The telecom department will shortly move a Cabinet note for payout of Rs 2,700 crore as administrative charges to Bharat Sanchar Nigam, PowerGrid and RailTel, who have been mandated to handle cable laying and trenching responsibilites of the national broadband venture in the 70:15:15 ratio.
Cable laying and trenching is the most expensive piece of the communications ministry's ambitious Rs 21,000-crore national broadband rollout, popularly known as the national optic fibre network or 'NOFN' project, that will take high-speed internet to the hinterlands.
"DoT will seek approval of the Cabinet Committee on Infrastructure (CCI) for inclusion of additional administrative charges in the NOFN project cost since the Telecom Commission has recommended the payout to BSNL, RailTel and PowerGrid to speed up implementation," according to a senior telecom department.
Administrative charges are proposed to be computed at 16.5% of the "estimated work cost," of the NOFN project pegged at a shade over 16,000 crore, the official added. Payout of administrative charges is proposed to help the three state-owned companies meet day-to-day operating expenses linked to the NOFN venture, including manpower deployment and executive staff salaries.
DoT will also seek CCI approval for financing the NOFN venture in three phases, starting with a rollout of high-speed broadband links in 1 lakh gram panchayats (GPs) at an investment of over Rs 11,000 crore by March 2014. The second phase will involve a broadband rollout across another 1 lakh GPs by March 31, 2015 and the final phase, the remaining 50,000 GPs by December 2015. The cost estimates for the second and third stages have not yet been formalised.
Inclusion of administrative charges coupled with the vagaries of a falling rupee are slated to trigger a project cost overrun, but the Telecom Commission has recommended a three-phase rollout to keep costs in check, said another official directly involved in managing the NOFN venture.
DoT is keen to hasten the NOFN rollout as it will be the backbone for creating a rural broadband ecosystem. The communications and rural development ministries have recently agreed to co-finance the delivery of government-to-citizen e-services over the NOFN backbone. The gamut of such community-based broadband services, ranging from e-health, e-education, e-governance to e-commerce across the 2.5 lakh GPs will be delivered by Bharat Broadband Network.