The Hindu Business Line : e-GoM to announce IA's price for Airbus acquisition today

SEEING EYE TO EYE: The Union Finance Minister, Mr P. Chidambaram, and the Union Minister for Civil Aviation, Mr Praful Patel, on their way to attend the eGoM meeting on Airbus purchase in the Capital on Tuesday. - Kamal Narang

New Delhi , Sept. 6

A FINAL decision on the price that Indian Airlines will pay for acquiring 43 Airbus aircraft is expected on Wednesday.

The four-member empowered Group of Ministers, which had extensive discussions with the European aircraft manufacturer Airbus Industrie and engine manufacturer CFM, here on Tuesday, is likely to announce a final decision on Wednesday, the Minister of Civil Aviation, Mr Praful Patel, said after the meeting. "We have concluded the discussions with the aircraft and engine manufacturers and there will be no further rounds of talks with them. We will have internal discussions and a final decision is probably expected by tomorrow," Mr Patel said.

The e-GoM had been set up to have one final round of price negotiations with the aircraft and engine manufacturer to try and further reduce the price that IA will have to pay for the aircraft. The cost of the acquisition is estimated at Rs 10,089 crore.

The e-GoM is headed by the Finance Minister, Mr P. Chidambaram, and includes the Minister for Law, Mr H.R. Bhardwaj; the Minister for Programme Implementation, Mr Oscar Fernandes, and Mr Patel.

Apart from the Senior Vice-President, Dr Kiran Rao, the Airbus delegation included senior officials from the finance, contract, and customer services departments.

Late last month, the Cabinet Committee on Economic Affairs decided to refer to an e-GoM to decide on the final price for aircraft acquisition. The move to set up another committee to consider the acquisition price was mooted after some Parliamentarians raised questions as to whether the European aircraft manufacturer had quoted a lower price for a similar deal to an airline in South-East Asia.

The IA board approved a proposal to acquire the aircraft in March 2002 while the proposal was given the nod by the Public Investment Board in November last year.

The airline plans to acquire the Airbus A-320 family of aircraft including the Airbus A-321, A-320 and A-319.

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