New Delhi: Loss-making Mahanagar Telephone Nigam Ltd (MTNL) has asked the government not to withdraw its Navratna status as it is working on a plan to start making profits by March 2013 that will include giving up wireless broadband airwaves and selling surplus land.
MTNL Chairman and Managing Director A K Garg recently gave a presentation to the Department of Public Enterprises (DPE) stating that the company has been making efforts to improve its financial situation and would begin to make profits by March.
"The CMD informed DPE that the company has prepared a strategy to make profits by way of surrendering (BWA) spectrum and selling its surplus land," an official said.
MTNL confirmed that it has requested the government that it should not be divested of Navratna status.
"We have sought time. The company should not be divested of the status. We have revival plans," said a senior MTNL official, but declined to discuss details.
The state-owned firm, which operates in Delhi and Mumbai, has been incurring losses since 2009-10 which disqualifies it from being a Navratna unit. The status allows PSUs certain operation freedom.
MTNL had posted loss of Rs 2,610.97 crore in 2009-10, Rs 2,801.92 crore in 2010-11 and Rs 4,109 crore in 2011-12.
To retain the coveted Navratna status, the PSU firm has to be a profit-making company. In case, it makes losses for two consecutive years, the company loses the Navratna tag.
In the presentation to the DPE, the company said that it is planning to garner funds from sale of huge residential and technical surplus land available in Delhi and Mumbai.
Besides, MTNL has offered to surrender broadband wireless access (BWA) to the Department of Telecom and has sought refund for the same. MTNL paid Rs 4,533.97 crore for the BWA spectrum in 2010.
The DPE Secretary heads the Inter-Ministerial Committee that undertakes annual review of Navratna companies and highlights their performance and issues for consideration of apex panel, which is headed by the Cabinet Secretary.
The panel recommends divestment of the coveted status, if the company does not meet the Navratna criteria and conditions prescribed by the DPE.
A Navratna CPSE board would not be required to take the government's permission for investments of up to Rs 1,000 crore in a joint venture project or wholly-owned subsidiary.
At present, there are 16 Navratna PSUs including BHEL, GAIL, SAIL and NMDC.