Category Archives: PSU

Matters connected with Public Sector Units (PSU)

GoM decides Refund of Spectrum Charges to BSNL, MTNL

10 Friday Jan 2014

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The Group of Ministers(GoM) on Revival of BSNL which met yesterday, 9th January 2014, presided by Finance Minister P.Chidambaram, decided to refund the Spectrum Charges to BSNL and MTNL. BSNL will get a refund of Rs. 6,724.51 crore and MTNL Rs. 4,533.97 crore.
The charges are being refunded for the surrender of spectrum by BSNL for Gujarat, Maharashtra, Andhra Pradesh, Karnataka, Tamil Nadu and Kolkata and both Delhi and Mumbai for MTNL.
This has been one of the long pending demand of both the PSUs since the spectrum allotted to them was not technically and financially viable in the above areas.
“The refund will be made to ensure support for the revival and revitalisation of BSNL and MTNL in the competitive telecom sector. It shall also help these PSUs to arrange finances to meet basic financial commitments such as operation and maintenance of their telecom network,” the GoM stated.
The Joint Forum of BSNL/MTNL Unions/Associations has been continuously pressurising the DOT and the Government to refund these charges, which will help the PSUs to reduce their loss and utilise the funds for development. It had also submitted detailed memorandum to the GoM on this subject.
This is not charity, but only refund of the money for the surrender of the airwaves, which the government can again auction for mopping up funds.
The GoM has to take decisions still on the demand of the Joint Forum to mandate all the Central and state Governments and their PSUs that they should use BSNL/MTNL services. The proposal is already with the Government. Another major demand is to waive the Licence Fee for these government companies.
Our pressure should continue in these matters.

AP High Court suspends privatisation of Nizam Sugars Ltd.

09 Thursday Jan 2014

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HYDERABAD, JAN. 9:
The Andhra Pradesh High Court has suspended an Andhra Pradesh Government order that constituted a Group of Ministers (GoM) to review the course of action to be taken on the privatisation of Nizam Sugars Limited.

Acting on a public interesting litigation (PIL) filed by M Appi Reddy, Convenor of Nizam Sugars Protection Committee and others, the court has asked the State Government not to take any action on the privatisation of the sugar factory till it took a final view on the issue.

The GoM comprised Finance Minister Anam Ramanarayana Reddy, Major Industries and Sugar Minister J Geetha Reddy and Minister for Major and Minor Irrigation P Sudarshan Reddy. The Committee filed the PIL, challenging the GO (issued in December 2013).

The privatisation of Nizam Sugars Limited is one of the several issues on the agenda of pro-Telangana activists. The sugar factory, based in Nizamabad district, was set up by the Nizams about 80 years ago and went on to make profits till the end of the century. But the then Telugu Desam Government had decided to privatise the factory after it began to post losses.

“The High Court bench that heard the PIL directed the Government not to take any action on the PIL it further orders,” Chikkudu Prabhakar, Counsel for the petitioner, told Business Line.

Various Telangana political parties and organisations have threatened to launch an agitation, demanding the government to nationalise the sugar factory. (Business Line)

GoM on “Revival of BSNL, MTNL Meets today, 9th January 2014

09 Thursday Jan 2014

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The Group of Ministers (GoM) on Revival of BSNL/MTNL headed by the Finance Minister is meeting today, 9th January 2013. This is the fourth meeting of the committee. A report published in the “India Public Sector” dated 8th January is given below for information.

“Can the GoM on MTNL, BSNL chalk out a revival strategy for the loss making telecos?

