Financial Daily from THE HINDU group of publications
Monday, May 27, 2002
Alliances & Joint Ventures
Logistics - Railways
No clear signal from BSNL, MTNL on stake offer: RailTel may have private partners
NEW DELHI, May 26
THE Railway Ministry is having a re-think on the appointment of an investment banker to work out both the quantum and premium on equity for RailTel to be offered to Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL).
It may, instead, pilot a fresh proposal to the Cabinet seeking permission to rope in private partners for its telecom venture.
According to official sources, although an internal Committee has short-listed an investment banker after scrutinising close to half a dozen bids, it has not been cleared by the Railway Board.
"The Board is having a re-think on the appointment of an investment banker since both MTNL and BSNL have not given a firm indication on whether they would be interested in a tie-up at all,'' said official sources.
The Railway Ministry's move to rope in telecom PSUs followed a Cabinet decision to permit the Indian Railways to off-load 49 per cent of its equity to joint venture partners (i.e. the telecom PSUs and Railway PSUs).
The delay in roping in either of these two telecom PSUs as joint venture partners prompted the Railway Ministry to direct three of its own PSUs - IRFC, Concor and Ircon - to pick up 15 per cent stake in RailTel.
Officials held that the decision to invite bids to appoint an investment banker to recommend the quantum and the premium on equity for RailTel was, in fact, based on the suggestion given by one of the telecom PSUs.
However, no headway has been made so far since these PSUs have not given any firm indication on picking up equity stake in the venture.
Officials, however, maintained that the work on the first phase of laying of OFC over 9,600 km would be completed by June. Out of the total 9,600 km, work on 8,000 km is being done by the Railways, of which 4,500 km has been completed. Work on 1,600 kilometres is being done by RailTel.
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