The Telecom Commission has agreed to the proposal to hive off the 770 acres of surplus land held by Tata Communications into a realty company.
The Commission has asked the Department of Telecommunications (DoT) to dispose of the asset, including overseeing its sale. This issue has been ongoing since 2003, as the numerous discussions between the Tata Group and DoT failed.
Prior to this, the Tata Group had created a company called Hemisphere Properties India (HPIL), with an authorised capital of Rs 2.5 million to hold the surplus land.
It is believed that the government plans to acquire a majority stake in this realty company. In July 2011, the Tata Group had informed the government that selling the surplus land could garner revenues of about Rs 61.56 billion. This was the first time the value of the land had been estimated since 2003.
Tata Communications had said that this estimated value is based on prevailing government rates and also takes into account that the land cannot be used for residential purposes. The company added that the stamp duty and registration costs of the demerger stood at Rs 4.27 billion.
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