In March 2018, Indian Railways issued a tender through Railtel India to supply mobile connections under CUG (Closed User Group) to around 3.78 lakh Railways employees across the nation.
Railways is currently using CUG mobile connections from Bharti Airtel, but the current contract will expire on 31 December 2018. A Railway Board order dated 20 November 2018 announced that Reliance Jio had won the contract to implement the new CUG which would be effective from 1 January 2019.
On 30 November, the official Twitter handle of Congress tweeted a news article alleging that Reliance Jio had violated the tender norms. Congress further claimed that only PM Modi’s ‘friends’ are doing well in this economy.
.@reliancejiowins RailTel contract inspite of allegations against them for violating tender norms.
— Congress (@INCIndia) November 30, 2018
A similar insinuation was made by a pro-Congress Twitter user @sidmtweets
After squandering ONGC’s profits in favour of Reliance,Piyush Goyal is using Railways to profit Reliance ?
First Reliance,instead of IOCL, gets contract to supply oil to Railways
Now Reliance,instead of BSNL, gets contract to supply SIM cards to Railways
— Sid (@sidmtweets) November 29, 2018
The article quoted by Congress has been published by a portal News Central 24×7 which was previously caught spreading fake news. The said article, in turn, quotes another article published by The Indian Express to insinuate that Reliance Jio had violated the tender norms. The Indian Express claims:
The contentious clause, a new introduction in the tender process this time, stipulates that “the rates across different plans will not vary more than 50 per cent of minimum data rates quoted in any of the plan.” Sources said some bidders have alleged that the condition restricted their pricing offer while the same did not seem to have been applied on Jio—an allegation the company has denied.
The Indian Express further claims that Bharti Airtel, which was one of the bidders, had highlighted this alleged violation by Jio:
Airtel submitted the second lowest financial bid of Rs 3.37 crore per month excluding taxes, whereas Jio’s offer was for Rs 2.92 crore per month. Sources in RailTel said that Airtel has highlighted the fact that Jio’s top plan for 60 GB data, which is offered for Rs 125, is 86 per cent costlier than its 30 GB plan offered at Rs 67 per month. When contacted, Bharti Airtel declined to comment.
According to this claim, Airtel has claimed violation by Jio because the highest tariff offered is 86% more than the lowest tariff. However, this conclusion is not correct, as we explain below.
OpIndia accessed the tender document to understand this so-called “contentious clause”, which has been mentioned in Appendix B of the document. The appendix contains specifications of four different mobile plans required by Railways. One of them is for bulk SMS while the remaining three are to be used by Railways employees.
It should be noted that Railways required that all the plans must offer unlimited voice calling, roaming and 100 SMS per day for free. The only difference in the plans is the amount of data bundled in the plan.
As highlighted above, the clause says, “the rates across different plans will not very (sic) more than 50% of minimum data rates quoted in any of the plans”. By definition, ‘rate’ is always per unit. Thus the term ‘data rates’ means the price per GB of data, i.e. the correct interpretation of the clause is that the difference in the highest and lowest prices per GB of data (across different plans) should not be more than 50% of the lowest price per GB quoted in the plans.
Hence, Airtel’s interpretation of the clause, as claimed by The Indian Express, is wrong as they compare monthly tariffs instead of data rates (price per GB). This is further validated from the sample calculations given in section 3.6.1 of the tender document, wherein the difference between the highest and lowest tariffs is much more than 50%.
In Jio’s case, the lowest price per GB of data has been offered in the 60 GB plan, while the highest price per GB has been offered in the 30 GB plan. More importantly, the price highest price variation is 15% of the lowest price, which is compliant with the clause explained above.
OpIndia also accessed RailTel’s responses to the clarifications sought by the tender respondents (Airtel, Vodafone, Jio and BSNL). Interestingly, the only operator which sought more clarification about the rate variation clause was Reliance Jio.
This begs the question: if Airtel had any doubts about the meaning of that clause, why did they not seek more clarification from RailTel? Or did The Indian Express invent ‘sources’ who claimed that Airtel had alleged violation by Jio?