P2P CONSORTIUM

Mr Chuang Shaw Peng asked the Minister for Communications whether P2P Consortium has misrepresented in its tender bid and, if so, whether its members will be debarred from future government tenders for a fixed period and whether there will be a re-tender exercise.

Mr Sin Boon Ann asked the Minister for Communications if he will give an elaboration on the circumstances relating to, and an update of the inquiry into, the withdrawal of the mobile phone licence awarded to P2P Communications Pte Ltd on the ground that it is not able to form the consortium along the shareholding structure proposed in the tender submission and whether steps have been or will be taken to strengthen the tender procedures in this regard.

Mr Mah Bow Tan: TAS called for a tender in October 1997 to award up to 2 more mobile phone operators. At the close of tender on 31st December 1997, 2 consortia submitted bids - the StarHub consortium and P2P consortium. The Tender Evaluation Committee evaluated both bids and recommended that both consortia be awarded the mobile phone licences. Tender results were announced on 23rd April. The next day, 24th April, GTE, one of the consortium members named in the P2P tender document, issued a statement that it was not a member of the P2P consortium and had no equity stake in the venture. This was contrary to what was claimed in the tender document. The incident has created much unnecessary inconvenience to TAS and the other parties involved. TAS is now investigating whether there was any misrepresentation in P2P's tender submission. I expect the investigation to be completed in the next few weeks. Depending on the outcome of the investigation, appropriate action will be taken against the parties concerned.

There are two parts to the tender. One is the tender submission process. Like other government tenders, TAS' current tender submission process does not categorically stipulate that each and every partner in a consortium must sign the tender document. This has not given rise to any problem with TAS' other tenders until now. However in view of this incident, I have asked TAS to review the tender submission requirements to see if any improvements can be made to ensure that such incidents do not happen again in future.

The other part of the tender process is the tender evaluation. To make the process as transparent as possible,TAS made public the key evaluation criteria of the tender as well as their weightages. The tender proposals were evaluated based on these criteria by a Tender Evaluation Committee which included members from the public and the private sectors. I am satisfied that all necessary measures were taken to preserve the integrity of the tender evaluation process.

On the question of re-tender, TAS will not be calling another tender soon. However, depending on how the market develops and if there is a need, it is possible that future tenders could be called before the year 2000. Nevertheless, I should point out that with one more mobile licence awarded this time, there will be three competing operators come year 2000.