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Journalism of Courage
After more than two years in the process, the Indian Airlines (IA) fleet acquistion programme to purchase 43 aircraft will be tabled before the Public Investment Board (PIB) on Wednesday. Further, the Civil Aviation Ministry has asked the government to provide the sovereign guarantee for the Rs 10,089-crore deal.
With a limited equity base of Rs 105 crore, the airline will need a sovereign guarantee to borrow from the market. The proposal for equity infusion to tune of Rs 325 crore, however, will be processed simultaneously.
Sources said Prime minister Manmohan Singh and Finance Minister P. Chidambaram were agreeable to extend the sovereign guarantee to IA. However, a final decision on the matter is still to be taken. PIB is likely to give its clearance on tender rates (Rs 10,089 crore), which will serve as an upper limit for further negotiations with Airbus to bring down the rate. For this purpose, PIB will form a committee along with senior ministry officials to oversee the negotiations with Airbus.
The ministry has already got the consent of the Central Vigilance Commission to hold negotiations with the lowest bidder. This will be done to obtain the best rates available in the market today because more than two years have passed since the plan was approved.
Meanwhile, Air India’s acquisition programme is also likely to be finalised by this month-end. The Maharaja had decided to re-examine its earlier proposal to purchase 28 aircraft after the new government came to power.
