Govt to shut down Air India, MTNL, HMT & few Others

Discussion in 'Economy & Infrastructure' started by Kunal Biswas, Mar 12, 2015.

  1. Kunal Biswas

    Kunal Biswas Member of the Year 2011 Moderator

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    Govt to shut down Air India, MTNL, HMT & few sick units?

    Five public sector undertakings (PSUs) will be closed down by the government, which has included some of the best known state-run enterprises like Air India, MTNL and Hindustan Shipyard, in the list of 65 sick PSUs, Lok Sabha was informed on Tuesday.

    Read more at: Govt to shut down Air India, MTNL, HMT & few sick units? - Moneycontrol.com
     
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  3. Ray

    Ray The Chairman Defence Professionals Moderator

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    Good.

    It is alright to have national industrial icons in the Public Sector, but they cannot bleed the Nation red just on ground of having icons for nation pride.
     
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  4. Yusuf

    Yusuf GUARDIAN Administrator

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    Privatizing a better thing to do than shut down.
     
  5. Illusive

    Illusive Senior Member Senior Member

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    I use MTNL, and many of my friends use it, i hope they reconsider since MTNL is making profits, they should do cost cutting.
     
  6. Ray

    Ray The Chairman Defence Professionals Moderator

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    I am sure that is the aim.

    Shipyards, at least, is the future to India's projecting its strategic and commercial reach and it's infrastructure cannot be left lying idle.

    Though I am surprised about MTNL.

    As far as Air India goes, it is good that the pampered lot and their irresponsible trade union class will soon be jobless and deprived of their charmed and protected and pampered lives.

    However, unless there is 51% FDI, foreign firms will not like to chip in. The FDI in defence inspite of a huge domestic defence market has not made
     
    Last edited: Mar 12, 2015
  7. thethinker

    thethinker Senior Member Senior Member

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    Not confirmed if MTNL and AI will be shut down. They are on the loss making PSU list though.

    Five sick PSUs to be closed down: Govt in LS | Business Standard News

    The five state-run organisations to be closed down include three HMT units whose brand of watches and tractors once ruled the market, Heavy Industries Minister Anant Geete said during Question Hour, adding that their employees were being offered a "very good" VRS package.

    However, he did not name the other PSUs which are slated to be closed down.

    Air India and MTNL, once market leaders in aviation and mobile telephony sectors respectively, were declared sick as per the criteria for a PSU to be declared as such, after they incurred losses worth 50 per cent or more of their average net worth during four preceding years.

    The Minister said there were 65 units in the list of sick PSUs as of March 31 last year. The reasons for their sickness vary from enterprise to enterprise and included obsolete plants and machinery, heavy interest burden, resource crunch, surplus manpower and shortage of working capital, he said.

    Air India accumulated losses of Rs 5388 crore, Rs 5490 crore and Rs 7559 crore in years 2013-14, 2012-13 and 2011-12 respectively, according to the figures tabled in the House.

    MTNL showed profit of Rs 7820 crore in 13-14 but had incurred losses of Rs 5321 cr and Rs 4109 cr in the previous years. Hindustan Shipyard Limited posted losses of Rs 859 crore, Rs 551 crore and Rs 462 crore in the three years.

    Geete said the concerned administrative ministries "prepare proposals for revival or otherwise of sick companies on case to case basis and obtain approval of the government.
     
  8. Bangalorean

    Bangalorean Stars and Ambassadors Stars and Ambassadors

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    I think "closing down" is a euphemism for privatization @Yusuf. I think the reason is that if the govt. uses the word "privatization", we don't have a shortage of idiots like Mamata, Derek O'Brien, Yogendra Yadav, Lalu, Mulayam, etc. who will scream and moan about "selling out to corporates".

    It makes no sense to simply shut down units and let the assets go waste. Everything will be sold, and will generate humungous amounts of money.
     
    Last edited by a moderator: May 10, 2015
  9. Prometheus

    Prometheus Regular Member

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    If MTNL showed a profit of Rs 7820 crore in 13-14, I don't think they should be shut down, as they have already achieved a turn over
     
  10. anoop_mig25

    anoop_mig25 Senior Member Senior Member

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    Late to rply but i donot want MTNL either to be shut-down or ptivitiazied

    Atlest it provides good broadband connection at cheap rates without discconection

    Most of private service providers loots common public in name of speed rest may be closed

    For AIRIndia/Indian airlines why not make it private ltd with limited gov holidngs
     
  11. smestarz

    smestarz Senior Member Senior Member

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    MTNL is making profit and can make profit, what has happened is policy paralysis as whatever ideas they have are far too late.

