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US state pays Tatas for cancelled BPO deal
June 26, 2004 16:53 IST
The American state of Indiana has paid nearly $1 million to Tata America International Corporation, a subsidiary of Tata India, for an outsourcing contract which it had scrapped prematurely last year.
The engineering giant was paid this whopping amount by the Indiana government after it cancelled the $15.2 million outsourcing contract, which had snowballed into a major election issue in the state, last November.
Indiana government had hired the American arm of Tatas to upgrade the state computer system processing unemployment claims.
But the deal was scrapped by the new government headed by Joe Kernan, which had made the contract a campaign issue, the Indiana Star reported.
The company had sought $1.74 million for six weeks of work and were paid for training 45 state programmers in development and engineering of up-to-date software systems; for designing software plans and requirements and for legal fees, costs related to cancelling a letter of credit and ending a building lease, according to state officials.