Friday, February 25, 2011

Not the RIGHT TIME to disinvest - - Written by Admin (PSU INDIA) Friday, 25 February 2011

The government today said it is "not the opportune time" for listing and disinvestment of BSNL since such a step might undervalue the company. 

"The Full Telecom Commission has decided this is not the opportune time for listing and disinvestment of BSNL as such a step may not realise true value of the company at this juncture," Minister of State for Communications and IT Gurudas Kamat said in a written reply to the Rajya sabha.

He added the Commission has further observed that this issue could be revisited if the need arose in the context of any major policy decisions relating to restructuring and repositioning of BSNL.

Kamat said BSNL has paid Rs 37.07 crore till date to Boston Consulting Group for its services.

Prime Minister Manmohan Singh had constituted a committee headed by Sam Pitroda to look into the reasons for BSNL's poor performance and suggest ways to improve it. The Pitroda panel had suggested, among other things, 30 per cent disinvestment in the telecom PSU.

The proposal had met with stiff opposition from the employees' unions and associations of BSNL, which were against any move to offload government's equity in the company.

Replying to another question, Kamat said based on the unaudited and provisional results up to December 31, 2010, it is een that the financial health of the company has not improved over the previous year.

BSNL, during the fiscal year 2009-10, posted a net loss of Rs 1,822.65 crore, while revenue declined 10.4% for the reported fiscal at Rs 32,045.41 crore.

The company had attributed this decline to drastic reduction in tariff, wage revision, decline in fixed wire line connections and re-payment of interest on loans for 3G and BWA spectrum. 

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