Wipro says new GM deal worth only US$27 million

Indian software services provider Wipro said the contract value of a five-year computer services deal with General Motors was far less than the US$300 million reported earlier.Wipro was the only Indian company to be awarded work directly in the latest GM contract. The company's inclusion in the contract was celebrated in India as a major win for an Indian information technology services company.

the US$300 million figure that Wipro announced on Thursday was the estimated value of business the company expected from GM over a five-year period.The figure included revenue from continuation of work it already does for GM, which was assumed at an annual run-rate of US$40 million, and also additional business it expects from GM and other IT suppliers supporting its businesses

Reports that the deal was worth US$300 million were carried widely in India and abroad. But on Friday, Wipro issued a statement saying the "$300 million number which has been reported as the value" of the contract "is not accurate".The statement from the company added: "The numbers reported as the value of this contract yesterday were purely estimates of future business we hope to attain with GM and other IT (information technology) suppliers supporting GM's business."General Motors awarded computer services contracts totalling about US$7.5 billion to Electronic Data Systems, International Business Machines, Hewlett-Packard, France's Cap Gemini and the Compuware Covisint unit of Compuware, among others.Wipro on Thursday held a news conference in Bangalore at which Banerjee said revenue from the contract would start flowing from the second quarter of Wipro's next fiscal year, which ends in March, 2007. He did not say how revenue would be spread over the period of the contract.