Decks have been cleared for the merger of BSNL and MTNL.

The Department of Telecom has told the Parliamentary Standing Committee on Information Technology that the proposal to merge BSNL and MTNL makes sense.

A team of DoT officials, including the Secretary, Mr R. Chandrashekhar, who appeared before the panel on Wednesday, said the Board for Reconstruction of Public Sector Enterprises' (BRPSE) recommendation that MTNL could be brought under BSNL was accepted by a committee set up by the DoT.

The DoT told the panel that the board's recommendation was examined by a committee headed by Member (Services) of the Telecom Commission. The committee, officials said, has submitted its report.

“The committee has recommended that while the merger of BSNL and MTNL prima facie makes sense, merger with or takeover of Indian Telecom Industries (ITI) by BSNL, reflects a poor business case for sustainable viability of ITI with no significant tangible benefits to BSNL,” a Standing Committee member said quoting the officials.

The BRPSE had earlier said that there was no reason for MTNL to continue as a separate entity. The DoT's panel, which looked into the issue of merger, has also raised issues such as difference in pay scales and HR policies.

“The committee has further recommended that though the merger of BSNL-MTNL is desirable, the issues such as differences in pension administration mechanism, difference in pay scales and other HR policies of the two organisations need to be resolved first before moving ahead,” the officials told the standing committee.

Synergistic alliance

They added that since resolving of such issues are time consuming, the DoT has decided to encourage “creation and recognition of synergistic alliance” of the BSNL and MTNL through policy interventions.

The officials added that the report of the DoT committee has been sent to the BRPSE for its consideration after the approval of the competent authority.

The Standing Committee has started examining the demands for grants of the DoT for this fiscal.

The report of the panel will be laid in the second part of Budget session, which will begin on April 24.

jigeesh.am@thehindu.co.in

(This article was published on April 11, 2012)
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