The Telecom Commission, the apex body of telecom department, will decide on July 5 whether to hive off or demerge into a resulting company the 773.13 acres of surplus land of erstwhile VSNL (now Tata Communications ).

"The commission will take a decision on the demerger or hiving off of surplus land of erstwhile VSNL into a resulting company," a telecom department source said.

Earlier a penal set up by telecom minister Kapil Sibal had recommended that the DoT should park surplus land controlled by Tata Communications into a new realty company, the first of three possible methods that had been proposed for the separation of the land from the company.

The three-member panel investigating the delay in the demerger of the 773 acres of surplus land after the privatisation of VSNL, the former long-distance monopoly, has also held the Tatas responsible for the impasse. It had said the government must acquire 51.12% stake in this realty firm and nominate majority directors in it.

Tata group company Panatone Finvest Limited had acquired controlling stake in Videsh Sanchar Nigam Limited (VSNL) on February 13, 2002, for Rs 1,439 crore as part of the disinvestment programme of the then NDA government.

Besides, the Tatas had also made an open offer to acquire additional 20% stake from the market.

Earlier, Government had asked for expression of interest to sell off the surplus land lying with the DoT on the five sites located -- Dighi-Pune, Halishahar- Kolkata, Chattarpur-New Delhi, Greater Kailash-New Delhi and Padianallur-Chennai.

Even Tata Communications Chairman Subodh Bhargava had written a letter to Telecom Minister Kapil Sibal over disinvestment of the surplus land of TCL.