The end of Sankhya Vahini

Print edition : November 24, 2001

The Sankhya Vahini project, conceived to provide India a high bandwidth Internet backbone, is shelved two years after a deal was struck with IUNet.

AFTER being in a state of suspended animation for nearly two years, Sankhya Vahini, the much-touted communication project to provide a high-speed data transmission backbone over a 10,000 km of optical fibre network, was pronounced dead on November 5. Conceived as a Rs.1,300-crore collaborative venture between the Department of Telecommunications (now Bharat Sanchar Nigam Ltd. after DoT's corporatisation) and IUNet Inc., a wholly owned subsidiary of Carnegie Mellon University (CMU), Pittsburgh, United States, the project never took off the ground in spite of the Cabinet approval accorded to it in January 2000 (Frontline, June 9, 2000).

The proposal for a high-speed - 2.5 gigabits per sec (Gbps) in the first phase, to be upgraded to 40 Gbps in the second phase - was based on a decision of the National IT Task Force taken on September 5, 1998, following presentations about the idea at various levels since 1994 by V.S. Arunachalam, former Scientific Adviser to the Defence Minister and currently a Distinguished Services Professor at CMU, and Raj Reddy, an Alan Turing Award winning professor of computer science at CMU. They are both promoters of IUNet (short for inter-university network); Arunachalam is the company's president. The IT Task Force's decision was followed by the signing of a memorandum of understanding between CMU and DoT on October 16,1998, the drafting of the joint venture agreement (JVA) on August 28, 1999, the formulation of a jointly worked out Technical and Business Plan (T&BP) in January 1999, the final Cabinet approval on January 19, 2000, and the approval of budgetary funding by the Telecom Commission in June 2000.

The project was to be executed by an Indian company Sankhya Vahini India Ltd (SVIL), in which the equity of the CMU and that of the government were both limited to 49 per cent. According to the JVA, equity participation among the various entities with a stake in the project - CMU, DoT, institutions such as the Indian Institute of Science (IISc), Bangalore, the Indian Institute of Information Technology, Hyderabad and the Indian Institutes of Technology (IITs) under the Human Resource Development Ministry and the Ministry of Information Technology - was intended to be in the ratio 49:45:4:2. (Educational institutions do not form part of the government and thus this equity ration limited the government stake to less than 49 per cent. That is, even if the shares of the educational institutions were offloaded, the government could have picked up a maximum of only half of those. The limits were in accordance with a resolution of the Telecom Commission that forbade the creation of a public sector undertaking for telecom services.) The initial paid-up capital was pegged at Rs.300 crores and the rest was proposed to be raised from the market. The equity share of DoT was to be offset against a third-party evaluation of a pair of 10,000 km of dark fibre to be leased to SVIL and that of IUNet was to be offset against the cost of equipment to be selected, purchased and supplied by IUNet.

While the project was stalled soon after the Cabinet approval owing to political opposition and conflict between the Ministry of Information Technology and DoT, prolonged litigation after a public interest petition was filed in the Delhi High Court by a non-governmental body called Telecom Watchdog, comprising professionals from the fields of finance, business and telecommunications, ensured Sankhya Vahini's end. Although the government, as one of the respondents to the petition, routinely filed counter-affidavits to the main petition, its counsel, Attorney-General Harish Salve, did not appear in court. As a result, although the case had been posted for hearing almost once every six weeks since the petition was filed in July 2000, the proceedings were adjourned each time even as affidavits and counter-affidavits piled up.

ACCORDING to observers, the appointment of the Attorney-General to present its defence would normally imply that the government meant to fight the case seriously. In this case, however, although the project had the blessings at the Prime Minister's Office, the inaction on the part of the government in fighting the case was surprising, to say the least. This duplicity in the government stand is also evident from the fact that SVIL was not registered as a company although the court had at no time restrained it from doing so. Even the simple exercise of reframing the JVA to reflect the creation of BSNL (in place of DoT) was not taken up. What political compulsions dictated this kind of response to the project from the government, after having backed it with great enthusiasm early on, cannot be gainsaid although the Bharatiya Mazdoor Sangh (BMS), a constituent of the Sangh Parivar, was the first to queer the pitch against the project. Pramod Mahajan, Minister for Information Technology, fuelled the controversy by expressing openly his opposition to the project.

Mahajan, however, later took the stand that the project would be acceptable if some elements of the JVA were rewritten, perhaps following directives from the PMO. Significantly, Mahajan is also the Minister for Commu-nications, which initialled the JVA, and may be happy that Sankhya Vahini did not take off. Some significant chan-ges concerning "IUNet's Obligations" had been made in the final version of the JVA in the wake of questions raised about vesting with IUNet complete control over the technologies to be used.

