Cabinet note moved to sell VSNL land; may fetch Rs 6,150 crore

NEW DELHI: Facing a huge shortfall in disinvestment proceeds, the government is likely to hive off VSNL's (now Tata Communications) surplus land that may fetch the exchequer Rs 6,150 crore.

The Telecom Ministry has circulated a Cabinet note asking all the concerned ministries to give their comments in 15 days for selling 770 acres of surplus land of VSNL.

According to a source, the Department of Telecom ( DoT) has sent the note to ministries including the Finance Ministry and the Department of Disinvestment.

The Telecom Commission, the decision making body of DoT, had recommended hiving off 773 acres of surplus land with Tata Communications. It had asked the DoT to approach the Cabinet for a formal nod to start the process.

Besides, the Telecom Commission had also recommended that the government pick up a majority stake in the special purpose vehicle created to execute the sale of surplus land lying with Tata Communications.

The government is likely to buy a stake of a little over 51 per cent in the special purpose vehicle (SPV).

Telecom Secretary and Telecom Commission Chairman R Chandrashekhar had said that before making any investment to buy a stake in an entity, the Cabinet approval is required. He added that the transaction details are yet to be worked out.

In 2005, Cabinet had approved formation of a SPV to execute the transaction related to the surplus VSNL land.

Tata Communications had acquired the PSU in 2002, but the deal did not include 773.13 acres of land assets owned by VSNL, which have been lying unused following the acquisition.