The Hindu : Front Page : Air India fleet purchase plan on the anvil

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Friday, Nov 04, 2005

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Air India fleet purchase plan on the anvil

Plan has to be vetted by Oversight Committee, Cabinet Committee on Economic Affairs

New Delhi: Air India's Rs. 40,000-crore fleet acquisition plan from U.S. manufacturer Boeing will be vetted next week by a high-power committee to ensure that the about $9 billion deal is fool-proof.

After a crucial meeting with Civil Aviation Minister Praful Patel on Thursday, Finance Minister P. Chidambaram told PTI, "I am monitoring the progress. Everything is done. The proposal will now go to the Oversight Committee."

The Oversight Committee, headed by the former Comptroller and Auditor-General, C.G. Somiah, was set up by the Government to vet the acquisition plans for both Indian Airlines and Air India, is likely to meet on November 8.

After the oversight panel approves the deal, a Cabinet note would be prepared, Mr. Chidambaram said. The Cabinet Committee on Economic Affairs would give the final nod for Air India to formally enter into the deal.

In April this year, the AI Board had approved a proposal to acquire eight Boeing 777-200 (Long Range), 15 B777-300 (Extended Range) and 27 B787s at a total estimated cost of about Rs. 30,000 crores prior to the negotiations with the U.S. company.

The Board had also decided to purchase 18 B737-800s for its subsidiary Air India Express at a cost of about Rs. 10,000 crores.

The two proposals of the AI Board to acquire 68 aircraft were cleared by the Public Investment Board (PIB) on October 13.

The PIB also recommended the grant of sovereign guarantee on the credit to be taken by the international flagship. — PTI

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