On October 17 Arunachalam wrote to Shyamal Ghosh, Chairman, Telecom Commission, stating that the IUNet Board and CMU had decided to withdraw from the Sankhya Vahini project. "Even almost two years after the Cabinet approval, the project has not been sanctioned. Two years in IT is considered a lifetime," Arunachalam said in his letter, a copy of which had apparently been forwarded to the Prime Minister who, in his words, had spiritedly defended the project. "Similar projects in other parts of the world, that were not even on the drawing board when we made our original proposal, are now in commercial operation and are being upgraded to higher performance levels," the letter stated.

"IUNet, the university and the potential investors for this project are now reluctant to invest any more of their resources in this project... The so-called PIL (Public Interest Litigation) against the project and the continuing adjournments in the courtroom for more than a year, often because of the absence of the government lawyer, has not encouraged us either," Arunachalam said. According to informed sources, for every announced hearing date in the case, Arunachalam and Raj Reddy, as respondents, incurred enormous expenditure, which included Rs.1 lakh for every appearance by their lawyer. "The Board has also noted that DoT has not moved forward in its collaboration with IUNet in spite of the learned counsel's observation that they had not granted a stay order, and that there was nothing binding against the government going ahead with the project," the letter said.

"In our enthusiasm to share the latest technologies with India and make it one of the pioneer users of very large bandwidth, we underestimated the many difficulties that were on the path. Buoyed up by CMU's readiness to work with Indian collaborators and the willingness of many respectable investors to share the risks and excitement with us, we ignored the advice of many who warned us of hurdles of collaborating with Indian public sector institutions," the letter added.

In the wake of the withdrawal of IUNet and CMU from the project, the court sought a fresh response to the PIL from the government and posted the petition for hearing on November 5. The government did not file an affidavit although a proper response demanded that. Instead it issued a one-line statement saying that in the wake of CMU's withdrawal, it too was pulling out of the project. BSNL too issued a one-line statement saying that it will not proceed to register SVIL.

Telecom Watchdog, on the other hand, has stated that it will not press for the reliefs it had sought in the writ petition. The spokesman of Telecom Watchdog said that the organisation had not withdrawn the case. Interestingly the petitioner has not pressed for reliefs because three of the six pleas made in the petition included a direction from the court to the government to make its policies on providing high-speed backbone infrastructure clear.

The petition had sought a court directive to the government to carry out the expansion of the existing Ernet project and implement the proposed Sanchar Sagar project in full. It also wanted the court to direct the government to give a time-bound plan in respect of a long-term National Information and Technology Policy. Thirdly, it wanted the government to give a time-bound plan to improve the "last-mile connection" to the consumers.

Since none of these involves IUNet or CMU, it was thought that the petitioner would demand an affidavit from the government to clarify these issues. But these reliefs have not be insisted upon. This is particularly surprising because after IUNet's withdrawal, Pramod Mahajan stated that the government would implement the project on its own and that it was looking for a private partner. It is known that corporate houses such as Reliance and the Hindujas have evinced interest in getting into the business of building national-level Internet backbone infrastructure; Reliance is already laying optical fibre cable across the country.

The Minister's statement should, however, be seen in the light of the April 17 affidavit in response to the PIL by V. Sampath Kumar, deponent for the government. It said:

"The National Internet Backbone (NIB) is not for broad banding which is the main objective of the proposed SVIL. It may be stated that NIB is only a project for providing Internet connections to Indian householders and to the customers of BSNL. The NIB itself can be a subset of Sankhya Vahini...

"Sanchar Sagar I is a project of DoT for infrastructure with a capacity of 2.5 Gbps covering 150 cities in the country... It is proposed to provide connection of 20 Gbps on the New Delhi-Mumbai route by September 2001 under Sanchar Sagar II. However, the technology for this proposed project is yet to be procured and is also unavailable within the country. This technology would also have to be procured from some leading technology provider in the world, as DoT is in the process of doing the same from CMU with respect to broadband networking. It may also be stated that one other difference between Sanchar Sagar and the proposed SVIL is that under the Sanchar Sagar project individual connections to the customers cannot be given which will be possible in the SVIL project. SVIL can also provide 'bandwidth on demand' and not a dedicated bandwidth which results in great savings for the consumers and to the country."

An upshot of the developments is that customers, particularly educational institutions and Internet service providers, will be at the mercy of the government to get out of the bandwidth bottleneck of the old technology. While there were some elements of concern in the Sankhya Vahini proposal, all of which could have been addressed had the government been sincere about it, its termination may indeed mean that IT and software industry in India will have to run many times faster just to remain in the spot on the world map. Even that may be difficult now with the downtrend in the IT market the world over.

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