Govt cos, MNCs may help Satyam with $400-mn deals

31 Jan 2009,, ET Bureau

NEW DELHI: Satyam Computer Services may be poised to win large contracts worth around $400 million in revenues from some government-run entities and multi-national firms, giving the scandal-tainted firm a welcome breather at a time it is vulnerable to large-scale customer defections.

A top Satyam official, who asked not to be named, said the company was the front-runner for large contracts from the Indian Railways, BSNL, Vizag Steel Plant and the Indian Mint, as it was the lowest bidder.

The contracts from these entities are for tasks such as data management, information infrastructure management and deploying new applications. Rival bidders eyeing these contracts include IBM, Accenture, CSC, TCS, Infosys and Wipro.

Some of Satyam’s overseas clients are also likely to increase their engagement with it, the official said, listing a $100-million multi-year contract from a large global telecom company that is close to being finalised and additional work from a US-based technology company and a Swiss-based vending services company. The official declined to name the companies.

The news comes at a time some of Satyam’s customers have terminated contracts, after its future was called into question, following revelations of massive fraud by its founder and former chairman B Ramalinga Raju. However, Satyam officials say most of the company’s clients have been supportive, although some of them have put in place back-up plans.

One of Satyam’s biggest customers, General Electric, has said it will continue to work with the company, while Canadian conglomerate Bombardier and UK’s frozen food maker Birds Eye Iglo have also assured it that they will continue projects
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“We have very good reaction from customers. They do not have issues with Satyam’s delivery capability or its employees. Satyam is a frontrunner for government contracts due to its better financial bid and on technical soundness. As far as global clients are concerned, their only worry is business continuity and we are assuring them on that front,” the official said.

Bombardier, which set up a Bombardier India Engineering Centre at Satyam in 2006 and ramped it up to 285 employees from 25 in two years, said in a letter to the company sent via the Indian High Commission in Ottawa: “Bombardier has always been satisfied with the work of Satyam associates. We look forward to maintaining our relationship with Satyam.”

Birds Eye Iglo, which had switched to Satyam from Capgemini in 2008, plans to continue using the Indian company for its supply chain management-related processes.