Chinese cables for KFON project flouting norms, reveals audit

Even the quality of cables supplied by a Korean company named LS Cable & System for the Kerala Fibre Optic Network (KFON) project was also tested in China. Photo: File Image

Thiruvananthapuram: The ongoing audit of the Kerala Fibre Optic Network (KFON) project has revealed a likely security lapse arising from breach of norms envisaging use of domestic cables.

The tender condition that only equipment designed, manufactured, tested, and bought from Indian manufacturers should be used for the high-speed internet project has been flouted as the promoter Kerala State IT Infrastructure Limited (KSITIL) used the China-origin cables, ignoring the concerns expressed by the Kerala State Electricity Board (KSEB).

Even the quality of cables supplied by a Korean company named LS Cable & System for the Kerala Fibre Optic Network (KFON) project was also tested in China.

The result of the test done at the National Centre Lab in Shanghai, China, was accepted by the authorities here even though there is a condition in the tender that the quality test too should be conducted in India.

Audit report awaited

The auditor has asked the KSITIL for clarifications. The audit has been going on for the past four months. The audit report will be prepared only after the response is received.

The KSITIL reportedly thwarted the bid of a technical committee of the KSEB for scrutiny. (The KSEB and the KSITIL have 49% share each in the KFON project.)

During the ongoing auditing, the KSEB stated that it had come to know that the cables were of Chinese origin very late and that it had informed KSITIL of the “high risk” involved in using the product.

It is apparent the KSEB had to buckle under pressure from the KSITIL, but the former had raised objections to the LS Cable company encashing the bill. The company has not been paid the entire amount of the bill even two years after supplying the cables.

The cable delivered by the firm has been laid for about 2,600 km.

Tender conditions

According to the tender conditions, a Factory Acceptance Test (FAT) that is to be conducted in the plant that manufactures the product is mandatory. However, since the key component was manufactured in China, this could not be carried out. The objection raised by the KSEB was that merely testing the product, without carrying out an examination of the manufacturing process, would not help to ensure the quality of the cable.

It was also pointed out that the laboratory should be chosen only after ensuring that the institution had the expertise to test for all the quality standards as mandated in the tender. But, the KSITIL approved the documents submitted by Bell Consortium, the contractors, certifying that the laboratory in China had the necessary expertise to conduct all the required tests.

KSITIL defence

The KSITIL argued that since the Korean company, LS Cable, had been registered in India and had a plant in the country, it could be considered as an Indian manufacturer. The strange argument that only the manufacturing plant need to be situated in India was put forward when the tender condition states that the cable should be bought from only Indian manufacturers.

Indian stake below the limit

The Central government’s guideline is that if there is uncertainty about the Indian stake in the cable, the Telecommunications Engineering Centre under the Union Ministry of Telecommunications or the auditor approved by it should be consulted. The KSITIL did not do this, and on the contrary, accepted the claim of the distribution company that the component would be an Indian product if it has 55% Indian share.

According to the notification issued by the Union Ministry of Power, New & Renewable Energy, in order for the optical ground wire cable (OPGW) of Chinese origin to become an Indian product, it should have 60% Indian stake. According to the documents submitted by the LS Cable company, it has only 58% Indian share. To add to this, no expert committee has examined even this claim.  

Chinese components used in KFON cables, says CM's aide

Meanwhile, the Chief Minister’s Office has admitted that the Optical Ground Wire cables indeed comprised Chinese components. The project tender floated by the authorities stipulated the strict usage of only those products under the ‘Make In India’ programme that are designed, manufactured, and tested in India.

The optical unit that constituted the core of the OPGW (Optical Ground Wire) cables supplied by the Haryana-based LS Cable company was imported from China. However, the finished optical cable product was manufactured in the factory of LS Cable, K K Ragesh, Private Secretary to Chief Minister, noted in his Facebook post in the wake of the controversy.

He further argued that it was due to “ignorance” that certain people think the product of being poor in quality when they hear the word ‘Chinese’.

The official justified the import of the components, citing a notification issued by the Union Telecom Ministry in 2018 which suggested that an optical cable product could be regarded as part of the ‘Make In India’ programme if it contained 55 percent of components made within the country. The LS Cable too cited the same while delivering the product to KFON.

However, the notification was issued with regard to Optic Fiber Cable only and the Centre hadn’t formed any criteria during the purchase of the OPGW cables. The LS Cable used the same argument and claimed it had adhered to the provisions. The CMO too is raising the argument that was already rejected by project partner Kerala State Electricity Board (KSEB).

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