Serving up BSNL for Private Loot

In 1987, Sam Pitroda, celebrated consultant of the corporate world, started the process of corporatisation of the Indian Telecom Sector. The formation of BSNL in 2000 too was part of the process of corporatiisation. Now Pitroda has emerged again to complete the process he began – with plans to hand over enormous wealth of BSNL to private corporate houses.

Prime Minister Manmohan Singh’s deep concern for the corporation’s declining profit prompted him to form a committee with HDFC chairperson Deepak Parikh and telecom Secretary P.J.Thomas, and headed by his personal advisor, Sam Pitroda. This committee, formed in January this year acted fast and submitted its recommendations to the PM on the 3rd of March.

The committee headed by Pitroda has made 15 recommendations ‘to make the corporation viable and prevent it from making loss’ - all of which translates to 'allow the private corporate world to plunder BSNL.'

Pitroda recommends 30% disinvestment of BSNL to begin with and further disinvestments after 3 years following review. He also recommends strategic sale to an India operator. The Finance Ministry objected to this recommendation and said that the government will never opt for a strategic sale, but will only dilute its stake through an IPO and will ensure that the public will have a share in the wealth. He also said that the government would definitely retain 51% shares in the company. While Pitroda has recommended only 30% disinvestment the UPA government is planning for 49% disinvestment!

Another recommendation suggests formation of separate wings for Fixed Lines, Moblie services, Enterprise and Expansion. This means carving up the corporation so that different private players have a slice. However, the committee recommends sharing tower infrastructure to generate more income for the corporation! So, the ‘sharing’ recommended by Pitroda will benefit only private operators.

BSNL’s plan to acquire new equipment for expansion of mobile services has been delayed since 2008 due to political and administrative reasons. Pitroda resolves this by recommending scrapping of the tender for new equipments and adopting a lease method as followed by the private operators: thus clipping the wings of any further independent development of the corporation once and for all. The BSNL board, which all these months turned a deaf ear to the demands of employees and officers’ unions to expedite the process of acquiring new equipment (which would have enabled the corporation to compete), quickly met and informed the government that it is ready to accept Sam’s recommendation.

The Pitroda Committee has recommended that a land bank be formed and collaboration with private real estate firms be commenced to develop BSNL's property – which means 25 lakh land and unutilized staff quarters of BSNL will be handed over to private companies.

When Dayanidhi Maran was Telecom Minister, there had been talk of unbundling the copper wires (i.e the underground cables laid by the corporation all through its existence). Now Pitroda wants to hand over this well-developed basic infrastructure to the private players so that they make billions of dollars without making any investment except a meagre sum in the name of rent or lease to BSNL.

To accomplish (!) all these tasks effectively, Pitroda recommends that some eminent person from the private corporate sector should head the company. And to subvert potential resistance by employees, Pitroda recommends cutting the staff strength by 1 lakh through VRS, transfer or some other means and outsourcing.

If these recommendations are followed, BSNL in effect will be destroyed and the question of declining profit or making loss will no longer arise. Pitroda recommends killing the patient to kill the disease.

An agreement for revised wages for employees due from January 2010 is yet to be implemented and the employees are in the dark about payment. Now the Pitroda Committee recommendations are serving to push the questions of wage revision to the background.

Meanwhile the BSNL Board has approved 30% disinvestment, in two-three stages, ‘rationalization’ of staff by 60,000 (as 60000 will retire in next 4 to 5 years), transfer of 40000 employees to telecom ministry, a separate wing for tower infrastructure management and creating land bank for the ‘management’ of land with BSNL. The board is now awaiting only the government’s nod. The board has also cleared the proposal of appointment of top management on contract basis.

BSNL belongs to the country and to the people of the country who created this enormous wealth. The employees' unions must prepare to defeat the attempts of the UPA government to hand over this national wealth (amounting to Rs.88,000 crores of fixed assets, 7.5 lakh kilo meters of optic fibre cable network, 25 lakh land and more) to private hands.

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