Govt to revive ITI on PPP basis


The UPA government is planning to revive the ailing Bangalore-based Indian Telephone Industries (ITI) and is in search of a partner company to develop it under the public-private partnership model.

The Communications Ministry has invited expressions of interest (EoIs) from global equipment makers and equity investors to buy out or pick stakes in three of the six manufacturing plants run by the telecom hardware firm. “The government has kept all options open, including sale of its stake, development of the ITIs under joint venture or buy out of entire units,” Telecom secretary Siddharth Behura told Deccan Herald.
During 2005-07, the government had given Rs 1,025-crore aid to the company as part of a bailout package.

The company sought an additional aid of around Rs 2,500 crore last year to write-off losses worth Rs 2,820 crore. As it was struggling to pay salary to its employees, the government recently approved an interest free loan of Rs 125 crore to the company.

Even the Board for Reconstruction of Public Sector Enterprises (BRPSE) had recently asked the state-owned telecom major Bharat Sanchar Nigam Limited (BSNL) to take over the ITI. However this proposal was dropped after BSNL employees resisted to the idea.
The ITI has around 13,000 employees in its plants in Bangalore, Makjapur, Rae Bareily, Naini, Srinagar and Palakkad and in the quarter ending in March 2009, it recorded a net loss of Rs 191 crore.

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