Govt panel pulls up BSNL, DoT for slow pace of asset monetisation

Telecom among worst-performing departments in terms of monetisation

A central government panel of top officials recently pulled up state-owned telecom service provider BSNL and the department of telecommunications (DoT) for their slow pace of asset monetisation, which has resulted in the department significantly missing its targets.

  This has jeopardised the overall monetisation plan for the telecom sector, according to government officials and executives in the know. 

The monetisation target in the telecom sector had to be revised due to a change in BSNL’s approach towards its mobile phone tower monetisation. It shifted from sales to a lease-based model, officials told Business Standard. 

This was pointed out in an inter-ministerial meeting of secretaries, part of the core group on asset monetisation (CGAM), chaired by the Cabinet Secretary in August. 

The CGAM undertakes periodic reviews to monitor the progress of transactions and resolve structural issues for projects in sectors covered under the National Monetisation Pipeline (NMP). 

So far, telecom has been among the worst-performing government departments in terms of monetisation. The department was initially given a four-year target of Rs 35,000 crore for the NMP. In the ensuing three years since the inception of the pipeline (till FY24), the department has monetised assets worth Rs 1,452 crore against a target of Rs 24,380 crore. This is only a 6 per cent achievement of its target.  

For FY25, DoT has been given a revised target of Rs 2,200 crore. Even if it achieves that, the department will miss its initial monetisation targets by nearly 90 per cent. 

“It is important for BSNL to undertake monetisation of its assets as it was cleared by the Public Private Partnership Appraisal Committee (PPPAC) in April 2023. NITI Aayog, the DoT, and the Finance Ministry have been tasked to find a way forward for mobile tower monetisation,” a senior official said. 

They have also been asked by the CGAM to identify alternative assets to make up for the shortfall in achievement so far. 

Queries mailed to BSNL and NITI Aayog did not elicit a response. 

Slow and unsteady 

Last year, the DoT had informed the Parliamentary Standing Committee on Communications and Information Technology that the Department of Investment and Public Asset Management (DIPAM) had approved the monetisation of BSNL assets worth Rs 18,200 crore and six MTNL properties valued at Rs 5,158 crore. 

BSNL currently lists 5,208 separate vacant land and building assets across the country for sale and renting out, apart from 536 upcoming properties for sale. 

Despite the DoT issuing a policy for monetisation of land and building assets in BSNL through outright sale or transfer in 2021, the telco has struggled to monetise these vast assets, trying out multiple approaches. 

 

Officials at the telco say land parcels spread across hundreds of districts are particularly difficult to sell, especially outside major cities. This is due to the plethora of permissions needed at the local level. 

The government’s continuous push to monetise BSNL's assets is also motivated by efforts to reduce BSNL's massive net losses, which stood at Rs 5,371 crore in FY24, down from Rs 8,161 crore in FY23, and pare its debt. 

Myriad challenges 

The creation of a one-stop website listing all the land parcels and buildings for sale nationwide had been pegged as the work-around for this issue. 

While BSNL did not provide data on how many land parcels and buildings have been sold so far through the website, officials say “the numbers are not high enough.”

In a letter to chief secretaries of all states and Union Territories and secretaries of all central ministries, Telecom Secretary Neeraj Mittal, had in May, informed about the website. He pointed out that government departments in need of land could directly seek to buy it from BSNL.

 

“While earlier, government departments and bodies were prioritised in the monetisation process, that is being re-assessed now,” an official said.

 

Since 2020, the DIPAM has mandated that assets valued at over Rs 100 crore would be monetised by the DIPAM framework. Those below that threshold would be monetised by the owner of the asset. This has also slowed the process, officials said.

 

However, officials said the pace of work has increased recently.

 

Case in point, BSNL had last month, invited applications for the three-member oversight committee for land monetisation that is mandated to ensure transparency in all deals and to oversee the entire process.