GoM asks govt to loan BSNL & MTNL to pay up salaries

An inter-ministerial group has asked the government to give loans to state-run Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL) to help both loss-making telcos pay a portion of their salary bills.

BSNL's annual salary bill in 2013-14 is likely to touch nearly Rs 14,000 crore while MTNL's is envisaged at roughly Rs 1,900 crore. "The government is likely to consider roughly Rs 8,500 crore of soft loans at a token 1 per cent interest to help BSNL and MTNLBSE 7.09 % pay salaries to a section of employees who were absorbed from the telecom department," said a top official privy to the discussions on Tuesday.

BSNL is likely to receive about Rs 7,500 crore at net present value over a 10-year span while MTNL will receive close to Rs 1,000 crore over a similar span to clear a portion of their staff pay dues. BSNL and MTNL are likely to receive roughly Rs 2,000 crore and Rs 390 crore, respectively, in the first year, said the official quoted above.

Repayments will kick off after the 10th year. The inter-ministerial group also gave in-principle nod to BSNL's plans to hive-off its tower assets into a new company. The telecom department had recently moved a Cabinet note in this light.

Source: http://cablequest.org/news/telecom-news/item/4198-gom-asks-govt-to-loan-bsnl-mtnl-to-pay-up-salaries.html