HCL may lose BSNL IT contracts worth Rs 1,700 cr

NEW DELHI: IT firm HCL Infosystems will have to give up two large IT contracts jointly worth over Rs 1,700 cr after the company emerged as the lowest bidder in all the four zones for state-run Bharat Sanchar Nigam’s (BSNL) $1-b IT outsourcing contract. This is because, as per the BSNL tender norms, a single company cannot be awarded more than 50% of the total contract. After emerging as the lowest bidder or L1 in East, West and South zones, HCL Infosystems has now become L1 for managing BSNL’s IT requirements in the northern region also. But considering the telco’s tender conditions, the IT company can be awarded only a maximum of two contracts thus implying that it can provide solutions to BSNL in only two regions. In all the four zones, HCL’s bid has been supported by HP, which will supply hardware and systems and Convergys, which will provide billing solutions. HCL Infosystems chief executive Ajai Chowdhry told ET on the sidelines of an event in Delhi that the company has emerged as the lowest bidder in all the four zones adding that BSNL was yet to award the contract. Asked about HCL’s preference for the zones Mr Chowdhry said: “It is for the telco to decide which regions will be allotted to us. We are well placed as far as positioning is concerned”. “As is the norm at BSNL, the financial bid by HCL Infosystems will be evaluated and it will go through the process of negotiations. The entire procedure will take some more time, after which the contract will be awarded,” Mr Chowdhry added. Earlier this year, HCL had won Rs 230 cr enterprise resource planning (ERP) contract from BSNL. HCL’s mandated surrendering of two contracts may benefit other IT firms like TCS and Mahindra Satyam. For instance, TCS is the second lowest bidder for south zone and west zone while Mahindra Satyam along with Spanco is next to HCL is L2 the East zone. In the West zone, HCL’s had bid amount was for Rs 980 cr, followed by TCS which quoted Rs 906 cr and Spanco/Mahindra Satyam at Rs 1,042 cr. In the East Zone, HCL Infosystems was the lowest bidder at Rs 861 cr followed by Mahindra Satyam/Spanco (Rs 904 cr), TCS (Rs 934 cr) and Prithvi Information (Rs 2,000 cr). In the South Zone, HCL’s bid was of Rs 865 crore, followed by was While TCS’ Mahindra Satyam, Wipro and Infosys bid Rs 906 cr, Rs 1,030 cr, Rs 1,500 cr and Rs 2,000 cr respectively. This IT outsourcing contract is part of BSNL’s 93-million line GSM project worth over $1 b, for procuring network equipment, tower infrastructure and technology solutions and services. The project was split into four zones to allow companies to bid separately for each zone.