The Department of Public Enterprises has decided to monetise land assets of debt-riddled Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL) by the end of the current financial year.
“The government will float a tender to auction BSNL and MTNL’s land by the second half of February,” an official said. Typically, the auction takes place over three weeks.
The monetisation of assets is likely to happen in tranches with the upcoming tranche expected to raise around Rs 300 crore. The move follows repeat recommendations from the telecom ministry.
The government is hopeful to close the deals by the end of March, the payment will only come in FY26. The Centre is looking to reduce the debt of both the telecom PSUs through land monetisation. Currently, the government is accepting bids for the sale of a few acres of land of these two PSUs, with the expectation to raise Rs 200-300 crore.
Monetisation of other public sector units’ land assets are on the back burner, a senior finance ministry official said.
The government has been trying to monetise non-core assets of public sector undertakings to let go of properties with little or no business activities. The push to monetise these unused assets also came as a fallout of the government’s little success in privatisation and disinvestment of state-owned entities.
The National Land Monetization Corp, a special purpose vehicle set up in 2022, was in fact formed to undertake monetisation of surplus land and assets of public sector enterprises.
Though the National Land Monetization Corp is prioritising the sale of land parcels of BSNL and MTNL it is only a small portion of the huge surplus land of these PSUs that needs to be monetised. BSNL has assets spread across the country and MTNL has properties in Delhi and Mumbai, most of which are at prime locations.
Last year, the Department of Telecommunications had informed the Parliamentary Standing Committee on Communications and Information Technology that the Department of Investment and Public Asset Management had approved the monetisation of BSNL’s assets worth Rs 18,200 crore and six MTNL properties worth Rs 5,158 crore.
The sale of BSNL and MTNL’s land is seeing limited success owing to legislative complications and permissions required from state governments or local bodies, the official added.
Earlier, a senior finance ministry official had told Informist that the government was looking to sell land parcels of Air India, Indian Drugs and Pharmaceuticals Ltd and the second tranche of land belonging to Rashtriya Ispat Nigam after the general elections.
However, these deals are yet to materialise.