    For example MTNL broadband,
    Rs 550 one can get unlimited internet at 1 mbps download and 512 kbps
    and for 2 Mbps they charge Rs 4999, and for 4 MBPS they charge Rs 9999 per month

    Now, I have internet from local cable guy, that costs me Rs 1000 for 8 MBPS line,

    MTNL need to see which packaages are failing and why?

    Another example is 3G pack, earlier they had 3G mobile internet pack at Rs 4500 for 6 months unlimited, a wonderful pack and I used it to the fullest but then they stopped it and now its Rs 1199 for 1 month, rather when prices everywhere is coming down, MTNL are the ones who are pricing it up, so why would people go for them?

    They are losing the market and that seems to be the general idea, they still make salary no matter what, private company would have fired the buggers.
     
  12. Illusive

    Illusive Senior Member Senior Member

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    Like i said before MTNL should do cost cutting, that means laying of some. India should be able to develop more satellites in geosync orbit for higher speed at a lesser price, its ridiculous the spectrum prices are so high.
     
  13. smestarz

    smestarz Senior Member Senior Member

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    The spectrum prices are high but then there are enough customers.

    I see the problem in different way, Telephony rules are same for every player, so MTNL in a way has benefit rather than loss,
    It has basic structure all available, also it has one of the top customer base. So why is it failing?

    1. Lack of vision,
    The leadership of MTNL does not understand telephone business, at least I feel so, MTNL has big customer base, and yes many of the land line customers have migrated to Mobile, but they have not gone to MTNL but someone else.
    The MTNL service is not so good and customer care non existent. The Top people of MTNL do not understand pricing and as I explained in example given above. IT is not only about cost cutting, my question is WHY THEY DONT UNDERSTAND THEY HAVE TO BE COMPETITIVE?
    Or else do they want to show they are in loss and then be sold to the Ambanis ?
    Both MTNL and Air India have resources, but what they lack is leadership with vision who can compete with other players.
    Solution would be to hire a team of people who are from the industry and make their panel and then study their findings and then solve them as per the findings.

    b) India should ensure that the main resources should have govt control. like Water supply (entirely govt). Electricity supply and production (try not to involve private, deprivatise this sector) Dis-invest in Air India as most of the chiefs of Air India were using it as their own fief, but we need to keep MTNL and BSNL.

    c) Doordarshal should be overhauled and made more competitive, they have their own studios and should get involved in production of Sponsored / commercial serials.

    Seems the main problem of most failing govt organisation is lack of competent leadership
     
  14. SADAKHUSH

    SADAKHUSH Senior Member Senior Member

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    I think they should privatize them and use the proceeds towards new Government projects. We cannot afford to put all those employed out of jobs. The Government should provide more details on these plans.
     
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  15. thethinker

    thethinker Senior Member Senior Member

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    MTNL is not shutting down.

    No Plan to Shut Down Sick PSU MTNL: Telecom Minister | NDTV Gadgets

    There is no plan to shut down loss-making telecom company MTNL, and the government is taking various measures to revive it, Union Minister Ravi Shankar Prasad on Thursday said.

    His comments follow Heavy Industries Minister Anant Geete's statement in Parliament on Tuesday that five public sector undertakings (PSUs) which are in the list of 65 sick PSUs would be closed down.

    The list of sick PSUs include MTNL, Air India and Hindustan Shipyard. The five PSUs to be closed down include three HMT units, Geete had said. He, however, did not name the other PSUs which are slated to be shut.

    "There is no plan to close down MTNL," Prasad told PTI when asked if MTNL is among the probable PSUs that would be shut down.

    Air India and MTNL, once market leaders in aviation and mobile telephony sectors, respectively, were declared sick as per the criteria for a PSU to be declared as such, after they incurred losses worth 50 percent or more of their average net worth during four preceding years.

    MTNL, which provides telecom services in Delhi and Mumbai, has been losing market share over the last many years. Its market share in wireless has come down to 0.36 per cent and wireline to 13.10 percent at the end of January.

    The government is taking various measures to revive MTNL which includes refund the amount MTNL paid for acquiring broadband wireless spectrum (BWA) in 2010.

    The government had also approved pension support to MTNL for about 43,000 employees who joined the state-run firm from the Department of Telecom.

    MTNL had reported a standalone net loss of Rs. 730.83 crores for the third quarter ended December 31, 2014.
     
  16. archie

    archie Regular Member

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    I dont think Air India or Mtnl will be privatised.. Govt Needs them lest the private players overrun completly and will have undue power against govt(Same Reason why AIR still works so is DD).. but this is a good startgy to force the employess to stand up and take notice .. Deliver or perish statement
     

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