The government is planning to transfer the land assets and loans of state-run operator Bharat Sanchar Nigam Limited (BSNL) to a special purpose vehicle (SPV). The move is reportedly been undertaken to make BSNL a debt-free entity.

The SPV is proposed to sell the land parcels and pay off BSNL’s debt, estimated to be around Rs 150 billion.

However, BSNL’s employees union has written to the telecom secretary alleging that the land parcels are being transferred to the SPV at a ‘throw-away price’. As per the union, the parcels valued at Rs 202.1 billion are located in prime locations at big cities and are ‘grossly undervalued’. Further, the union has said that the market value of the 63 land parcels identified for transfer to the SPV is very high. However, these are being transferred at a ‘dirt cheap price’ in the name of book value. As per the union, this process would result in a massive financial loss for BSNL.

The union has also stated that it had gathered information on the land parcel in Chennai and Kerala circle and found them grossly undervalued. In Chennai city, 8 land parcels are being transferred by BSNL to the SPV. BSNL’s management has determined the total market value of these land parcels as Rs 27.54 billion. However, the market value of these parcels comes out to be Rs 38.68 billion. Thus, it could be understood that in Chennai city alone, BSNL’s land parcels are being undervalued by Rs 12.63 billion, the union said in its letter.

In response, BSNL’s management has denied the allegations saying that the valuation has been done only on an indicative basis for the purpose of preparation of a cabinet note. Further, the management has stated that the final valuation will be done by a government registered valuer before disposing the proposed land parcels.