Handling of sccession issues at BSNL, MTNL under fire

KOLKATA: Communications minister Kapil Sibal is miffed by the telecom department’s handling of the leadership succession planning exercise at Bharat Sanchar Nigam and Mahanagar Telephone Nigam, according to government documents reviewed by ET.


In an internal note to telecom secretary MF Farooqui, Sibal has questioned why DoT recommended BSNL director -consumer mobility Anupam Shrivastava, and MTNL director – finance PK Purwar, as future successors to BSNL chairman & managing director RK Upadhyay and MTNL chairman & managing director AK Garg, respectively, without considering three-year extensions for both incumbents based on “a mandatory performance appraisal by an external expert group”.

“These officers (read: Upadhyay and Garg) cannot be denied evaluation by an external expert group merely due to DoT’s failure to take timely action. I fail to understand why this exercise was not undertaken.

Unnecessary embarrassment and inordinate delay may happen in case any one of them prefers to go for legal remedy, a scenario which BSNL and MTNL can ill-afford at this critical juncture,” said Sibal in a confidential note to Farooqui seen by ET. So much so, the minister has asked DoT to put CMD succession plans on hold at both telecom PSUs till Upadhyay and Garg have been appraised by an external expert group and the findings reported to him by March 15.

“The performance evaluation by an external group must be completed by March 15, and the outcome, whatever may be, telecom department,” said Sibal in his letter to Farooqui.

Upadhyay had assumed charge at BSNL on April 30, 2011, and his three-year tenure ends on April 30 this year. Garg, who became MTNL chairman in early December 2011, concludes his three-year term on December 4, 2014. Para 1.1, of the terms & conditions of their appointment rules, states that “appointment will be for three years in the first instance or till the date of (their) superannuation, (but) it can be extended by another three years based on performance evaluation by an external expert group”.

Sibal’s diktat counters a recent memo from DoT joint secretary V Umashankar calling for expeditious appointment of successors to Upadhyay and Garg. “Appointment of successors to the present CMDs of BSNL and MTNL is at an advanced stage and may be continued. Any tenure extension process for Upadhyay and Garg undertaken at this late stage may invite adverse comment,” said Umashankar in an internal note, a copy of which was reviewed by ET.

Another DoT official ruled out an early resolution, notwithstanding Sibal’s intervention, since the Public Enterprises Selection Board (PESB) has also recommended Purwar and Shrivastava’s appointments as future CMDs of MTNL and BSNL. A related DoT note reveals that the “approval of the Central Vigilance Commission (CVC) has also been sought through the DoT’s vigilance wing” for the early naming of Upadhyay and Garg’s successors.

The latest HR flip-flops in the DoT have come at a time when the government is trying to revive both loss-making telecom PSUs. An empowered interministerial group recently asked DoT to give loans to BSNL and MTNL to help them pay a portion of their staff 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 roughlyRs 1,900 crore.

State-run BSNL’s accumulated losses were at Rs 24,681 crore as on March 31, 2013. It reported a loss of Rs 7,884 crore in 2012-13. This was its fourth successive loss-making year, but was nearly 11% lower compared with the Rs 8,851 crore loss in fiscal 2011-12. MTNL’s net loss, in turn, widened to Rs 5,321.1 crore in 2012-13 from Rs 4,109.8 crore in 2011-12. Its total debt in end-September 2013 reportedly stood at Rs 11,925 crore. Both loss-making PSUs have been rationalising costs and exploring steps like monetising real estate holdings to unlock value for their survival. An inter-ministerial group has also given in-principle nod to BSNL’s plans to hive off its sizeable tower assets into a new company. BSNL has 61,622 towers, which is the second largest tower portfolio among all telcos.