DoT okays BLT for telecom projects

NEW DELHI, Aug 2: The Department of Telecommunication DoT has approved in principle the proposal to utilise build, lease and transfer BL...

NEW DELHI, Aug 2: The Department of Telecommunication DoT has approved in principle the proposal to utilise build, lease and transfer BLT as an alternative route as a source of funding for critical telecom projects.

The BLT approach will help DoT to raise resources for capital intensive projects especially after DoT8217;s recent proposal for retaining 25 per cent share of the licence fees was struck down by the Finance Ministry. The BLT proposal, however, is yet to be approved by the Cabinet.

The DoT has been planning ways and means for raising resources for building networks especially in circles where the bidding process did not yield any prospective takers. The decision was arrived at a recent meeting of the Full Telecom Commission which consists of secretaries from the ministries of finance, industry, Department of Electronics, Planning Commission apart from the DoT secreatry and other full time members of the Telecom panel.

The DoT is currently working out the modalities of the BLT proposal as to what would be the period for which such projects would be handed over to the private parties, both domestic and foreign, and the conditions under which such an arrangement could be worked out.

Similar schemes already exist in other infrastructure sectors such as surface transport and power, and the DoT wants to promote similar ventures in the field of telecommunications where investments in infrastructure are normally high and returns are comparatively low for the first few years.Though the BLT proposal might be DoT8217;s answer to the problem of financing of basic telecom services, it is likely to run into serious problems. Industry experts claim that had such an option been open before bidding for the basic telecom circles began, several of them would have gone in for this as it is a cheaper alternative. This way, these operators would not have to pay huge licence fees, running into thousands of crores, in some cases.

It would be recalled that the original proposal for BLT originated from World Tel, a London-based international telecom finance body headed by Sam Pitroda former chairman of the Telecom Commission during the Rajiv Gandhi years. World Tel had made a proposal to the DoT last year for building basic services in Bihar, Uttar Pradesh and Orissa. World Tel has financed several rural circles in developing countries such as Brazil, China, Indonesia and East African countries. This proposal was kept pending since the government was still grappling with the problem of getting the private operators.