Article_019

Restructuring BTTB

Ataur Rahman
DE. Planning

Introduction:

Bangladesh Telegraph and Telephone Board is the only organization for providing Telecommunication services to the people from the public sector in Bangladesh. Many other organizations are giving the service in the same/similar field in Bangladesh from private sector. BTTB is one of the money earning organization of the Govt. of Bangladesh. This is the oldest organization in the field. But the private sector organizations are developing faster than BTTB. It is noticeable that the most experienced organization has the slowest growth rate. That is why the question of restructuring or reforming or reorganizing has been arisen.

Back Ground for the demand of restructuring:

BTTB has the strongest background of serving the people in the Telecom field. The people of Bangladesh have confidence on BTTB for providing the best services. From this trust of the people, they expect every kind of telecom services from BTTB. That is, the demand of telephone, fax, mobile phone, internet connections, LAN, WAN, etc. services are very much high from BTTB. But BTTB cannot fulfill the demand for the following reasons:

1. BTTB is a Govt. Organization. So, it has to abide by all rules of the Govt. It is beyond question that the faster growth is impossible abiding the Govt. bureaucratic rule.

2. In the Govt. organizations, development programs are run through ADP (Annual Development Program). The budget allocation in ADP has limitations. On the other hand, Bangladesh being a poor country, it has many emergency sectors to develop. So, fulfilling the demand of emergency sectors, the money left for developing telecommunication sector is “quite negligible” to fulfill the demand of the people. With this “quite negligible” allocation in ADP, the growth is also “quite negligible” and almost not “noticeable”.

3. To utilize this negligible allocation in ADP, there is a very long bureaucratic channel to pass through to materialize the development. Obviously, most of the cases, the development programs lose their way into the said “bureaucratic channel” and face the death.

Some stations in the bureaucratic channel for a development project under ADP:

(a) A Project Proforma (PP)/PCP is proposed from the agency, here BTTB. The PP is placed to the ministry, here MOPT.

(b) MOPT (or concerned ministry) checks the PP and sends back it to BTTB (definitely)- sends back suggesting some correction. BTTB corrects according to suggestions of the ministry and again forwarded to MOPT. MOPT again checks it and finds some new things for corrections and sends it back to BTTB. In this way, several times PP moves to and fro. In some cases, the concerned officer in MOPT is transferred and new one comes. He according to himself, checks the PP and put his suggestion for correction and the similar steps are to pass. At last, the MOPT sends the PP to Planning Commission (PC) of the Planning Ministry.

(c). The physical infrastructure wing of the PC checks the PP and sends back to MOPT suggesting some corrections. The MOPT sends it back to BTTB. BTTB corrects it and forwarded to MOPT, then to PC. This process also may takes place more than once. After all, when PC is satisfied then they place it to pre-ECNEC. Many people from different sectors discuss the points relating the interest of their sector and suggest some corrections. In the same channel the PP comes to BTTB and is corrected according to the suggestion and forwarded through the same channel. After all these corrections, the contents of the PP, in most of the cases, become useless to reach the goal for which the PP was proposed. Anyhow, this reformed PP is placed to ECNEC.

(d) ECNEC passes the PP for implementation with some correction.

(e) For implementation of this project, it must be included in the concerned year’s ADP.

(f) If project is included in the ADP, due to limitation in the total volume of ADP (as described earlier), the concerned project never has the allocation required for the project in the concerned year according to PP.

(g) This rationed allocated amount cannot be used if it is not released. The “release” of 1st quarter of the ADP allocation, cannot be got before August 15, of the concerned fiscal year.

(h) The recruitment of the implementation manpower is another problem for timely implementation.

(i) In some of the cases, after overcoming all the steps, it is found that background of the project has been changed, in some cases, the technology become unsuitable and the project does not bring the result expected and cannot reach the goal.

4. The Telecommunication project is very hi-tech project but people working throughout the long “bureaucratic channel” are not educated even informed about the technology and unable to understand the importance of the project.

5. Procurement Procedure: The Govt. is following a complex procurement procedure. This procedure is very much time consuming. The objectives to follow this complex time consuming procedure are:

1. To save public money through competition between the bidders

2. To Enhance quality through competitions to improve service and to protect public interest

3. To prevent corruption

Result of following the complex procedure and policy:

1.      Project implementation is always delayed causing

            (a) Increasing project cost

            (b) Delaying service to the people.

            (c) Increasing sufferings of the people.

            (d) Delaying in revenue earning by selling the service to the people.

            (e) Delaying in development of telecommunications causes the depended development

                of other sectors.

Hence step for saving public money becomes more costly for the public.

2. Best quality among the equipment of the participating bidders can never be assured for getting selection.

3. Bangladesh is experienced of being top most corrupted country by following the procurement procedure.

Hence, the procurement procedure cannot reach its goal.

