UGC cancels Rs 250cr TCS order

In what could be a blow to Tata Consultancy Services , one vendor University Grants Commission (UGC) has cancelled a Rs 250 crore e-governance project. The deal will now be broken into phases and offered to several IT companies. CNBC-TV18's Kritika Saxena reports.

In March this year, TCS bagged an Rs 250 crore IT project of the University Grants Commission of India that aimed to make all its processes paperless and accessible online.

But in June, the contract was cancelled and sources say this was due to lack of funds. Now, CNBC-TV18 learns that the project will be re-worked and divided into various phases instead of one large deal. This means that each deal will be to the tune of Rs 40-50 crore each and will be given to different IT firms over six years.

When contacted, TCS said, "They will invite several IT players for the tender.  Once the bids open, TCS will definitely look at bidding for the same."

While TCS will still be a front-runner for the deals owing to its dominance in the e-governance sector, Wipro, HCL, and Patni who had bid for the earlier project are the most likely contenders for the deals. However, sources tell us that deals will not be open for bidding for a year or two until the UGC can overcome funding problems.