bharatnet-project-tender-invited-for-public-private-partnership

Context: Bharat Broadband Network Limited (BBNL), on behalf of the Department of Telecommunication, (the “Authority”) has invited a global tender for the Development (Creation, Upgradation, Operation & Maintenance and Utilisation) of BharatNet through the Public-Private Partnership model.

Background:

  • The BharatNet project, which initially began as the National Optical Fibre Network in October 2011, has faced multiple problems to date, with several missed deadlines.
  • In January 2020 a media reported that the panchayat internet connectivity scheme floundering at the last mile due to: 
    • The failure of the implementation agencies. 
  • The Department of Telecommunications (DoT) had been looking to rope in the private sector to complete the pending projects under Phase 1 and 2 of BharatNet.
  • The PPP model had then been suggested by government think-tank Niti Aayog as well as the Ministry of Electronics and Information Technology (MeitY).
  • In March 2020, the government once again pushed the deadline for completion of BharatNet Phase 1 and 2 to August 2021. 
  • As of September 2020, work on BharatNet had either completely stopped or was going very slow in as many as eight states, including: 
    • Andhra Pradesh, Gujarat, Telangana, Odisha and Tamil Nadu. 
    • Most of these states had then written to the DoT highlighting the lack of workers to dig trenches and lay down optical fibre due to the lockdown.
  • Recently, according to the Telecom Ministry, 
    • It will be extended to all inhabited villages beyond the gram panchayats in 16 States i.e., 
    • Kerala, Karnataka, Rajasthan, Himachal Pradesh, Punjab, Haryana, Uttar Pradesh, Madhya Pradesh, West Bengal, Assam, Meghalaya, Manipur, Mizoram, Tripura, Nagaland and Arunachal Pradesh.
    • The Cabinet has in-principle approved implementation of BharatNet in 16 States in a public-private partnership model with a total expense of ₹29,430 crores.
    • The Government of India will only spend the viability gap fund of ₹19,041 crores.
    • An estimated 3.61 lakh villages, including gram panchayats, would be covered via BharatNet.
    • The revised strategy will include; 
      • Creation, 
      • Upgrading, 
      • Operation, 
      • Maintenance and 
      • Utilisation 

Of BharatNet by the concessionaire or the private sector partner, who will be selected by a competitive international bidding process.

  • The private sector partner is expected to bring an equity investment and raise resources towards capital expenditure and for operation and maintenance of the network.

Benefits of Extension:

  • Extension of BharatNet to all inhabited villages will enable better access to 
    • E-services offered by various governments, 
    • Enable online education, 
    • Telemedicine, 
    • Skill development, 
    • E-commerce and 
    • Other applications of broadband.
  • It would help bridge the digital divide.

The slowdown in the Project:

  • As of 25 June, 2021 a total of only 1,56,833 gram panchayats, excluding block headquarters, were service ready whereas the internet connectivity service was opened only in 1,50,744 gram panchayats.
    • Of the total, 1,18,635 gram panchayats had been made service ready under phase one of BharatNet, while only 34,689 have been made service ready under phase two of the scheme.
  • Parameter for marking any Grampanchayat service ready:
    • A gram panchayat is considered service ready when it is connected to the main grid of the internet of the block headquarters of that area. 
    • Whereas the internet connectivity in that gram panchayat is considered open only if there are end users connected to the internet grid.
  • Delays:
    • The government had aimed at connecting all the 2.5 lakh gram panchayats in the country with high speed optical fibre-enabled broadband by 2019. 
    • Under phase one, 1 lakh gram panchayats were supposed to be connected to the internet via high-speed optical fibre by 2019.n
    • Another 1.5 lakh were to be connected under phase two by March 2020.
    • In March 2020, the deadline for both the phases was pushed back by 17 months to August 2021.
    • Later in September 2020, the government said the timeline for the completion of phase two of BharatNet would now have to be pushed beyond August 2021 due to COVID-19 restrictions.

