The Central Vigilance Commission (CVC) is learnt to have ordered an inquiry into Air India’s decision to purchase 111 aircraft for Rs55,000 crore four years ago.
The Central Vigilance Commission (CVC) is learnt to have ordered an inquiry into Air India’s decision to purchase 111 aircraft for Rs55,000 crore four years ago and then persist with it despite its poor financial condition, falling passenger share and the current global meltdown.
Of the 111 aircraft, 68 are to be delivered by the American firm Boeing while 43 will come from Europe’s Airbus. In the past three years, 48 of the 111 have already joined the fleet. Currently, the National Aviation Corporation of India Limited (NACIL), the company formed after the merger of Air India and Indian Airlines, has a fleet of 155 aircraft, including leased ones.
Sources told DNA that the CVC is expected to examine the insistence of the civil aviation ministry and the Air India board to go ahead with the commitment to buy new aircraft even though the airline has asked the government for Rs 15,000 crore as financial assistance and deferred salary payments.
Following a private complaint it received a few days ago, the CVC has asked the chief vigilance officer (CVO) of Air India to submit a comprehensive report, the sources said.
Many experts, employees and political leaders blame aircraft purchases for the national carrier’s current financial mess, for which fingers have often been pointed at the civil aviation ministry under Praful Patel and the airline’s board.
NACIL’s refusal to scale back purchases even when other airlines such as Jet and Kingfisher pruned their orders has baffled many. BJP leader Kirit Somaiya last week alleged that the purchases would cost the carrier Rs67,000 crore, including interest. “The real reason behind the financial crisis is the interest burden, repayment and overhead expenses. The CAG and CVC should conduct a full-fledged inquiry into the need, requirement and project proposal of this huge purchase and its financial burden,” he said.
The Federation of NACIL Employees has demanded a joint parliamentary probe into the purchases. They argue that the huge aircraft order and expensive lease agreements are turning out to be blunders. The union has questioned the selection procedure for finalising the purchases and the management’s reluctance to reschedule aircraft delivery.
NACIL, meanwhile, has accumulated losses amounting to Rs7,200 crore by May-end, with Rs600 crore registering in April-May alone. Having spent over Rs20,000 crore on aircraft purchases, the present financial crisis of the company isn’t very surprising. The projected annual turnover of NACIL this year is only around Rs16,000 crore.
Two other flawed collaborations blamed for causing huge losses — a contract with a global cargo giant and another one for ground handling — were actually stalled after the CVC’s interference, saving at least Rs600 crore annually, insiders said. NACIL is also learnt to have leased out a huge tract of land to the privately-run Mumbai airport for a significantly low sum.
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
)
){kind=small}
){kind=small}
)
)
)
)
)
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}