2,000 Cr BSNL-Cisco-Army Scam: The Quint Responds With More Facts

Why did the army first seek dilution of a tender clause but in two months had BSNL retain it, asks The Quint.

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Why did the army first seek dilution of a tender clause but two months later made BSNL retain it? (Photo: <b>The Quint</b>)

Two days after The Quint published a story headlined ‘Exclusive: Army, BSNL, Cisco Allegedly Partner in 2,000 Cr Scam’, the army PRO responded on Friday (see below).

The report pointed to a Rs 2,000 crore scam involving the purchase of IP-MPLS equipment for the Network for Spectrum (NFS) project from the American multinational Cisco via the public sector Bharat Sanchar Nigam Ltd (BSNL).

Documents in the possession of The Quint reveal that BSNL’s tender or request for proposal (RFP) was manipulated in a way that favoured Cisco.

Documents and sources indicate that senior BSNL, army officials and Cisco executives have been the beneficiaries of the Rs 2,000 crore scam, which began during the UPA regime but spilled over after the Modi-led BJP government assumed power in May 2014.

The Quint’s response to the army:

1) It is correct that for all Network for Spectrum projects, it was not the army but Bharat Sanchar Nigam Ltd (BSNL) which was the tendering authority.

2) As for the particular clause (79.3) of the tender, a number of representations – copies of which are available with The Quint – were made by all original equipment manufacturers (OEMs) and bidders who requested that the clause be diluted.

3) Initially, the army’s Directorate of Signals responded to all technical questions which were posed to BSNL for further clarification, in which the NFS cell in its response to the particular clause (among other hundreds of queries) asked for the said clause to be diluted in April 2014, and correctly so in the spirit of wider participation.

4) However, the NFS cell in June/July of 2014, once again wrote to BSNL, this time acting under instructions of its superiors, saying specifically that clause 79.3 not be diluted. Why was only this particular clause singled out to be “retained” among hundreds of others?

This undeniably resulted in a single-vendor situation, while the other potential OEMs – M/S Juniper and M/s ALU – had submitted representations to both the Directorate of Signals and BSNL, requesting that the clause be diluted. But this request was summarily rejected.

5) What had suddenly happened within two months that the particular clause was described as necessary and “operational requirement” was cited?

6) The Quint has spoken to knowledgeable sources familiar with the Rs 2,000 crore deal. These sources asserted that “typically, the architecture of the network sought by the army, through BSNL, the functionality asked vide the said clause will not even be used.”

7) The Quint has information on who in the army’s Directorate of Signals, BSNL and Cisco has benefited from the scam, but is withholding publishing names at this juncture for legal reasons.

8) What prevented the army from responding to The Quint’s questionnaire sent to Lt General AR Prasad, Director-General of the Directorate of Signals? The army’s so-called rebuttal is an attempt to obfuscate and deflect attention from the core issue: One or more of its senior officers acted in ways to bend the deal to their advantage.

Also Read: Exclusive: Army, BSNL, Cisco Allegedly Partner in 2,000 Cr Scam

Army’s Response


1.   Please refer Article ‘Exclusive: Army, BSNL, CISCO Allegedly Partner in 2,000 Cr Scam’ by Mr Chandan Nandy posted on the online news site on 28 December 2016.

2.   As regards the allegations levelled and insinuations made against the Army and its officers in the report, the following are clarified:-

(a)   The role of Army (as also of other Services) in the NFS project, has only been to define the ‘user requirements’.  It is not the contracting agency.

(b)   The specific clause 79.3 of  the RFP relates to technical specifications of a component in the NFS project. Post issue of RFP, during the pre-bidding stage, a number of vendors interpreted the technical specifications as being ‘too restrictive’ which may not enable wider participation of vendors. To clarify the issue, the text was amended to read that the specification should be ‘G.709-10h’ compliant as per ITU-T standards (International Telecom Union – Telecommunication standards). This being the global standards and acceptable to vendors, was communicated to BSNL and vendors in June-July 2014. This was also posted along with responses to other pre-bid queries, by BSNL on its website. There were no further queries or objections on this issue (Para 79.3 of RFP) from any vendor till the completion of the bidding process and subsequent opening of the bids.

(c)   It would thus be seen that the communication of June- July 2014 only removed scope of misinterpretation or its restrictive nature as pointed out by vendors. It made the specifications generic and aligned to global standards. It should, in no way, be construed as ‘connivance’ or ‘a cover to pave for scam’ as alleged in the report.

3.   In light of the foregoing, the following are requested:-

(a)   Queries on Army related issues be directed to the PRO (Army) for timely and correct response.

(b)   Reports relating to Indian Army may only be filed/ published after due verification, lest they result in ‘misinformation’.

  (Rohan Anand)


  PRO (Army)


(At The Quint, we are answerable only to our audience. Play an active role in shaping our journalism by becoming a member. Because the truth is worth it.)

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