Financial and technical criteria make domestic hardware manufacturers ineligible to participate in the tendering process
Thursday, March 03, 2014:
By Richa Chakravarty
The much awaited mega defence telecommunications project worth Rs 130,000 million has been announced, but the conditions laid down for companies to participate in the project make it difficult for Indian manufacturers to do so. The Department of Telecommunications (DoT) has given the responsibility for the project to state-run mobile operator Bharat Sanchar Nigam Ltd. The aim of this project is to build a nationwide secure communications network for the country’s armed forces. However, it seems that domestic manufacturers will miss the opportunity as certain eligibility criteria to bid for the project are heavily in favour of the multinational network gear manufacturers.
While, on one hand, the government is introducing new policies to boost local manufacturing in the country, on the other hand, projects like these put a restriction on the participation of local manufacturers.
Preferential Market Access (PMA) policy introduced by the government is an initiative to lay emphasis on domestic manufacturing. Under this policy a certain percentage of procurement has to be domestically manufactured. However, BSNL did not follow the PMA norms while it floated tenders for network for spectrum (NFS). “The government’s intentions are very clear—to boost manufacturing in the country; but there are some projects where the complexity of technology, the huge investments involved, heavy infrastructure costs and the qualified manpower required make it difficult for domestic players that have a limited access to these. Also, there are some projects in which the domestic players have taken more development time, hence the government has no other choice but to opt for foreign players that can meet their specifications,” shares Yuvraj AR, additional general manager, Bharat Electronics Ltd.
Eligibility criteria that disqualifies domestic players
Two major criteria—financial and technical—make domestic hardware manufacturers ineligible to participate in the Rs 130,000 million project. The financial criterion mandates a turnover of between Rs 25,000 million and Rs 40,000 million during the last three years. On the technical front, the rules say that the companies must have deployed a specified quantum of equipment over a defined period of time.
“We have written to BSNL requesting them to look into the qualification requirements so that the domestic hardware manufacturers could participate in the project, but we have not heard anything from them yet,” says Vinod Sharma, chairman of CII’s committee on ICTE hardware manufacturing.
Raising security issues, the India Electronics & Semiconductor Association (IESA) has also called for stricter rules governing the procurement. “Lack of attention to security issues will pose a severe risk to this highly security-sensitive network. At least the source code for products that are supplied should be resident in India at all times, so that the same can be accessed at times of emergency,” wrote P V G Menon, president of IESA, in a letter to the PMO.
