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No DoT reply on surplus land: Tata Comm

April 26, 2011 11:55 IST

Tata Communications on Monday said it had not received any communication from the Department of Telecommunications (DoT) on the issue of demerger of the company's surplus land.

A report by a DoT panel is known to have said the department had decided to demerge the extra land into a real estate company.

The panel was appointed by the communications minister and had ordered a probe last month into a delay in the demerger process.

"Apart from asking us to share copies of earlier correspondence, the DoT panel has not sought our views or comments," the company said in a questionnaire.

Tata Communications, earlier called VSNL, was taken into the Tata fold as a part of the government's disinvestment in 2002.

Around 773 acres of land, which was a part of VSNL, was originally meant to be divested from the entity.

The tracts of land exist in the posh Greater Kailash area of New Delhi as well as Pune, Kolkata and Chennai.

An official, who refused to be quoted, said the process of demerger into a real estate company was not easy as the land had a clause which said it had to be used only for telecom purposes.

VSNL acquired large stretches of land at least 40 years back when the satellite technology required a lot of space.

"Since then, technology has evolved and we no more require huge spaces for telecommunications," he said.

Tata Communications said it sought the demerger of surplus land, subject to certain conditions and that a draft scheme of the demerger was prepared in April 2005.

"But a decision was deferred till DoT and the Tata group agreed on those issues. Subsequently, DoT informed Tata Communications that they were seeking instructions within the government. Tata Communications welcomes any progress in resolving the surplus land issue at the earliest," the company said.

The panel report has also blamed the Tatas for delaying the demeger process. Tatas had opposed the scheme until the government gave an assurance that the company would not be liable to pay capital gains tax for the demerger transaction.

The company argues that since it does not legally own the land, it should not be liable for paying tax.


BS Reporter in Mumbai