News From Telecom World

BTCL Lost BDT 2000 million due to corruption (Bangladesh)

Posted on: January 18, 2009

A task force probe found that Bangladesh Telephone and Telegraph Board’s (BTTB’s) mobile phone project TeleTalk incurred losses of over Tk 200 crore due to implementation delay, and blamed it on unfair practices and negligence of the then telecom minister and eight high officials of the BTTB.

Implementation period of the project was 2002 to 2004 but it ended in July 2008.

A bribery involving Arafat Rahman Koko, son of former prime minister Khaleda Zia, concerning the project had come to light earlier as foreign investigators probed Germany-based industrial giant Siemens’ global bribery scandal to get projects in different countries.

When Siemens’ bribery scandal was revealed globally, a local task force under the National Coordination Committee on Corruption and Serious Crimes (NCC) in a probe report said some high-ups of the previous four-party alliance government including then telecom minister Aminul Haque and now-defunct BTTB chairman Mohammad Nurul Islam and seven other officials were responsible for delaying the project.

Two former project directors of the project, deputy general manager of TeleTalk, former general manager of TeleTalk, former director (procurement), and former director (development and coordination) of TeleTalk were also blamed for the irregularities.

The estimated cost of the once lucrative public mobile project named ‘10 lakh T&T Mobile Phone Project’ (TeleTalk), was Tk 594 crore. But the cost finally rose to Tk 801crore due to unfair practices.

TeleTalk entered market in 2005 but it is yet to make profit or build significant customers base.

According to the probe report, the government had invited bids for the project in August 2002. The telecom ministry took two years to approve the vendor for implementing it. “Basically, reluctance of Ministry of Telecommunication was responsible for slow implementation of the project,” it said.

After two years, in June 2004, BTTB concluded a deal with vendors to execute the project. But interestingly, only 16 days were left for it. Siemens was awarded contract for the project, and later Chinese-based Huawei was made a second equipment supplier for the project.

Recently, the way Siemens won the project contract as lowest bidder was known from a US district court’s memorandum narrating the company’s corruption in Bangladesh.

The US court said that between 2000 and 2002, BTTB, state-owned telecommunications authority, conducted three open tenders for a mobile telephone project that was ultimately awarded to Siemens.

In the first tender, Siemens was left off for technical non-compliance. The tender was however cancelled. The second tender in 2001 was also cancelled. After a change of government that year, BTTB floated the third tender that initially saw Siemens disqualified from the bidding.

Teamed up with Siemens Bangladesh and Siemens Mobile Communications S.P.A. (then a Siemens subsidiary located in Milan, Italy), the company ultimately won part of the contract in June 2004.

Siemens’ and its subsidiaries’ portion of the contract value was $40,887,000. From May 2001 to August 2006, Siemens Bangladesh engaged or had to engage purported business consultants to bribe government officials for favour during the bidding process, according to the US court report.

Besides, Huawei was awarded $ 35 million contract for the project.

The task force investigation report said the project –10 lakh T&T Mobile Phone Project– was not completed till its last deadline in June 2008.

Repeated decision changes by the Telecom Ministry, money wastage in the name of training, transportation and surveillance were mainly blamed for the huge monetary losses.

The report said discrepancy arose at the very onset of the project, when it began as a project instead of a fresh company in the face of stubborn refusal by the Telecom Ministry and BTTB.

As per the ministry’ decision, the project implementation work went to BTTB, and TeleTalk as a new company undertook the operation job.

“Such decision mainly made a scope to telecom vendor’s strong influence on the company’s decision-making, and also illegally awarding contracts,” the probe report said.

Project director was changed five times, which could be termed a sign of corruption, it mentioned.

Mentioning that five other vendors were also included for implementing the project, the report said only a single company could complete the work in due time.

“Although there is a provision for imposing penalty on the irregular vendor, interestingly no action was taken by the government,” the report said.

“Even BTTB did not issue any showcause notice on the vendors for irregularities.”

Contacted, an accused official said project officials just complied with directives from the ministry. “The project evaluation committee and those who handled the bidding process should be blamed.”

Seeking anonymity, he also said, “Some mobile operators also played a strong role to ensure that the project does not succeed.”

Source: Daily Star

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1 Response to "BTCL Lost BDT 2000 million due to corruption (Bangladesh)"

Hopefully Corruption will be decreased in this Government session. Lets hope for the best. We want to see a Corruption free Bangladesh.

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