Bidding of BSNL land assets fails to garner interest

The first ever auction of non-core assets through the Department of Investment and Public Asset Management’s (DIPAM) asset monetisation portal has failed to garner adequate response for land assets of Bharat Sanchar Nigam Ltd (BSNL) that was expected to garner at least Rs 470 crore.

The DIPAM has asked its property consultants to identify issues in the bidding criteria that can be resolved.

In November 2021, the DIPAM had listed six properties of BSNL and MTNL for sale through its new e-bidding portal for asset monetisation portal developed by state-run MSTC.

Monetisation of MTNL and BSNL assets was also part of the revival package announced by the Centre in late 2019, and the Department of Telecom was expecting Rs 3,000 crore from sale of all six properties which included four land parcels of BSNL and land and residential flats owned by MTNL in Mumbai.

Only some flats put up for sale by MTNL have received some response from bidders while BSNL’s Hyderabad land valued at around Rs 400 crore and Rajpura land valued at nearly Rs 70 crore has got no takers, said an official.

However, it is learnt that bidding for all six assets will take place again due to inadequate response from bidders for these properties.

This comes even as the government-appointed property consultants, in their preliminary evaluation, had found greater interest in acquiring such assets by interested parties.

The DIPAM has asked its property consultants to identify specific issues that have led to unimpressive participation from the private sector.

They have also been asked to determine changes in terms and conditions that are needed to be relaxed, the official said.

CBRE South Asia Pvt Ltd, JLL Property Consultants (India), Cushman & Wakefield, and Knight Frank (India) Pvt Ltd are acting as consultants to the government for the sale of 6 properties of BSNL and MTNL

The minimum bid that was invited from bidders for BSNL’s 11 acre land in Hyderabad was Rs 402 crore, and interested parties were required to have a minimum net worth of Rs 100 crore.

Another property put up on the block that failed to garner interest was BSNL’s 20 acre land in Rajpura.

The government had sought bids of at least Rs 70 crore from interested parties with net worth of Rs 17 crore.

Other properties that were put up for sale were over 5 acre land in Bhavnagar, Gujarat and 11 acre land in Kolkata.

The bidding is a two stage process, and the highest bid received in the tender stage becomes the floor price for the auction in the next stage which is e-auction bidding.

Once the evaluation by property consultants is complete, the properties will be auctioned again through the online bidding process.

Even as the first auction hasn't been a success, the centre is of the view that the process of asset monetisation through the newly launched portal with MSTC has been tested, and would help in monetising non-core assets of PSUs and government departments.

DIPAM assists PSUs in selling assets through the monetisation portal if the value of assets exceed Rs 100 crore.