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| July 27, 2006 | Thursday | Jumadi-ul-Sani 30, 1427 |
PTCL policy affects TIP’s profitability: Procurement of 200,000 sets
HARIPUR, July 26: Ill-conceived policies and alleged inclination of the PTCL authorities towards some multinational companies caused Rs170 million losses to its subsidiary Telephone Industries of Pakistan (TIP) during the last fiscal year and pushed it to the verge of collapse, sources privy to the PTCL’s procurement department told Dawn here on Tuesday.
Purchase of 200,000 fixed wireless terminals, also known as wireless local loop system (WLL) telephone sets, is a case in point wherein, according to the sources, the PTCL had violated the terms of quotations and besides inflicting Rs170 million losses to the TIP, also deprived the national exchequer of expected Rs40 million savings.
According to a report submitted in the meeting of the PTCL board held at PTCL headquarter on June 20, 2006, (a copy of which is held by Dawn), the TIP submitted a quotation of 100,000 WLL sets with 1,900 MHz frequency on May 27, 2005 in response to the PTCL’s limited enquiry No. PUR 5-19/2004/1338 dated May 23, 2005.
The enquiry was also sent to two other suppliers M/s ZTE and M/s HVAWE for supply within four weeks.
Report says that the TIP stood second in terms of rates offered and qualified for the 50 per cent of the total supply order and was given an understanding to this effect by the PTCL.
The TIP had offered to supply these sets at the rate of Rs5,247 per piece against HVAWE’s rates of Rs5,280 per piece and those of ZTE’s Rs5,196 per piece.
Subsequent to understanding of 50 per cent of orders, the TIP management proceeded for advance ordering on M/s Westech of Korea and procured 35,000 WLL sets at the rate of $68 per piece, availing the facility of minimum duties and zero sales tax that was offered by the CBR on local manufacturing of fixed wireless terminals till July 28, 2005.
The said tariff regime was also mentioned in the letter of coordinator engineering development board Islamabad vide No EDB-TE/11/05-Tech.II-1269, dated May 3, 2005.
The TIP, according to the report, had earlier supplied 80,000 WLL sets of the same frequency to the PTCL at the rate of Rs5,300 per set which were working flawlessly in different parts of the country.
However despite the fact that the TIP stood second with a difference of Rs51 from the ZTE’s lowest quotation of Rs5196 per set, the TIP deserved to be given the order of 50 per cent supply of WLL set, the TIP was jettisoned from the quotation and the order of 100,000 sets in addition to the quoted quantity of 100,000 (total 200,000) was given to ZTE and HVAWE without any reason.
It is further mentioned in the report that the TIP offered to supply WLL sets at the rate of Rs5,247 per piece while the order placed on MNCs cost the PTCL Rs5,400 per piece after letter of credit charges, duties, freight, loading and unloading. By doing so, the report pointed out, the PTCL had suffered a loss of Rs40 million.
Depriving the TIP of its legal right of 50% share of the proposed supply, the PTCL caused a loss of Rs143 million that rose to Rs170 million after calculation of interest as the TIP had borrowed money from a local bank for purchase of 35000 sets.
The report further reveals that the TIP offered to reduce supply price to Rs4900 per set but the PTCL procurement department was reluctant to purchase the sets from TIP.
The sources said that the PTCL had earlier, too, inflicted a loss of Rs450 million to the TIP in early 90s when it did not lift manufactured exchange racks of electro mechanical system, also known as EMD system. Likewise, the factory was also made to bear the brunt of golden handshake scheme that was offered to 2,000 workers during 1996 and 1998 and bore its expenses of Rs1,065 million which the PTCL never paid to the TIP. It merits mentioning here that the standing committee of the National Assembly on information technology had, during its visit last week, took strong exception of the losses of the TIP and had ordered an inquiry into the purchase of WLL sets.
It is a conspiracy against the TIP by some officers of the PTCL who were bent upon closing the factory for the pleasure of some foreign companies, the source said, adding that closure of the factory could lead to agitation.
He claimed that if the factory was fully loaded to its capacity and Rs 1.2 billion which the PTCL owed to it was paid to it, the unit could fulfil 100% requirements of country and could also accommodate additional 2,000 workers.
Meanwhile, when the MD TIP was contacted for comments he was said to be on ex-Pakistan leave.
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