HCL Infosystems emerges as lowest bidder for UID project

HCL Infosystems emerges as lowest bidder for UID project

New Delhi: HCL Infosystems Ltd has emerged as the lowest bidder for the Unique Identification Authority of India’s (UIDAI) managed service provider (MSP) contract, one of the biggest government projects in the domestic technology space.

The company has bid 2,200 crore for the seven-year contract, which involves building of the Central ID Data Repository (CIDR) responsible for issuing 600 million UID numbers by 2014 along with updating resident information, and authenticating the identity of residents.

“We can’t comment further till the contract is formally awarded," the official said. None of the officials wanted to be identified. The country’s largest software services firm Tata Consultancy Services Ltd (TCS) was the other company that had qualified for the technical round. TCS could not be immediately reached for comment.

The MSP bid, for which the tendering process had begun in 2010, was one of the most- awaited contracts in the domestic information technology space.

The deal, if finally clinched by HCL, will significantly shore up the company’s revenue, the performance of which has not been very strong in recent quarters. For the three months ended December 2011, the company reported consolidated revenue of 2,693 crore, a drop of 15% over the same period last year. Its profit after tax declined by 38% to 35 crore. The company’s performance has been severely affected by the drop in market share of Nokia. HCL Infosystems distributes Nokia mobile phones. It has also been affected by the sluggishness in government business and the drop in its market share in the domestic personal computer (PC) segment.

The company’s stock price, which has halved in the last one year, dropped 0.11% to 43.90 on BSE on Thursday. The benchmark Sensex fell 0.95% to 17,583.97 points.

According to a UIDAI list, nine companies had initially expressed interest in the project.

They were Accenture Services Pvt. Ltd, HCL Infosystems, HP India Sales Pvt. Ltd, HCL Technologies Ltd, IBM India Pvt. Ltd, Mahindra Satyam, TCS, Tech Mahindra Ltd and Wipro Ltd.

TCS, the only other company which qualified in the technical round, had scored higher in the technical round. UIDAI has given a 70:30 weightage to technical and financial matters.

“The gap between the financial bids of HCL Infosystems and TCS is too high and HCL should most likely get the contract," said one of the executives.

HCL recently won an order from Electronics Corp. of Tamil Nadu Ltd (ELCOT) to provide 200,000 laptops to government and state-aided schools and colleges across Tamil Nadu in a deal worth 278 crore.

UIDAI, which has set a target of giving a unique identity to 600 million residents by 2014, has already enrolled 200 million people and issued almost 140 million others.

The authority, whose mandate has been recently extended by the cabinet, has currently halted enrolments and will resume in April. UIDAI director general R.S. Sharma recently said in a recent interview that the authority will “refresh" its technical and other process during this brief halt.

During the first phase of the roll-out of UID, the authority had farmed out several small contracts to various technology firms, which are supposed to be managed by the MSP once appointed.

Sunil Chandiramani, partner and national leader, government services, at audit and consulting firm Ernst and Young, which is an adviser to the project, said that whatever infrastructure UIDAI had built so far was like a proof of concept. “Now the MSP will be the major structure, which will carry the project forward and everything from data centre to biometrics will come under it as the scale of the project will increase tremendously."