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Group of Ministers on MTNL, BSNL revival to meet on January 8

Group of Ministers on MTNL, BSNL revival to meet on January 8

By Press Trust of India | Updated: 6 January 2014 21:56 IST

The Group of Ministers assigned the task of charting the course of profitability for MTNL and BSNL are scheduled to meet on January 8 to fine tune the strategy for reviving the loss-making PSU firms.

"GoM meeting on MTNL, BSNL is scheduled January 8," a government source told PTI.

This will be fourth meeting of the GoM. The last meeting was held on September 12, 2013.

The GoM, headed by Finance Minister P Chidambaram, in their third meeting decided on pension issues plaguing both the public sector units along with refund for wireless broadband spectrum worth more than Rs 11,000 crore to MTNL and BSNL.

The GoM also decided that the government would bear pension load that MTNL pays to its about 43,000 employees absorbed from Department of Telecom.

The pension proposal of MTNL was approved by Cabinet recently that would cost the government an estimated Rs 500 crore annually.

The decision is likely to bring additional amount of about Rs 1,500 crore (including interest) in the books of MTNL as refund from government for the pension that the PSU paid to its employees.

After reporting widening of losses for nine quarters in a row, MTNL reported narrowing of its standalone net loss to Rs 947 crore for the July-September 2013 period mainly on account of lower provisions for employee retirement benefits.

The company had reported a loss of Rs 1,093.72 crore in the same period a year ago.

In 2012-13, MTNL recorded a net loss of Rs 5,321.12 crore on annual revenue of Rs 3,428.6 crore.

BSNL losses, as per unaudited results, stood at Rs 8,198 crore for 2012-13, compared Rs 8,851 crore posted in 2011-12.

BSNL has been logging losses since 2009-10. The company's profits started declining after 2004-05, when it had made net gains of Rs 10,183 crore.

The DoT has placed various issues for GoM for improving condition of these PSUs which include synergy between the two companies, waiver of one-time spectrum charges which amounting to about Rs 10,000 crore, waive off around Rs 980 crore principal amount of notional loan amount outstanding against BSNL etc.

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