STATE-owned telecom companies BSNL and MTNL are facing tough time. But a crucial meeting of the group of ministers (GoM) assigned the task of finding the course of profitability for MTNL and BSNL on Wednesday is likely to bring some cheers to the once-profitable jewels of the government. Will MTNL be able to cut its workforce? Will there be a proposal to develop its huge land resource in Mumbai and Delhi? Finally, will there be an effective revival strategy for both BSNL and MTNL? These and many other issues will be discussed in the fourth meeting of the GoM headed by finance minister P Chidambaram. BSNL has been incurring losses since 2009-10. BSNL’s profits started dipping after 2004-05, when it had made net gains of Rs 10,183 crore. Its losses stood at Rs 8,198 crore for 2012-13 against Rs 8,851 crore in 2011-12. The company had reported a loss of Rs 1,093.72 crore in the same period a year ago. Likewise, in 2012-13, MTNL recorded a net loss of Rs 5,321.12 crore on annual revenue of Rs 3,428.6 crore. The last time MTNL made a profit was in 2008-09, when it posted a net of Rs 205.9 crore on revenue of Rs 4,496.2 crore. After reporting widening of losses for nine quarters in a row, MTNL reported narrowing of its standalone net loss to Rs 947 crore for the July-September 2013.
The department of telecom (DoT) has put a number of issues for GoM for improving condition of MTNL and BSNL. These include a synergy between the two companies, waiver of one-time spectrum charges which amounting to about Rs 10,000 crore, waive off around Rs 980 crore principal amount of notional loan amount outstanding against BSNL among others.
The last meeting was held on September 12, 2013 when it decided on pension issue. The pension proposal of MTNL was approved by Cabinet recently that would cost the government an estimated Rs 500 crore annually. The decision is likely to bring additional amount of about Rs 1,500 crore (including interest) in the books of MTNL as refund from government for the pension that the PSU paid to its around 43,000 employees.
On January 9, Cabinet will discuss about refund of Rs 12,800 crore to MTNL and BSNL which the telecos had to pay for wireless broadband spectrum in 2010 auctions. This will be the biggest boost to the companies’ balance sheet. BSNL had to pay Rs 8,313.8 crore and MTNL Rs 4,534 crore for these airwaves which put a heavy burden on their books.
Both BSNL and MTNL have offered to surrender their BWA spectrum and sought refunds. The two companies did not have to buy spectrum in the auction but were asked to match the price that a successful bidder had to pay for the airwaves.
MTNL proposes to develop its large land banks in Mumbai and Delhi, where it operates. According to a recent presentation, MTNL has some 230,000 sq m of technical land and 380,000 sq m of residential land in Mumbai and Delhi. Commercial use of these lands will give the PSU a handsome profit. MTNL estimates it can earn as much as Rs 3,600 crore in the next three years by selling the built-up area developed from the land and Rs 400 crore from leasing some of it. MTNL has already earned some rent from some of its built-up space in the two cities—Rs 4 crore in Delhi and Rs 30 crore in Mumbai. It estimates total revenue from renting space at around Rs 66 crore for the full year.
Both BSNL and MTNL have a number of state-mandated social obligations to fulfil. Government interference in the functioning of the PSUs is another reason for its dwindling profits. Moreover, MTNL’s 42,000-employee workforce is three times its required strength. To cut staff, MTNL estimates it will have to spend about Rs 5,000 crore on a voluntary retirement scheme (VRS), making it the biggest such plan that the telco has offered. The current staff cost is around Rs 4,000 crore, including retirement benefits.
On the other hand, Bharti Airtel, India’s largest telecom services provider, has fewer than 18,000 employees across the country and outsources several functions.”

5% stakes of BHEL may be bought by other PSUs

05 Sunday Jan 2014

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In order to mop up funds to deal with the financial deficit, the Central Government is pressurising the cash rich PSUs to purchase shares of other PSUs. The disinvest programme projected to get about Rs.40,000 crore becoming a failure, the government has found out this new method.
It is now reported that other PSUs have shown interested in purchasing the 5% stakes of BHEL. This money will be used by the government for managing its financial deficit.

5% Increase in IDA w.e.f. January 2014

31 Tuesday Dec 2013

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The IDA increase from January 2014 is expected to be 5%. With the existing 85.5%, the total IDA eligible to be paid from January 2014.

But what about the 50% IDA Merger? No decision so far either by the Government for the Central Govt. Employees or by the DPE for the PSU staff.

The demand should be seriously raised by the unions and associations.

CPSTU Meets on 1-2 February 2014

27 Friday Dec 2013

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A meeting of the Steering Committee for Central Public Sector Trade Unions (CPSTU) is scheduled to be held on 1-2 February 2014 at CITU Centre, B.T.R. Bhawan, New Delhi to discuss and finalise the immediate issues and tasks before Public Sector Union movement.

The Public Sector is being attacked by the UPA-II government as never before. To weaken the PSU Banks, the government has decided to grant permission to Corporates to open banks. Disinvestment and privatisation of many PSUs are in the offing. The cash reserve of the profitable PSUs are being taken away by government by increasing the % of dividend to be paid by the PSUs. In the name of reforms, labour laws are being liberalised to favour the corporates and big business. Recruitment of regular workers are stopped/curtailed and contract workers are engaged who are not even paid minimum wages. Labour laws are not implemented, but blatantly violated. Bonus is being denied. Many other issues are pending settlement for a long time.
Naturally all these issues as also the task of continuing the struggles are expected to be discussed in the meeting. CPSTU has always been in the forefront of the struggles of the Public Sector workers.

