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111 jets at ₹70,000 crore: Air India under ED lens for deal during UPA rule

Author: Devesh K. Pandey
Publication: The Hindu
Date: May 13, 2018
URL:      http://www.thehindu.com/news/national/111-jets-at-70000-crore-air-india-under-ed-lens-for-deal-during-upa-rule/article23874288.ece?utm_source=email&utm_medium=Email&utm_campaign=Newsletter

Agency will also go into leasing of planes and surrender of profit-making routes.

 The Enforcement Directorate has initiated a probe into alleged irregularities in the procurement of 111 aircraft worth about ₹70,000 crore, leasing of planes and the surrender of profit-making routes and flight schedules by Air India under the UPA regime.

The agency is currently examining the processes that were adopted in finalising the respective contracts and their implementation; besides the decisions taken for the surrender of profit-making routes and schedules, to the alleged benefit of private airlines.

Quantification of the amounts involved is also under way and domain-specific experts may be roped in for the purpose.

Three FIRs filed last year

The probe has been initiated following the registration of three FIRs by the Central Bureau of Investigation on May 29 last year. The CBI had also instituted a preliminary enquiry into the Indian Airlines-Air India merger in 2007.

The Central government, in December 2005, cleared the proposal for the purchase of 68 aircraft from Boeing and the next year, Indian Airlines also signed up for buying 43 aircraft from Airbus.

The CBI cases are against unknown officials of the Civil Aviation Ministry and Air India, registered pursuant to the Supreme Court’s directives on January 5 last year while hearing a PIL plea by the non-government organisation, Centre for Public Interest Litigation (CPIL).

‘Govt. suffered losses’

One FIR pertains to allegations of irregularities in the aircraft purchases. “The action [of making the purchases] was taken dishonestly and in conspiracy with other unknown persons on extraneous considerations and resulted in pecuniary benefit to private companies and huge financial loss to the government,” it alleged.

‘Loans taken from U.S.’

The FIR also alleged that loans were taken from the U.S. and Indian banks to finance the same, causing the airlines to go into debt.

In December 2017, the Supreme Court directed the CBI to conclude the probe into the aircraft purchases in the next six months.

Another FIR alleges that a large number of aircraft were leased without due consideration, proper study of routes and marketing/price strategy. It has also been alleged that the aircraft were leased while an aircraft acquisition programme was already under way.

The third case involves the allegations that profit-making routes and schedules of Air India were given up in favour of national and international private airlines, which resulted in huge losses to the national carrier.
 
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