RailTel, MTNL, BSNL partnership delayed despite approval

Jyoti Mukul

New Delhi, Nov 4: More than five months after the Cabinet granted RailTel Corporation approval for partnership with Mahanagar Telephone Nigam (MTNL) and Bharat Sanchar Nigam (BSNL), it is yet to make any move in this direction. Ironically, the delay comes at a time when the government is trying to kick start economy through greater investment in core sector.

As per the Cabinet approval, while the Railways were to pick up 51 per cent equity in the corporation, the remaining 49 per cent was to be offered to MTNL, BSNL and the Railways’ own undertakings RITES and Ircon International.

On being contacted, RailTel chairman N K Chidambaram said that though the corporation has not been able to tie-up with any company so far, the exercise of rolling out network was going on full stream.

"We have laid 7,000 km of optic fibre cable (OFC) and are tying up finances. In fact, we have already tied up Rs 200 crore loan with IRFC and are in talks with a group of banks."

However, sources said that despite RailTel being in talks with MTNL and BSNL even before the Cabinet approval was granted, nothing has moved so far except the two companies deciding in principle to take equity jointly.

Interestingly, with MTNL and BSNL being mini ratnas, a mere approval by their board of directors can set the ball rolling.

Sources attributed the delay to telecom ministry putting the issue onbackburner. Incidentally, telecom minister Pramod Mahajan had been opposed to the creation of RailTel at a time when the government is disinvesting.

Though RailTel was created only last year as the telecom arm of the Railways with an authorised capital of Rs 1,000 crore, an ambitious Rs 700 crore revenue target was fixed by former railway minister Mamata Bannerjee for the current year.

The corporation has to exploit 62,800 km of the Railways’ right of way for creating a bandwidth which can be used by internet service providers and basic and cellular phone operators. However, the Railways’ entry into broadband business has been delayed from the very beginning.