The Hindu Business Line : IA fleet proposal: CCEA meet tomorrow to decide on issue of clearance

INDIAN Airlines (IA) could move closer to acquiring the 43 Airbus aircraft with the Cabinet Committee on Economic Affairs (CCEA) expected to decide whether the proposal needs to be cleared by a Group or Ministers (GoM) or a Committee of Secretaries (CoS) at its meeting scheduled for Thursday.

Earlier, the Union Minister for Civil Aviation, Mr Praful Patel, had written to the Prime Minister, Dr Manmohan Singh, requesting that a GoM/CoS be set up to study the fleet acquisition proposal. However, with no decision forthcoming as yet from the Prime Minister's Office (PMO), there was a view that a Cabinet note could be prepared to take a decision on the matter.

Earlier, the issue of how much the acquisition was costing IA was raised by a Parliamentarian who sought to know whether the state-owned airline was paying more, since a low-cost airline in South-East Asia was said to have purchased similar planes at a lower cost.

The Finance Ministry also raised objections on the price of the acquisition and suggested that a GoM or CoS be set up to look into the airline purchase plans. The IA board cleared the proposal to purchase the aircraft in March 2002 at an estimated cost of Rs 10,089 crore. However, according to latest estimates, the acquisition is now likely to cost Rs 10,237 crore. The proposal also got the nod of the Public Investment Board last November.

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