The Hindu : National : Transparency in aircraft purchase plans: Minister

Online edition of India's National Newspaper
Wednesday, Dec 21, 2005

National

National

Transparency in aircraft purchase plans: Minister

Special Correspondent

Air India, Indian to raise funds on their own

Praful Patel

NEW DELHI: The Central government would give sovereign guarantee for the mega aircraft acquisition plan estimated at about Rs. 48,037 crores by the two public sector carriers — Air India and Indian Airlines, the Rajya Sabha was told on Tuesday.

The two carriers would go for market borrowings and internal accruals without shifting any burden on the government, Minister of State for Civil Aviation Praful Patel said.

Defending the aircraft purchase plan, Mr. Patel asserted that the entire process of negotiations with the two aircraft manufacturers — Airbus Indusrie, a European consortium and Boeing, U.S.-based company — has been fully transparent as the government introduced several levels of checks to get the best possible deal.

Replying to Janata Dal (United) member Sharad Yadav's query during Question Hour, Mr. Patel said the process had already taken 16 years as the last aircraft purchase plan was approved by the Rajiv Gandhi government.

The Air India-Boeing deal was last week referred by the Cabinet Committee on Economic Affairs (CCEA) to the Empowered Group of Ministers (EGoM) to have one last round of negotiations with the Boeing company in a bid to extract whatever concessions the government could for purchasing 68 passenger planes, he said.

Indian Airlines has already, after all government approvals, signed the deal with Airbus for 43 passenger aircraft.

Member's suggestion

Mr. Yadav, himself a former Civil Aviation Minister, asked the Government to reconsider the decision on the purchase of aircraft and instead go for the lease route. He argued that it would impose a burden on the exchequer.

He said the government should opt for "wet leasing" of planes as there was technological manpower available in the country, adding that several planes were available in the international market.

"I think you are meaning dry leasing," Mr.Patel said adding the government was committed to strengthening the fleet strength of national carriers and increase their capacity so that they could compete well in the global and domestic markets.

Mr. Yadav's remarks on the aircraft deal drew some protests from the ruling party members.

Responding to a query from CPI (M) member Sitaram Yechuri, Mr. Patel said there was no proposal at present to merge Air India and Indian Airlines. While the deal for the purchase of 43 Airbus A-319, A-320 and A-321 aircraft for Indian Airlines had been clinched at Rs 9,888 crores as against the earlier proposed Rs 10,237 crores, the Air India deal was estimated to be Rs. 33,197 crores for 50 aircraft and another Rs. 4,952 crores for purchasing 18 Boeing 737-800 aircraft for Air India Express, the low cost arm of Air India operating flights between Kerala and the Gulf sector.

Printer friendly page
Send this article to Friends by E-Mail

National