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A security threat
In 1998, the BJP-led National Democratic Alliance came to power. It asserted it was committed to swadeshi, also clearly stating that the Indian telecom sector would not be opened to foreign companies other than to strengthen the department of telecommunications and the Videsh Sanchar Nigam Limited.
But it was only after another general election, in 1999, that Pramod Mahajan, minister for information technology realised that the multi-million dollar Sankhya Vahini might have violated many well-guarded norms in the telecom and information technology sectors.
First of all, the project was wrapped in mystery. MIT officials pointed out that Sankhya Vanihi clearly violates the Indian Telegraph Act 1885, the Indian Wireless Act 1933, the National Telecom Policy 1994 and the New Telecom Policy, 1999.
"It is baffling us that the government waived all the rules and regulations and allowed duty-free import of equipment under the Sankhya Vahini project," says a senior MIT official.
Officials insist the Sankhya Vahini deal is riddled with lacunae. Immediately after the cabinet approved the project, DoT Secretary Anil Kumar was shifted out of the department. Officials say Kumar, who signed the MoU on behalf of the DoT, had also raised many objections to the project. Kumar apparently rejected a proposal from Carnegie Mellon University that 1000 acres of land be made available near New Delhi for the Sankhya Vahini headquarters.
Communist Party of India-Marxist MP Niloptal Basu says the Sankhya Vahini network will virtually kill India's established Internet and telecom backbone provider, Videsh Sanchar Nigam Limited.
"How come that the BJP which never misses an opportunity to talk about its swadeshi policy has forgotten all about it in Sankhya Vahini," asks Basu. He says the project clearly violates the National Telecom Policy, which insists that all calls originating or terminating in India will pass through the VSNL gateway and it has the duty to monitor all Indian private gateways.
"Sankhya Vahini has not only violated the telecom rules, but has the capacity to infringe upon the security of the country," the CPI-M MP says. "For instance, Sankhya Vahini can be a sound platform for the US to intercept India's strategic and scientific secrets," he says.
He says that, in the next session of Parliament, the Opposition will demand a joint parliamentary probe into Sankhya Vahini "as we feel that US companies are trying to take the Indian telecom backbone for a ride in a project of which the benefits are unknown".
MIT secretary Jayakrishnan's one major finding was that IUNet was registered as a company by the Carnegie Mellon University only after the Indian government signed the memorandum of understanding with it on October 16, 1998.
Ministry sources say the government did not take the pains to find out anything about IUNet before entering into a joint venture with the company.
"In fact, the government simply believed whatever Dr Raj Reddy and Dr V S Arunachalam said. Vajpayee must have though that there was nothing to worry about in the project when Chandrababu Naidu is involved in it," a senior ministry official said.
Officials of the ministry of communications are perplexed how the government could permit the DoT-IUNet equity tie-up when the foreign partner is not bringing any investment into the country.
"What IUNet will bring into India is Carnegie Mellon University's technical expertise. But for technological know-how, how can we give away 49 per cent equity," asked an ministry official.
As per the MoU, IUNet will bring in state-of-the-art equipment from global technology vendors like Lucent, Nortel, Sycamore and Cisco to set up the high-speed data network.
RSS leaders say their main objection is not to the concept of Sankhya Vahini but the execution.
"India has to provide land, infrastructure, corridors in all exchanges, initial bandwidth, money and sales promotion. But the foreign partner will control the joint venture project. It sounds ridiculous," says one RSS leader.
The joint venture contract has many loose ends. It does not mention one crucial aspect of the project -- purchase of equipment worth Rs 10 billion. IUNet claims it is responsible for buying the high-end equipment. How is it that the government, which owns 51 per cent equity, does not have any say in the purchase of equipment?
RSS leaders also allege that Sankhya Vahini lacks transparency since the government permitted no competitive international bidding in this case. In fact, sources said, representatives of a few major global telecom companies like the AT&T and Sprint have met the secretaries in the ministries of information technology and communications to ask why no tenders had been invited.
Opponents to the project suggest that Sankhya Vahini got the cabinet approval because the men behind the project are very powerful in government circles.
"It is a clear case of a nexus between Naidu, Reddy and Arunachalam. Had it not been for them, the BJP government would have never gone in for such a project," says a party insider.
BJP leaders allege that Dr Reddy, a member of Clinton's information technology committee, is "an India-born American crony". They say Dr Arunachalam, who headed India's apex Defence Research Development Organisation before opting for greener pastures in the US, has strong contacts in the telecom and bureaucratic circles in India. Behind the duo was the might of the IT-savvy Andhra Pradesh Chief Minister Naidu. Vajpayee immediately approved his demand for a quick sanction for Sankhya Vahini.
Aided by officials in the MIT and the ministry of communications, Mahajan has built up a powerful case against Sankhya Vahini. But Mahajan's ministry holds a minuscule two per cent stake in the venture and therefore can do little unless he can convince the other government players -- among them Communications Minister Ram Vilas Paswan and Human Resources Development Minister Murli Manohar Joshi.
Many believe that, finding the going tough, Mahajan decided to call the RSS for help, thus politicising the issue.
Next: Case for the defense
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