Plea against contracts awarded under Bharat Net by govt on nomination basis: HC seeks Centre reply

The Delhi High Court on Friday sought response of the Centre and Central Vigilance Commission on a plea challenging award of contracts to Common Service Centres e-Governance Services Ltd (CSC) for installing wifi access points in villages across the country under the BharatNet project without following the tender process.

A bench of Chief Justice D N Patel and Justice Prateek Jalan issued notice to the ministries of Communications and Electronics and Technology, CVC, CSC and Bharat Broadband Network Limited (BBNL) and seeking their stand on the plea by NGO Telecom Watchdog.

The NGO, represented by advocate Prashant Bhushan, told the court that CSC was a special purpose vehicle (SPV) created by the Ministry of Electronics and Information Technology (MeitY) for providing e-governance services under the public-private partnership (PPP) model.

The petition, filed through advocates Pranav Sachdeva and Jatin Bhardwaj, has contended that CSC SPV was a private company, but was allegedly projecting itself as a government entity to get the contracts on nomination basis.

The NGO has further alleged that after receiving contracts from the government, CSC SPV passes on the same to its wholly owned subsidiary -- CSC WiFiChoupal Services India Pvt Ltd (CSC Choupal) -- which in turn passes on the contracts to various other private companies, without any tender.

The petition has alleged that "the scam started in March 2017 with the first contract (Contract-1) worth Rs 100 crore awarded for 5,000 WiFi Access points (APs). It was followed by second contract (Contract-2) for 28,248 WiFi APs worth over Rs 500 crore issued in February 2018.'

"In July 2019 a third contract (Contract-3) worth Rs 1,903.50 crore was awarded which included infrastructure created under BharatNet Phase-1 for one year, First Line Maintenance (FLM) of Optical Fiber Cable (OFC) installed under BharatNet Phase-1 for one year, and Capex for creating two APs per GP in 90,000 remaining GPs under BharatNet Phase-1, for five years," the NGO has further said in the petition.

The NGO has alleged that for the same work, Department of Telecommunications' (DoT) Bharat Broadband Network Ltd (BBNL) had earlier floated four tenders which were later withdrawn on "flimsy grounds".

BBNL was incorporated in 2012 by the DoT as its wholly owned PSU for the implementation of the BharatNetproject under which Optical Fiber Cable (OFC) was to be laid across the country covering all the 250,000 gram panchayats (GPs)., the petition has said.

"The very same works, for which BBNL invited four tenders and subsequently cancelled them, are being awarded by the Universal Service Obligation (USO) Fund on nomination basis despite objections by its finance wing which has insisted that contracts should be awarded through tenders only.

"Moreover, the technical wing of the USO Fund has also pointed out that WiFi gives very limited coverage and it is practically of no use. The portal of CSC Choupal states that WiFi has 100 to 150 meters coverage only," the petition has claimed.

The UFO Fund was created under the DoT in 2002-03 "for the purpose of funding unviable telecom projects", the plea has said and added that all the telecom operators pay to the USO Fund, 5 per cent of their gross revenue after adjusting for deductions.

The NGO has sought quashing of a July 2019 agreement signed between the DoT, BBNL and CSC SPV and any consequent action taken by them pursuant to the agreement.

It has also sought a direction to CVC to investigate the NGO's complaints made in 2018 and this year against the award of contracts to CSC in a time-bound manner.

The petition has further sought that directions to the Centre not to award any contract in future to CSC SPV or any other entity without following a transparent competitive tender or auction process.