EPFO to decide on New Fund Managers

27 Friday Dec 2013

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It is reported that the EPFO in its meeting on 14th January 2014 may decide the Fund Managers for its 5 lakh crore pension funds. At present there are four Fund Managers of EPFO viz. SBI, HSBC AMC, Reliance Capital and ICICI Securities Primary Dealership. These were appointed for a term of three years beginning September 1, 2011.

Before 2008, there was only one Fund Manager, State Bank of India, a PSU. In 2008, three private Fund Managers were included. Only 35% is now with SBI and the rest of the 5 lakh crore is with private FM. Whether the Private Fund Managers will be increasing this time. The chances are high, since the government’s policy is to favour the private more.
Till a Public Sector or Govt. FM is there, there will be competition and better interest. But once the Govt. FM is not there, others will form a cartel and reduce the interest on the funds drastically which will cause serious loss to the pensioners. In my opinion, only Govt. or PSU Fund Managers should be there so that the pension funds will be safe and market variations will not adversely affect it.

11 Sick PSUs allotted Rs.116 crores towards dues including wages

27 Friday Dec 2013

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The Cabinet Committee on Economic Affairs (CCEA) has allotted Rs.116 crores for payment of wages and other dues for the employees of 11 sick PSUs. These include HMT Machine Tools, Hindustan Cables, HMT Watches, HMT Chinar Watches, Nagaland Pulp and Paper, Triveni Structurals, Tungabhadra Steel Products, Nepa Limited, HMT Bearings, Hindustan Photo Films and Tyre Corporation of India.
All these PSUs were profit making and had given dividend to the government. It was only due to the neo-liberal policy and pro-private decisions of the government that they started posting loss. Hence it is the full responsibility of the Central Government to ensure that the workers engaged in these PSUs are paid their wages and dues in time. This is not happening. It is only after three or six months that the payments are made now. Other benefits are curtailed or completely stopped.
In the hurry to maximise the profit of the private sector, the public sector is completely ignored and the workers made the scapegoats.

MTNL Pension – News report

26 Thursday Dec 2013

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NEW DELHI: The Cabinet on Thursday approved a pension proposal for 43,000 MTNL employees, who joined the public sector company from Department of Telecom, that would cost the government an estimated Rs 500 crore annually.

The decision is likely to bring additional amount of about Rs 1,500 crore (including interest) in the books of MTNL as refund from government for the pension that the PSU paid to its employees. “The Union Cabinet today approved that the erstwhile all categories of employees of the government absorbed in MTNL and who have opted for combined service may be given similar treatment in the matter of payment of pensionary benefits as available to the absorbed employees of BSNL,” an official statement said.

This would means pension benefits would be available for their service term at DoT as well as their rest of the period at MTNL. The total number of such employees is estimated to be 43,000 which including 16,000 retired and about 27,000 existing employees of the PSU. “The proposal entails an estimated recurring expenditure of approximately Rs 500 crore per annum besides adjustments in respect of Government pension liability previously discharged by MTNL,” the statement said.

The pay scale at MTNL is comparatively higher to that of BSNL and the government will bear the cost of pension similar to the amount paid to the latter.

The difference in the pension amount will be borne by MTNL till the time of next pay revision when salaries at both the PSU will come at par. The next pay revision is expected to take place in 2017.(Courtesy: TOI)

Good News! Cabinet approves MTNL Pension

26 Thursday Dec 2013

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Good News are there for the MTNL Employees! The Cabinet has approved government pension for the MTNL absorbed DOT employees as in the case of BSNL employees.
The case was taken by the MTNL Unions/ Associations as also the Joint Forum of the BSNL/MTNL Unions/Associations with the DOT and the Government. The Group of Ministers appointed for the Revival of BSNL and MTNL had recommended that MTNL employees be granted government pension as in the case of BSNL absorbed employees by the government, but with the condition that the pension will be limited to the corresponding pay scales of BSNL. (The pay scales of MTNL are higher than that of BSNL). The GoM also recommended that the pay scales of BSNL should be brought on par with that of MTNL in the 2017 wage revision.
We congratulate the MTNL employees and their unions/associations in this great achievement.