Red-tapism hurting SIs in UP

LUCKNOW: UP-based system integrators (SIs) are having a bad time as the state government has decided to route all the big contracts through organizations like Uttar Pradesh Development Systems Corporation (UPDESCO) and UPTRON. These organizations in turn are taking hefty sums of money as bank guarantee from the SIs for executing orders.

"About a year back UP government issued a Government Order, which said that all the big contracts will be executed under the supervision of organizations like UPDESCO and it is asking for up to 20 percent of the project cost from us as bank guarantee. This is a big problem for us, as it is becoming difficult to arrange large sums to get contracts. Red-tapism by government officials is hurting our normal way of doing business and we request them to mend their ways before it's too late," lamented a leading Lucknow-based SI on condition of anonymity.

The SIs claim that the UP government has signed contracts with UPDESCO and UPTRON to decide on awarding contracts and this has created a situation where the bulk of SI business is controlled by these organizations. "This is not all, even after paying a large sum of money to them, they supply us the equipment at least after eight weeks and this delays everything for us," the SI added.

When contacted UPDESCO MD, Naval Kishore, informed that this has been going on for more than two years and that the policy is being laid out by the UP government. "Everything is crystal clear and we mention all the details about tenders, in our regular advertisements so there is no chance of any misconception. As far as I am concerned, we are taking bank guarantee, because of certain cases where we experienced problems in executing projects, and this has been done in coordination with the government."

With the Prime Minister recently inaugurating the e-learning based Vidya Vahini project, there is a lot of activity in store for Sis, but they are wary of the fact that, all the contracts will be routed through other agencies and this will lead to red-tapism. "Vidya Vahini, is one of the biggest projects in the education sector and there will be a huge opportunity for system integrators like us but with this kind of attitude from the government, we are likely to lose money instead of making," informed a SI.

Sources close to the market also claim that there is a big SI order from UNESCO, to provide at least five computers to each of the primary schools, within the state of UP. But work has not yet started on this front, owing to the fact that large sums of money will have to be shelled out to the government officials to win contracts. "This is a huge order for more than 40,000 systems for the education sector, but very few people are interested in this business opportunity, due to government's uncompromising attitude and heavy investment required for the same," informed a market source close to the government machinery.

The situation for SIs has become quite bad and a number of them are now looking up to AMCs as their only way to survive. "We are solely surviving on AMCs and all the rest just contributes modestly to our revenues," pointed out one prominent SI in the region.

(CNS)