6. Local private investment in BTTB: Through Telecom bond a very limited private investment was allowed in 266 KL DTI project (the former 200 KL, former 150 KL former 130KL project). Due to lack of flexibility in financial sector of the GOB, due to lack of reforms in the sector and due to reluctant behavior of the bureaucrats to reform the sector, though a bright possibility for in vestment from the people, banking sector and others are prevailing, the opportunity was never allowed to the public telecom sector to flourish and improve the govt. revenue and telecom service to the people. So, (a) a way must be found out to look for and utilize the local investment.

(b)   Bureaucracy: Bureaucracy must be by-passed, in case of investment in telecom sector.

7. Foreign Investment: All the foreign investment in the public sector must come through ERD (Economic Relations Division). ERD works for the whole country and for all the sectors. In front of them many emergency sectors (like health and family planning, food, education, poverty alleviation etc.) and thrust sectors are always present. So they are much more attentive to look for foreign investment in those sectors for practical reasons. On the other hand, the most of the people working there, are not well informed or educated or trained about the impact of telecom field development due to practical reason and structure of the govt. Obviously the development of the sector or hunt for investment in the sector are not properly emphasized. Again, any investment proposed in this sector is treated as similar to other sectors. Comparing with the others sector, they generally refuses the investment proposal in the telecom sector, because,

i. Telecom sector is more profitable and foreign investors are very much cautious to have their own part of profit. But the counterpart (ERD) are not well informed and since the most of the govt. dept. in Bangladesh are loosing, they compare the investment with general case and found the foreign investment in the telecom sector is costly. As a result, in most of the cases the investment proposals are rejected (e.g., supplier’s credit).

ii. Choice of the field for the investors: Investors always choose the field for investment. But since a single body of the govt. is looking after all the fields (ERD), the investment in BTTB is much less than expectation.

So, for investment in BTTB, BTTB should look after the matter.

8. Recruitment: Due to complex recruitment procedure, it is not possible to recruit right persons in right time. After above 13 years of closing of the TSC project, the gazetted posts came under revenue head. During this period, no gazetted officers could be employed against those posts. Officers worked there only on deputation during this long period. For all the projects, the case is similar. So efficiency of the organization and quality of service are difficult to improve under this type of recruitment system.

9. Development of expertisation: Telecommunication is one fast at changing most modern technology. For improving the quality of service, adaptation with the modern technology is necessary. But the training policy of the GOB is not modernized to reach the above goal.

Overcoming all these problems, it impossible to BTTB to achieve faster growth rate and fulfill the demand of the people and improve the service. Hence restructuring of BTTB is felt necessary.

Why not restructured before?

1.      Success of restructuring is never guaranteed.  Without restructuring, govt. is getting a handsome amount in hand from BTTB during making annual budget. If the restructuring fails, the amount will be loosed by the govt. This is a big threat for any govt. of Bangladesh.

2.      On the other hand, the property of BTTB is govt. property. This valuable property may be misused and loosed by the state. The institutional strength in Bangladesh is very poor. Also Bangladesh has earned the topmost position for corruption for consecutive two terms. For these reasons, the possibility of losing state wealth during restructuring vacancy is obvious.

3.      Nearly, 18000 family of poor Bangladesh depend on BTTB. If restructuring fails, then the number will be added to other millions of jobless people.

4.      Success story of restructuring is nearly invisible in Bangladesh. So, restructuring of BTTB will fail to reach the goal and objective can be assumed default.

Considering the above matters, BTTB was not restructured earlier.

Why the question of failure is coming?

The success of restructuring must be depended on some assumptions. The failure to achieve one assumed parameter is sufficient to fail restructuring.

1.      The failure to achieve one or more assumed parameter may occur naturally.

2.      The restructured structure (new structure) may be made intentionally faulty. Because, in restructuring process, any involved people may do this. The possibility is highest, though, the sincerity of the highest authority is beyond question.

3.      Since, the institutionalization of organization is not strong, one ill motivated or unqualified executive may damage the newly restructured organization or may be the cause of failure. The executive of above kind is not seldom found.

So, restructuring may not be a success.

Objectives of Restructuring:

1.      Fulfilling the demand of telecom facility and quality of service to the people

2.      Earning enhanced revenue by the Govt.

Goal of Restructuring:

1.      Unrestricted local Investment

2.      Unrestricted (Chosen by the competent authority) foreign Investment

3.      Development not restricted by the bureaucracy, MOPT, PC, MOF or not hindered by “red-tapism”.

Restructuring Principle

The present socio-economic-political condition, rules of law, corruption scenario etc. if considered, the time is not suitable for Restructuring of BTTB. On the other hand, using the public property (i.e., BTTB) for the sake of the faster growth and best service to the people and to protect the public interest through competition with the private operators, the restructuring is a must. Considering these two conflicting trues, if the govt. has the high ambition, proper commitment and sufficient confidence to be successful in restructuring BTTB, the following principles may be followed:

1. Revolutionary change should not be adopted.

2. The points of hindrances to local and foreign investment flow in telecom sector as described earlier can be verified and measures should be taken to overcome them.

