The merger of BSNL and MTNL has been deferred because of the high debt of MTNL, Parliament was informed on Wednesday.

The government had approved the revival plan of Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL) on October 23, 2019.

“Due to financial reasons including the high debt of MTNL, the merger of MTNL with BSNL is deferred,” minister of state (MoS) for communications Devusinh Chauhan told the Lok Sabha in a written reply to a question by BJP MP Nitesh Ganga Deb.

MTNL and BSNL CMD P.K. Purwar had told the parliamentary standing committee that BSNL was expected to turn profitable by 2025-26. The survival of MTNL was not possible because it had debt of over Rs 26,000 crore and revenues of Rs 1,300 crore.

The Parliamentary Standing Committee on Communications and Information Technology had proposed the telecom operations of MTNL be merged with BSNL. The telecom department should also carve out MTNL’s debt and assets worth over Rs 26,500 crore into a special purpose vehicle.

Chauhan said the selloff department of the finance ministry has appointed consultants to monetise six assets of MTNL worth Rs 5,158 crores. “Out of these properties, two properties (reserve price of Rs 290 crore) have been taken for e-auction.”