Saturday, March 6, 2010


6 March 2010




From R Rajagopalan

NEW DELHI: Union Communications and IT Minister A Raja shot off a
terse note to the Prime Minister's office two days ago, shooting down
a plan recommended by a PM-appointed panel headed by telecom czar Sam
Pitroda to revive flagging fortunes of the state-owned telecom firm
Bharat Sanchar Nigam Limited (BSNL) by offloading its 30 per cent
stakes in stock markets through an IPO (initial public offer) and cut
down staff strength by one-third from 3 lakhs to 2 lakhs.

Raja, who belongs to DMK, sensed a massive labour trouble in BSNL that
may impact even fortunes of his party in DMK supremo and chief
minister M Karunanidhi planning early Assembly polls in Tamil Nadu in
September instead of letting it complete full term in May 2011. He is
believed to have consulted Karunanidhi before dashing off a 4-point
confidential note on Thursday to the Cabinet Secretary and the
Principal Secretary to the Prime Minister.

Pitroda, who is credited with laying foundation of India's telecom
revolution a quarter century ago as part of then Prime Minister Rahul
Gandhi's team, wants 20 per cent of the BSNL share sales used to
relieve some one lakh employees that he found surplus by offering them
VRS (voluntary retirement scheme).

Raja has tried to scuttle his proposal by suggesting in his
confidential letter that his panel's recommendations amount to a major
policy change that should be better placed before the Telecom
Commission for a view.

Sources said his prime concern is the kind of retrenchment recommended
by Pitroda who has not to bear political fallout of such an
anti-labour act that will certainly adversely affect the UPA
government's image.
Already under attack for 2G spectrum allocation controversy that is
under the CBI probe, Raja does not want to get into a labour problem
in the BSNL, sources said.

Here is a copy of Raja confidential note accessed by this correspondent:



Discussed with Secretary (T) and CMD BSNL. The purpose for which the
reference has been made to the Committee headed by Sam Pitroda is not
fulfilled despite the fact that the management Committee of BSNL
accepts the concepts of transition.

2.  Wider implications on retrenchment  of staff and immediate
requirement of BSNL till the new system is adopted have to be
addressed at length in the BSNL Board.

3.  The decision of the BSNL Board may be placed before the Pitroda
committee which may be requested to convene a meeting in Delhi so that
if any further clarifications required by the Committee can be
provided by the BSNL.

4.  If it is once decided to switch to new system of management
services, if should be placed before the full Telecom Commission since
it is a major policy change and decision with respect to the BSNL.





Besides recommending an IPO of BSNL to offload 30 per cent stakes and
reduce the large workforce, Pitroda has also recommended that it be
managed by three top executive hired from the private sector who can
bring a business culture in the company. He also wants BSNL to raise
funds by selling its infrastructure like the signal towers and real
estate and pointed out how it can not stand up in the extremely
competitive industry by continuing to follow antiquated procedures of
bureaucratic decisions.

Worried over the steep decline of BSNL's fortunes, the Prime Minister
had called in Pitroda to head a panel with banker Deepak Parekh and
Telecom secretary P J Thomas as members to suggest revival measures.
Sensing that the panel's recommendation to sell 30 per cent stakes
fits into the UPA government's declared policy of disinvestment while
not allowing the government share go below 51 per cent, Raja wants the
Prime Minister review the disastrous effect of other recommendations
of the panel.

BSNL is the second largest government body after Railways having a
nationwide infrastructure while Raja's worry is that it would lose the
dominant status it enjoys if he meekly yields to Pitroda's suggestions
to loosen the government's control over its working.

The Pitroda panel has underlined the BSNL's problem of interference by
the bureaucracy that rules over the business decisions of the company,
without probably understanding the nuances of the business itself.
"Allow the ministry to interact only through board representation and
board meetings and not through day-to-day decision-making, interfacing
and supervision," the panel has stressed.


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