How AI chief gave himself a fat raise

According to the audit, when discrepancies in the scheme were pointed out in September 1995, the management assured the AI Board that the “short-fall allowance” scheme — another allowance, giving senior pilots money if they flew less hours! — would be stopped. This, however, didn’t happen, and was distorted even further.

The CAG report also shows that Air India deliberately lowered the base-line performance to below the average of the previous years, to ensure that a inflated PLI payout could be made.

Kumar denies all charges: “There were strikes once a week, soPLI was introduced as part of the wage settlement.” Kumar also denied that performance bench-marks were lowered for PLI, but refused to comment on the specific instances. Kumar claimed that he took PLI since it was his due and “now let the government take a view on it…in any case, AI still owns me money.

The CAG findings are revealed in a special audit conducted — for the period 1994-98 — by Niranjan Pant, Principal Director of Commercial Audit & ex-officio member, Audit Board. The report, sent to the Ministry of Civil Aviation last month, makes some startling revelations about how officials of the IAS and IPS flouted guidelines and increased their pay packets by nearly 206 per cent in comparison to what their colleagues were drawing in Government.

The PLI scam worked like this. After it was introduced, the management lowered performance baselines in order to inflate the PLI handout. The average on-time performance prior to the scheme, for instance, was 66 percent — the base-level for PLI, however,was taken as 56 per cent. For aircraft availability the baseline was 66 percent, though the earlier average performance was 73 per cent. Air India’s total payout on this account was around Rs 286 crore.

The audit report says: “The PLI was also finalised under another deputationist CEO, Brijesh Kumar, who benefited personally from it in a big way soon after he took full charge as the Mananging Director.” “The other notable beneficiary of PLI was another deputationist officer N C Padhi who held the charge of Deputy MD (Vigilance) and Chief of Internal Audit during the period”. Padhi is currently posted as Additional Director in the Intelligence Bureau while Kumar is Chairman, Noida authority.

The audit has mentioned four officials including former MD Brijesh Kumar who during 1997/98 had an excess ranging from 59 percent to 247 percent on what he would have earned in the government. The increase as per audit for Dy-MD Padhi ranged between 43 percent to 252 percent. The other two officials mentioned inthe audit are D C Amist and Pankaj Tyagi.

The report concludes: “It is little wonder that the remuneration management has slipped out of hand…remuneration outgoes have snowballed progressively after 1994/95 dragging the company’s bottomline to even lower depths.”

And, what coincided with this largesse was the lowest employee productivity in the industry, aircraft utilization was poor and the airline was making unprecedented losses according to the audit. AI even paid out Rs 89 crore in Productivity Allowances to a section of employees instituted solely at the behest of their unions on a fixed monthly basis without any linkage to performance improvement.

The AI management claimed that all decisions were approved by the board and were in the knowledge of the Ministry. But the report says: “AI board must be one of the few boards of its kind where the MD is the only functional and full time director. It is clear that the board did not have competent management support to take theirdecisions.”