1. Monetising assets: BSNL wants to sell lands which it does not own

Monetising assets: BSNL wants to sell lands which it does not own

State-owned, loss-making telecom firm BSNL’s move to monetise its real estate assets in order to shore up its revenues has run into trouble as the department of telecommunications (DoT) has said since the ownership of the properties do not vest with the firm, its proposal cannot be processed.

By: | New Delhi | Updated: January 27, 2018 4:27 AM
BSNL, Monetising assets, real estate, BSNL lands, telecom State-owned, loss-making telecom firm BSNL’s move to monetise its real estate assets in order to shore up its revenues has run into trouble as the department of telecommunications (DoT) has said since the ownership of the properties do not vest with the firm, its proposal cannot be processed.

State-owned, loss-making telecom firm BSNL’s move to monetise its real estate assets in order to shore up its revenues has run into trouble as the department of telecommunications (DoT) has said since the ownership of the properties do not vest with the firm, its proposal cannot be processed. The telecom firm had recently moved a proposal before the DoT that it be allowed to sell part of its land banks and buildings to bring about a financial restructuring of the organisation. However, DoT officials said the sale of property can only happen if the title of the same vests in the name of the company, which is not in the case of BSNL, and hence, the proposal lacks in merit and cannot be processed. The reason is that most of the land bank which BSNL has was acquired by DoT before BSNL came into existence. As a result the ownership of these land is with the government and not BSNL. Second, lands and building which are with BSNL were mostly acquired for building exchanges for the purpose of increasing rural coverage. These lands were acquired from local municipal bodies for a token amount for technical purposes.

If these land are to be sold, it would require making change in the purpose for which they were aquired and the local bodies may object to the sale and may ask that it be given back to them. “Recently, we did a fair valuation of a third of our land holdings. Based on this, 4,030 plots measuring a little over 2 crore sq mtr is worth around Rs 67,000 crore in the market today. We can monetise these land holdings and use the proceeds for expanding our network and infrastructure,” BSNL chairman and managing director Anupam Shrivastava told FE. BSNL conducted the valuation as part of its project Vasundhara with KPMG as the consultant. When queried that how can BSNL make a proposal with regard to properties which do not belong to it, company sources told FE that if the government wants the ownership can be changed with the Cabinet’s approval.

DoT officials said BSNL in its proposal has not taken into account the issue of ownership of the land and purpose for which they were acquired. If the bulk of the land which has value does not belong to BSNL and therefore cannot be monetised the way it wants then whatever little it has which really belongs to it like buildings and offices which can generate rental income would not make much of a difference to what it currently earns through such measures. For instance, in FY16, BSNL earned Rs 41.85 crore through property rentals. Though it has not declared its FY17 numbers so far, the growth would not be exponential. BSNL has been posting losses since FY13. In FY16, its net loss stood at Rs 3,880 crore and revenue at Rs 28,449 crore. It has got a huge workforce at 2 lakh as a result of which around 55% of its revenues goes into wages. A minimum of 8% of annual increase happens in salaries of employees in BSNL – 3% minimum by way of regular increment and 5% through dearness allowance revision. Against this, BSNL’s annual revenue growth is 4-5% at best. It has estimated that to reduce workforce by way of a voluntary retirement scheme (VRS), it needs to spend around Rs 18,000 crore.

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  1. Deepak Kalaskar
    Jan 28, 2018 at 6:57 am
    . Modi government should realize this in election 2019. What they are doing is the only thing of making people panic. This pain will result in election 2019. As BSNL is 100 owned by central government they should help BSNL but real fact is exactly reverse.
    Reply
    1. Prashanth T
      Jan 27, 2018 at 10:48 pm
      company sources told FE that if the government wants the ownership can be changed with the Cabinet’s approval. This is no different than a case of bad loan. Corrupt/Frauds' mentality in public sector are no different than those from corporates. They do no progressive, efficient work and when the debt grows too much and about to explode, they dare give such outrageous suggestions just to cunningly replace their - ve balance sheets with ve numbers, and thereby fill their treasury so that further loots can be done internally.
      Reply
      1. Rajesh Kumar
        Jan 27, 2018 at 8:31 pm
        This are excuse present modi sarkar is interested in selling this huge enterprise to some there freiends , this are just a little issue that can be solved very easily , but instead of solving little problem they blocking help to this bsnl and cutting there income sources, like few days before 60000 ground base tower are sell by modi sarkar, now they they about 200000 roof top tower immediate , this govt are sell everyone to his business friend and his business freiend is giving free service for some of days, they are making environment favourable, jai ho what a politics by modi,,
        Reply
        1. Sumit T
          Jan 27, 2018 at 2:59 pm
          SELL LOSS MAKING CORRUPT PUBLIC COMPANIES... SELL BSNL, SELL AIR INDIA . STOP EATING HARD EARNED PUBLIC MONEY..
          Reply
          1. Akshay Mittal
            Jan 27, 2018 at 10:50 am
            Behen k laudo Poori post mein "State-owned, loss-making telecom firm BSNL’s move to monetise its real estate assets in order to shore up its revenues has run into trouble as the department of telecommunications (DoT) has said since the ownership of the properties do not vest with the firm, its proposal cannot be processed." teen baar likha. -iya samjha hai public ko M d rch0d kahi k
            Reply
            1. Akshay Mittal
              Jan 27, 2018 at 10:47 am
              Behen k laudo Poori post mein "State-owned, loss-making telecom firm BSNL’s move to monetise its real estate assets in order to shore up its revenues has run into trouble as the department of telecommunications (DoT) has said since the ownership of the properties do not vest with the firm, its proposal cannot be processed." teen baar likha hai. samjha hai public ko kahi k
              Reply
              1. Abdul Majeed Khan
                Jan 27, 2018 at 10:37 am
                Government of India and the DOT are the real culprits for the pathetic condition of the BSNL. How does the company expects them to help them to wriggle out of the present situation?
                Reply
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