• Investment World
• eWorld
• Catalyst
• Mentor
• Life
• Canvas
• Praxis
• Urban Pulse
• Brand Quest

Stocks

• Quotes
• SE Diary
• Scoreboard
• Open-End Mutual Fund

Port Info

• Ships in Ports
  
  

Archives

• Yesterday
• Datewise
• Resources

Group Sites

• The Hindu
• Business Line
• The Sportstar
• Frontline
• The Hindu eBooks
• The Hindu Images

Ashwini Phadnis

New Delhi , July 15

THE Ministry of Civil Aviation has decided to write to the Prime Minister, Dr Manmohan Singh, requesting that a mechanism be set up for taking another look at the multi-billion dollar fleet acquisition proposal of Indian Airlines (IA).

This comes in the wake of the Ministry of Finance requesting the Civil Aviation Ministry that another attempt be made to reduce the price negotiated for the 43-Airbus deal.

Interestingly, some Members of Parliament also questioned the cost of the project, especially as a South East Asia based low-cost airline is said to have negotiated a similar deal with Airbus at a lower cost.

"I will write to the Prime Minister requesting that either a Group of Ministers or Committee of Secretaries be set up as has been suggested by the Finance Ministry so as to quickly resolve this issue. This is in consonance with our earlier stated position that the price must be renegotiated. There is need for absolute transparency in the acquisition process as this is a high-value transaction," the Minister for Civil Aviation, Mr Praful Patel, told Business Line.

Officials added that the request of the Finance Ministry was not a "rejection" of the proposal that has been sent to them and indicated that the entire process would be completed within the next one-or-two months.

The Finance Ministry's concerns were taken up at a meeting between the Secretary Civil Aviation, Mr Ajay Prasad, and the Expenditure Secretary, Mr Adarsh Kishore, here on Tuesday. The Finance Ministry wondered whether IA was getting the best possible price from Airbus Industrie.

The airline's board had cleared the proposal for acquiring 43 aircraft at an estimated price of Rs 10,089 crore in March 2002. The proposal has already been cleared by the Public Investment Board (PIB). The cost of the acquisition has decreased by Rs 614 crore mainly due to exchange rate fluctuations.

Sources indicated that while the US dollar was being quoted at Rs 49 when the IA board approved the proposal, it is now being quoted at around Rs 44 , thus helping in bringing down the cost of the project.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Patel for settting up panel to study IA deal with Airbus

Copyright © 2005, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line