NEW DELHI: A Parliamentary panel that scrutinises the accounts of the government and state-owned companies has launched a probe into the dismal financial performance of BSNL, in search of answers to turn around the public sector telco’s fortunes.
The Parliamentary Accounts Committee (PAC) has written to the department of telecom to respond with strategies to improve the finances of BSNL, which posted a loss of Rs 1,822.7 crore for the year to end March, a first in the company’s history. In the letter set last week, viewed by ET, the panel has also asked DoT to specify action taken on BSNL’s long-pending demand of compensation for its loss-making landline operations, especially in rural India.
The investigation by PAC, which examines whether public enterprises are run efficiently, brings again into sharp focus the crushing financial blows BSNL has received in recent years. The panel, whose findings reach the Comptroller and Auditor General, is also probing telecom minister A Raja’s move to award telecom licences in 2008 at rates fixed in 2001.
PAC’s scrutiny of BSNL’s running is expected to put more pressure on Mr Raja, whose actions the panel has found have had a direct bearing on the company’s dwindling fortunes. BSNL’s initial tender for 45 million Global System for Mobile Communications (GSM) lines in 2006 was slashed to 14 million by Mr Raja.
A follow-on tender for 93 million GSM lines, the world’s largest equipment order, was cancelled after a series of controversies, even as rivals such as Bharti Airtel, Reliance Communications and the Tatas expanded to feed an expanding customer base.
The PAC has pointed out that the ‘single most important reason’ behind BSNL’s decline was failure of the tender, leading to non-supply of equipment, which eventually resulted in the state-owned operator losing market share. The panel has also sent a barrage of questions to the DoT seeking an explanation as well as answers on the department’s role or intervention in the cancellation of the tender.
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