The Department of Telecom (DoT) will soon float a draft cabinet note for auctioning 773 acres in four cities which was once owned by VSNL. The Tatas took over VSNL in 2002 but the land was kept out of the deal and is still owned by the government and other shareholders. The sale of the land could now fetch the government between Rs.6, 000 and 10,000 crore. ET had reported in February 2008 about the Telecom Commission, the policy wing of the department of telecom (DoT), approving the government proposal to auction the surplus land.

According to sources, the communications ministry aims to get cabinet clearance on this issue within the next three months and wants to have the auction by the year-end. Sources also added the same ministry was exploring the possibility of appointing an external agency to conduct the auction.

The government will get 51.12% of the sale proceeds in line with the shareholding structure of the land bank. VSNL employees in form of Esops hold 1.85% while another 21% is with foreign companies (shares held by the Bank of New York as depository for ADRs). Other shareholders include foreign financial institutions (10.86%), Indian public financial institutions & mutual funds (7.9%), general public (4.92%) and other Indian corporates (3.09%). The Telecom Commission has said that the Tatas, too, were eligible to participate in the auction.

Courtesy: - ET dtd: - July 5, 2008