TSS was signed, read the meeting minutes of BTCL board.

According to the Public Procurement Rules-2008, a performance security is mandatory before signing an agreement. But it was missing in this case.

After receiving the notification award, TSS in a letter assured BTCL that it will provide security deposit within shortest possible time after getting it from their technology partner Tejas, again violating public procurement rules.

Earlier, BTCL board of directors called an international bidding on October 15 where Netas Telekomunikasyon A.S., Turkey, offering US-based Ciena's equipment, was found responsive both technically and financially. The Turkish firm was declared a successful bidder and recommended for the contract.

But when it was placed before the board for approval, the board cancelled the whole tender process without citing any reason.

Netas immediately initiated a complaint under the Public Procurement Act-2006 and the Public Procurement Rules-2008. As per the law, any notification of an award to anybody is barred until any complaint is settled at the CPTU.

However, BTCL awarded the contract to TSS, keeping the complaint pending.

This prompted Netas to file a writ challenging the legality of cancelling the tender it took part in, and the awarding of the contract to TSS.

The High Court in a verdict on December 12 declared illegal the process of awarding the job to TSS as well as cancellation of the bidding process that saw Netas emerge as the qualified bidder.

The court also directed BTCL to call for a fresh international bidding.

Telecom Division Secretary Md Faizur Rahman Chowdhury, also the chairman of both BTCL and TSS, said the issue is now in court and they are waiting for the court order.

“What we have understood is that the court said the tender cancellation procedure is okay. And the court also directed us to go for a fresh tender,” he told The Daily Star in a telephone interview.

A copy of product delivery receipt dated December 20 shows that TSS started supplying materials to BTCL under the agreement signed on November 15 though the court declared the deal illegal.

“The court has directly said the notification of the award to TSS is illegal. So, if TSS again supplies materials under the agreement then it is clearly contempt of court,” said Barrister Mahfuzur Rahman Milon.

“We may file a separate petition for the contempt of court,” said Milon, who is a lawyer of Netas Telekomunikasyon.

TSS Managing Director Kabir Hasan could not be contacted despite several attempts.

Kuakata is the landing station of the country's second undersea cable known as SEA-ME-WE-5 (South East Asia–Middle East–Western Europe 5 optical fibre submarine communications cable system).

Earlier in April, BTCL floated an international tender. Three companies -- Netas, and Huawei Technologies and FiberHome Technologies Group, both Chinese companies -- submitted their proposals. But only Netas qualified both technically and financially.

Tejas bought tender documents through its local agent System and Services Ltd but did not submit its offer. However, in the meantime, Tejas placed a separate proposal to BTCL in May and placed another revised proposal in July, according to documents.

When Netas' offer was placed before the BTCL board for the final approval in October, it refused to endorse the offer and cancelled all the previous procedures.

Documents show that, before cancelling the tender procedure, managing directors of BTCL and TSS and another state-owned entity Bangladesh Submarine Cable Company Ltd, along with Faizur Rahman Chowdhury, visited Tejas office in Bangalore, India. The company paid all the expenses of the officials' visit.

Chowdhury said visiting a particular company before buying their products is a normal practice. He saw no problem in visiting Tejas Networks factory.

He also said Bangladesh has until February 21 to connect with the SEA-ME-WE 5 cable. He is hopeful that the country will be able to get connected with it by the stipulated time.

Once connected, Bangladesh will get an additional 1,400 gigabits per second of bandwidth from the new cable.

Initially, the longevity of the cable has been fixed at 20 years, and it may be increased to 25 years by optimum maintenance.

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