Reconstruction panel in talks with BSNL over ITI Ltd mgmt takeover

The Board for Reconstruction of Public Sector Enterprises (BRPSE) on Monday said it is talking to Bharat Sanchar Nigam Ltd (BSNL) to convince the telecom major to takeover the management of ITI Limited, a sick PSE that makes telephone instruments.

"We have adopted a new model wherein we tag sick companies with financially strong companies in the public sector. Under this, we have asked BSNL to takeover Indian Telephone Industries (now known as ITI Limited)," BRPSE chairman Nitish Sengupta told reporters here.

Even though Sengupta did not elaborate on the talks with BSNL, a senior official in the Department of Public Enterprises said the telecom service provider is not keen on the proposal. "We had appointed a consultant to find out the synergies between BSNL and ITI and the consultant had pitched for the backward linkage for BSNL. However, BSNL is not willing and says there is a huge residue in ITI. We are trying to convince it. We are going to meet BSNL officials on February 12 to take the talk forward," the official said.

ITI Ltd is incurring losses for the last several years and is facing trouble in paying salaries to its 13,000-odd employees. In 2007, the company had sought government bailout and asked for Rs 2,000 crore package to offset the accumulated losses of Rs 2,225 crore.

In this model, BRPSE has already given the charge of Eastern Coalfields and Bharat Coking Coal to Coal India Ltd, even as 80% of Bharat Refractories has been entrusted to SAIL. It has also asked National Textiles Corporation to act as agent for the sale of huge tracts of land of Elgin Mills in Uttar Pradesh, which would help the mill to some extent. Sengupta said the board has decided to review the developments after it has recommended the revival package. "We are authorised to review the implementation of the revival package but somehow it was not happening. Now, we have decided to review the progress frequently," he said.

BRPSE has recommended the revival of 54 PSEs through restructuring, merger and closure and the Centre has approved revival of 34 companies till December 2008, and has given a total assistance of Rs 14,510. "Out of the 34 firms approved for revival, 18 posted profits in 2007-08," Sengupta said, adding that the number of sick PSEs has steadily come down from 109 in 2001-02 to 54 by 2007-08.