More in the news:

  • Recently, tender invitation is done through the Public-Private Partnership model in 9 separate packages across 16 states for a concession period of 30 years. 
  • Under this project, the government will provide a maximum grant of Rs. 19041 Crore as Viability Gap Funding.
  • The existing BharatNet was connecting all the Gram Panchayats (GPs) of the country by laying OFC (primarily) between Block and GPs. 
  • The scope of BharatNet has now been enhanced to connect all the Inhabited Villages of the country, approx. 6.43 lakhs (inclusive of GPs).
  • The scope of work under the BharatNet PPP Project includes:
    • Connecting the remaining unconnected GPs under the BharatNet project (Phase 1 & Phase 2) and all the inhabited Villages beyond the GPs.
    • Upgradation of the existing BharatNet Network from Linear to a Ring topology.
    • Operation and Maintenance (O&M) and Utilisation of the existing as well as the newly deployed network.
  • The project will be executed through a Design, Build, Finance, Operate & Transfer (DBFOT) concession on the PPP framework. 
  • The idea is to harness the private sector’s capability, capacity, and efficiency for O&M, utilization and revenue generation to make BharatNet more effective and accessible. 
    • This would also serve the objective of BharatNet to have social inclusion, through effective delivery of Govt. schemes and citizen-centric services using broadband, and also to strengthen e-Governance, e-Education, Telemedicine, e-Banking etc.

Related Facts:

BharatNet:

  • Started in 2011, was originally named National Optical Fibre Network or NOFN. 
  • Financed by the Universal Service Obligation Fund of the Department of Telecommunications, through a 5 percent levy on the revenues of private telecom service providers. 
  • The project’s primary objective is to extend fibre connectivity to every panchayat, thereby providing access to broadband internet services to 69 percent of India’s rural population.
  • Phase I of BharatNet: Commenced in 2014, was completed in 2017. It has over-achieved the 1 lakh target for this phase by covering 1,22,908 panchayats. 
  • Phase II: In the second phase, the remaining 1,29,827 gram panchayats are to be covered through 5 km of new fibre per gram panchayats. 
    • This phase incorporates a mix of both underground and aerial fibre as well as radio and satellite connectivity to reach more inaccessible locations such as Jammu and Kashmir, Northeast, Himachal Pradesh and Uttarakhand.

Viability Gap Funding:

  • Viability Gap Finance means a grant to support projects that are economically justified but not financially viable.
  • The scheme is designed as a Plan Scheme to be administered by the Ministry of Finance and the amount in the budget is made on a year-to-year basis.
  • Such a grant under VGF is provided as a capital subsidy to attract the private sector players to participate in PPP projects that are otherwise financially unviable.
  • Projects may not be commercially viable because of the long gestation period and small revenue flows in future.
  • The VGF scheme was launched in 2004 to support projects that come under Public-Private Partnerships.

About Bharat Broadband Network Limited (BBNL):

  • It is a Special Purpose Vehicle set up by the Government of India under the Companies Act, 1956 with an authorized capital of ₹1000 crore.
  • It comes under the Ministry of Communications and Information Technology.
  • In 2011, it was mandated to create the National Optical Fiber Network (NOFN) in India which was later renamed as the BharatNet project in 2015.

About Linear topology:

  • A linear topology is a network topology consisting of a main run of cable with a terminator at each end. 
  • All nodes (file server, workstations, and peripherals) are connected to the linear cable. 
  • Ethernet and LocalTalk networks use a linear bus topology.

About Ring topology:

  • A ring topology is a network configuration where device connections create a circular data path. 
  • Each networked device is connected to two others, like points on a circle. Together, devices in a ring topology are referred to as a ring network. 
  • In a ring network, packets of data travel from one device to the next until they reach their destination.
  • Others permit data to move in either direction, called bidirectional.
  • Advantages:
    • All data flows in one direction, reducing the chance of packet collisions.
    • A network server is not needed to control network connectivity between each workstation.
  • The major disadvantage of a ring topology is that if any individual connection in the ring is broken, the entire network is affected.
  • Ring topologies may be used in either LANs (local area networks) or WANs (wide area networks).

About Design, Build, Finance, Operate & Transfer (DBFOT):

  • It is a project delivery method which involves Designing and Building the infrastructure, Operating them for a specific time period and Transferring the ownership of the project to the Government after a specific time frame.
  • Project duration is long term (Say 20-30 Years).
  • Responsibility for construction (typically greenfield) and operations with the private partner while ownership is retained by the public sector.
  • Gives High Tariff revenue.

Source:https://www.pib.gov.in/PressReleasePage.aspx?PRID=1737325