The Department of Public Enterprises has initiated efforts to monetise the land assets of Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL). This move, aimed at addressing the debt burdens of these public sector undertakings (PSUs), is expected to be completed by the end of the current financial year.
Earlier, To improve its financial situation, Bharat Sanchar Nigam Limited (BSNL) announced that it will sell its land parcels in Mangalore. The land, which is located near Kadri Park, is about two acres in size and is called Store Yard. BSNL plans to auction it off electronically, with a minimum price of Rs 39 Crores. Buyers will also need to make an Earnest Money Deposit (EMD) of Rs 1.95 Crores, which shows their commitment to the purchase.
Tender for Land Auction Expected in February
The government has announced plans to float a tender for auctioning the land assets of BSNL and MTNL by mid-February. According to officials, the auction process typically takes about three weeks to complete.
Monetisation to Be Carried Out in Phases
The monetisation of BSNL and MTNL land assets will be conducted in tranches. The first tranche is expected to raise approximately ₹300 crore. This phased approach allows the government to gradually unlock the value of these assets and ease the financial strain on the two telecom PSUs.
Efforts to Reduce Debt Through Land Monetisation
The primary goal of this monetisation initiative is to reduce the debt levels of BSNL and MTNL. Presently, bids are being accepted for a few parcels of land belonging to these PSUs, with anticipated revenue between ₹200 crore and ₹300 crore. While the deals are expected to close by March 2024, the payment from these transactions is likely to reflect in the FY26 accounts.
Monetisation of Other PSU Land Assets on Hold
While the government is prioritising BSNL and MTNL, plans to monetise the land assets of other public sector enterprises have been deferred for the time being. A senior finance ministry official confirmed that such initiatives are currently on the back burner.
Strategic Push for Non-Core Asset Monetisation
The government has been actively working to monetise non-core assets of PSUs. These assets, often unused or underutilised, offer little business value. The monetisation push is partly driven by challenges faced in the privatisation and disinvestment of state-owned enterprises.
Role of the National Land Monetization Corporation (NLMC)
To streamline the monetisation process, the government established the National Land Monetization Corporation (NLMC) in 2022. This special-purpose vehicle is responsible for identifying and monetising surplus land and assets of PSUs.
The NLMC is currently focusing on the land holdings of BSNL and MTNL. However, these represent only a small portion of their surplus properties. BSNL’s land assets are spread across the country, while MTNL holds prime properties in metropolitan areas like Delhi and Mumbai.
BSNL and MTNL’s Extensive Land Holdings
BSNL and MTNL collectively own significant real estate assets. BSNL’s holdings are dispersed across various regions, while MTNL’s properties are primarily located in high-value locations in Delhi and Mumbai. These prime locations offer substantial potential for generating revenue through monetisation.
In 2023, the Department of Telecommunications 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’s assets worth ₹18,200 crore and six MTNL properties valued at ₹5,158 crore.
Challenges in the Monetisation Process
Despite the potential value of these assets, the monetisation process faces significant challenges. Legislative hurdles and the need for permissions from state governments and local bodies have slowed progress. These complications have limited the success of previous attempts to sell BSNL and MTNL’s land assets, officials noted.
Future Plans for Monetising Land of Other PSUs
Beyond BSNL and MTNL, the government also plans to monetise land assets of other PSUs, including Air India, Indian Drugs and Pharmaceuticals Ltd, and Rashtriya Ispat Nigam. However, these plans are on hold and are expected to resume after the general elections. The sale of these properties could generate significant revenue, but progress has been slower than anticipated.
Government’s Long-Term Vision
The government’s broader vision is to utilise the proceeds from non-core asset monetisation to enhance the financial health of PSUs and improve the efficiency of public sector operations. While the sale of BSNL and MTNL’s land assets is a step in this direction, substantial efforts are needed to overcome legislative and procedural bottlenecks to realise the full potential of these initiatives.
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