Asked about the process that would be followed for borrowing, Mr Seth saidthat money would be raised through private placement of bonds and added thatthe corporation would initiate negotiations for the same with banks andfinancial institutions soon. "We are working out the details including therate of interest to be offered and the process is likely to be completedwithin this month," Mr Seth said adding that actual budgetary shortfallwould be finalised soon.

Earlier, Mahanagar Telephone Nigam Ltd (MTNL) used to raise money for theDepartment of Telecommunications (DOT), a process that was discontinuedafter incorporation of BSNL on October one, last year. In a move to empowerthe corporation, government had recently transferred investment power oftelecom commission to BSNL enabling the latter to take virtually allinvestment decisions. Asked about immediate investment plans of thecorporation, Mr Seth said: "Internal examination of various projects wasgoing on and final decision with regard to investment would be takensoon."

The corporation is also working in tandem with the finance ministry tofinalise the financial structure, Mr Seth said responding to a questionabout its financial performance during the first quarter of working(October-December, 2000). Global consultant a F furgueson, which hadprepared the road map for corporatising the Department of T.telecom Services(DTS), was in the process of helping the corporation to become a fullycommercial entity, sources said. Earlier communications ministry had askedministry of finance to exempt the newly created BSNL from payment ofdividend and taxes for the next five years to enable the new entity save upto Rs 1000 crore annually. DTS had accounted for gross profits of over Rs7,000 crore in the last fiscal and given the current situation BSNL waslikely to improve the gross margin. Government launched BSNL on October onewith authorised capital of Rs 10,000 crore while giving Rs 5,000 crore aspaid up equity.