3. The points of hindrances to take and implement development project as described earlier can be verified and measures should be taken to overcome them.

Before suggesting specific restructuring steps, the summary of problem can be highlighted as:

Summary of Problems:

The problems described earlier can be summarised as:

1.      Fund: a) Limitation of fund

           b) Bureaucracy in allocation and releasing fund

2.      Receiving Investment

3.      Bureaucracy in approving project

4.      Bureaucracy in procurement

5.      Bureaucracy in creating post

Summary Actions:

Summary actions to be taken to overcome the problems are:

1.      BTTB Account: One independent “BTTB Account” should be created

2.      Decision Making Body: One high powered decision making body should be formed

3.      Investment Wing: One wing under BTTB for seeking investment should be formed

Keeping BTTB as it is in structure and status, the introduction of above structure will bypass the problems described above if and only if the following conditions are followed:

i)                    BTTB Account will replace the function of govt. treasury (only in the case of BTTB)

ii)                   High-powered decision making body will replace all the bodies above BTTB.

The above structures may be introduced by making one Act or Ordinance.

Explanation of the Summary Actions

1.     BTTB Account:

Present System: Revenue earned by BTTB is depositing in Govt. treasury. Revenue expenditure and money allocated for ADP implementation come from treasury. This is same for all govt. body.

But BTTB has bright probability for private investment. On the other hand, Govt. has the limitation of fund to invest in BTTB. In such a situation, for this treasury system, private or any other investor cannot deposit money for investing in BTTB. Moreover, money deposited once in the treasury has to pass the long bureaucratic channel for release as described earlier.

Proposed System: The proposed Act or Ordinance should allow BTTB to open a “Govt. Account in scheduled bank”. This account will be known as “BTTB Account” and may overcome the treasury limitation.

Contents of the Account:

i.                     Investment of the Govt.

ii.                   Investment from local and foreign enterprise

iii.                  Investment of the subscriber of BTTB

iv.                 Investment from Bangladeshi living abroad

v.                   Investment from general mass

vi.                 Investment from future subscribers

vii.                Investment through bond

viii.              Revenue earning of BTTB

ix.                 Earning from other assets of BTTB

x.                   Selling of scraps

xi.                 Profit on deposited money

xii.                Other investment allowed by the Govt. or competent authority

Expenditure of the account:

i.                     Development project cost

ii.                   Share of profit of the Govt.

iii.                  Share of profit of all investors

iv.                 Pay and allowances of the employees

v.                   Operating costs of the equipment

vi.                 Repair and maintenance cost of the equipment

vii.                Human resource development cost or training cost

viii.              Taxes and duties of the Govt.

ix.                 Any other cost allowed by the competent authority

BTTB Account will solve

i.                     fund limitation problem by receiving investment from all strata

ii.                   bureaucracy in allocation of fund

iii.                  bureaucracy in releasing fund

For opening BTTB Account the bank should be selected by comparing the performance and progress record in Bangladesh Bank of last 10 years.

2.     High powered decision making body:

The proposed Act or Ordinance will form one “High powered decision making body”. The body may be named as “Board of Directors for BTTB” or “BDBTTB”. The Act or Ordinance will give the following power to BDBTTB.

BDBTTB will

i.                     operate BTTB Account independently

ii.                   approve a project independently (bypassing MOPT, PC, Pre-ECNEC, ECNEC etc.).  As no money is required from treasury, there will be no problem to pass project using the money in BTTB Account under control of BDBTTB

iii.                  allocate the money from BTTB account independently and according to PCP or PP

iv.                 release the money independently and according to development program of BTTB

v.                   approve Development Program of BTTB

vi.                 set and approve conditions for all types of investors

vii.                approve the payment of share of profit among the investors (according to contract)

viii.              create post in BTTB. Establishment Ministry should accept it

ix.                 formulate a very simple and transparent investment policy for all strata of investors

x.                   create an investor seeking division or region in BTTB with professionals

xi.                 select or approve a selection of supplier(s) for procuring telecommunication and/or related equipment without following the present procurement procedure. The only point of judgement in selection will be the public interest of the country.

The Position of BDBTTB

The BDBTTB will be a high-powered organ of the Govt. It will have two legs I) MOPT, II) BTTB. It will be accountable to prime minister/cabinet only.

Conclusion:

            In this soil many good initiatives for reforming sectors has been foiled by some bad element. In some cases, in the name of reform more bad system may be imposed. We hope the concerned authority is sufficient conscious about it. If the suggestions above are taken for implementation, it should be taken as a package. A portion of the package may be worse than the present system. Also any gap in the package may be filled up by good measures.