 |
|
The Comptroller and Auditor General (CAG) has brought to light significant financial irregularities within Bharat Sanchar Nigam Ltd (BSNL), revealing a staggering loss of Rs1,757.76 crore due to the failure to properly bill Reliance Jio Infocomm Ltd (RJIL) for the utilization of BSNL's shared passive infrastructure. This revelation, detailed in a recent CAG audit report tabled in Parliament, underscores systemic issues within the Department of Telecommunications (DoT) and the Ministry of Electronics and Information Technology (MeitY), particularly regarding revenue assessment and enforcement of contractual agreements. The core of the issue lies in BSNL's inability to enforce the master service agreement (MSA) with Reliance Jio, which stipulated charges for additional technology deployed on BSNL's infrastructure. This oversight, spanning from May 2014 to March 2024, has resulted in substantial financial losses for the state-run telecom operator and, consequently, the government exchequer. The MSA, signed in May 2014, allowed Reliance Jio to share BSNL's passive infrastructure across the country for a period of 15 years. According to the agreement, a specific configuration of antennae, remote radio heads (RRH), and base transceiver station (BTS) slots were permitted on ground base towers (GBT) and rooftop towers (RTT). However, a crucial point of contention arose regarding the implementation of frequency division duplexing (FDD) and time division duplex (TDD) technologies. BSNL's corporate office clarified in January 2019 that these were distinct technologies, and any additional implementation of either would necessitate additional charges, as per clause 1.6 (ii) schedule 3 of MSA, which stipulated a 70% additional charge. Despite conveying this clarification to Reliance Jio in February 2019, discrepancies in billing and payment ensued. While some BSNL circles initially raised invoices reflecting the additional charges between March and August 2019, this practice was abruptly halted under instructions from BSNL's corporate office. Reliance Jio, on the other hand, contested the additional charges, arguing that FDD and TDD were simply alternative transmission modes within the same long-term evolution (LTE) or 4G technology. This disagreement led to a stalemate, with Reliance Jio refusing to pay the bills issued between April and September 2019.
The CAG report further criticizes BSNL's corporate office for its failure to pursue available arbitration options as stipulated in the MSA. The absence of proactive measures to recover legitimate dues from Reliance Jio exacerbated the financial losses incurred by BSNL. A committee formed in August 2020 to address the issue took over three years to finalize its recommendations in October 2023, further delaying the resolution of the dispute. Even after the committee's recommendations, Reliance Jio has yet to accept the proposed composite rates. The report highlights that only four out of 23 BSNL circles raised bills at the rate recommended by the committee, and these bills were subsequently rejected by Reliance Jio. This situation underscores a significant failure in enforcing the tariff clause within the MSA, resulting in continued non-billing and a revenue loss of Rs1,757.76 crore to BSNL. Beyond the billing dispute with Reliance Jio, the CAG report identifies additional financial irregularities stemming from BSNL's operational practices. The auditor observed that BSNL had not applied annual escalation charges to infrastructure sharing billings to Reliance Jio from 2015-16 to 2023-24. Upon being brought to the attention of BSNL by CAG, BSNL raised invoices and recovered Rs15.87 crore. These findings indicate a lack of diligence in adhering to established billing procedures, further contributing to revenue shortfalls. Moreover, the report sheds light on deficient planning within BSNL, leading to injudicious procurement of higher-size polyethylene insulated jelly filled (PIJF) underground cables. Due to a deviation from the provisions of its own procurement manual, BSNL procured excessive quantities of these cables, resulting in Rs80.64 crore worth of cables remaining unutilized, rendering the expenditure unproductive. This highlights inefficiencies in procurement processes and a lack of alignment between procurement decisions and actual operational needs.
In addition to these issues, the CAG report reveals that BSNL failed to deduct the share of license fees from the revenue share paid to telecom infrastructure providers (TIPs) in 22 out of 28 circles, violating the conditions laid down in the agreement. This lapse resulted in a loss of Rs38.36 crore for the period 2019-20 to 2021-22. This failure underscores the lack of adherence to established financial protocols and internal control weaknesses within BSNL's operations. The cumulative effect of these financial irregularities paints a concerning picture of BSNL's operational and financial management. As of March 2023, the Union government's investment in BSNL stood at Rs38,886.44 crore. While BSNL's total revenues for FY22-23 amounted to Rs20,698.90 crore, the company incurred losses of Rs6,662.20 crore. The report acknowledges that the decrease in losses during FY22-23 was primarily attributable to a reduction in employee benefit expenses and an increase in cellular income. Despite these improvements, the overall financial situation remains precarious, highlighting the need for significant reforms and improved financial management practices. The CAG report notes that BSNL's revenues from operations have grown from Rs17,761 crore in FY18-19 to Rs19,128 crore in FY22-23, registering a growth rate of 7.7%. This growth is attributed to the implementation of a revival package of Rs3.2 lakh crore by the Union government. However, the persistent financial irregularities and operational inefficiencies underscore the need for a more comprehensive and effective strategy to ensure BSNL's long-term viability and financial sustainability.
In conclusion, the CAG's findings reveal a complex web of financial mismanagement, contractual lapses, and operational inefficiencies within BSNL. The failure to properly bill Reliance Jio for the utilization of BSNL's shared infrastructure represents a significant loss of revenue, compounded by the lack of proactive measures to enforce contractual agreements. Deficient planning and non-compliance with established financial protocols have further exacerbated BSNL's financial woes. While government intervention through revival packages has provided some relief, the underlying issues require urgent attention and comprehensive reforms. Addressing these challenges will necessitate strengthening internal controls, improving procurement practices, enforcing contractual obligations, and fostering a culture of financial accountability within BSNL. Only through these measures can BSNL effectively leverage its infrastructure and resources to achieve long-term financial sustainability and contribute meaningfully to India's telecom sector. The implications of the CAG report extend beyond BSNL, raising broader concerns about the oversight and management of public sector enterprises in India. The report underscores the need for greater transparency, accountability, and adherence to established financial protocols in the operations of state-owned entities. Effective oversight mechanisms and robust internal control systems are essential to prevent financial irregularities and ensure the efficient utilization of public funds. Furthermore, the report highlights the importance of proactive contract management and dispute resolution mechanisms to protect the financial interests of public sector enterprises. The government must take decisive action to address the issues raised in the CAG report and implement comprehensive reforms to improve the governance and financial management of BSNL and other state-owned enterprises. This will not only safeguard public funds but also enhance the efficiency and competitiveness of these entities, enabling them to contribute more effectively to India's economic development.
Source: BSNL Lost Rs1,757 Crore by Not Billing Reliance Jio for 10 Years: CAG