A spat between engineers and bureaucrats of the communications ministry has caused losses of Rs.21.24 billion ($464 million) in the last six weeks but is nowhere near resolution, the technocrats say.

Even worse, the Indian Telecom Service Association (ITSA) said at a press conference here Monday, work on new projects costing over Rs.260 billion has come to a standstill.

Among these is a Rs.6 billion Bharat Sanchar Nigam Limited (BSNL) project to take its GSM mobile subscriber base to 60 million - which would have made it India's primary cellular provider and the seventh largest in the world.

At issue is absorption of 2,200 category A Indian Telecom Service (ITS) officers of the Department of Telecommunications by state-run BSNL - India's largest telephony provider - and Mahanagar Telephone Nigam Limited (MTNL) that operates in New Delhi and Mumbai.

"The category B, C and D employees of the department have been absorbed in BSNL/MTNL on extremely lucrative terms and with huge pay hikes. The ITS cadre (category A officers), on the other hand, is being demoted and is being forced to accept pay cuts of 11 percent," ITSA president S.S. Sirohi said.

"We are being restricted to the E-9 pay scale (of public sector undertakings), which is equivalent to joint secretary against the existing level of additional secretary and even ex-officio secretary that we can rise to," Sirohi added.

"The ITS officers have en masse rejected the absorption offer as it is inferior to our existing service conditions. We prefer to work in BSNL/MTNL on deputation basis," Sirohi said.

This led to a situation where 1,300 ITS officers found their offices locked on Oct 18 and were told to cool their heels till further orders. Action could not be taken against the remaining 900 officers due to the stay orders they had obtained. It took judicial intervention to get the officers back to work Nov 17 - and that too in BSNL only.

"This situation has resulted in wasting of much-sought human resource, apart from an adverse effect on the health of BSNL/VSNL," ITSA said in a letter to Prime Minister Manmohan Singh earlier this month, seeking cancellation of the Oct 18 order asking ITS officers to seek absorption in BSNL or MTNL.

"If professionals like ITS officers end up with an uncertain career, it would be a tragedy for the technocrats, humiliation of professionals and their demoralisation, notwithstanding the huge loss to the nation," the letter added.