Playing safe, Praful sent Airbus file to CVC

Before clearing today an Indian Airlines proposal to buy 43 Airbus aircraft for nearly $1.9 billion, the Civil Aviation Ministry got the Cen...

Before clearing today an Indian Airlines proposal to buy 43 Airbus aircraft for nearly $1.9 billion, the Civil Aviation Ministry got the Central Vigilance Commissioner to have a look at the file so that awkward questions are not raised later.

Highly placed sources said that the Indian Airlines acquisition file will now go to the Cabinet. Other ministries will be given two weeks time for comments on the purchase. The Ministry decision comes a day after Air India Board okayed the purchase of 50 Boeing aircraft.

In IA’s case, sources said, the Price Negotiation Committee had submitted its report more than three weeks ago. But Civil Aviation Minister Praful Patel decided to send the file to the CVC to get his comments before bringing it to the Cabinet for final approval.

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The CVC, while taking note of the file, is said to have offered no comment for the time being as the entire process is still not over.

The idea to involve the CVC in the pre-Cabinet stage was done to address any incongruency that may land the deal in trouble later.

The practice was first started by the Defence Ministry but at that time the CVC refused to examine deals that were still in the process, opting to make observations only after completion of the process.

Much of the price negotiations in the IA deal revolved around fixing the rate in the escalation clause. It’s learnt that this has been capped at about 4 per cent though Airbus is believed to have initially quoted a slightly higher rate in the initial stages. If cleared in due course, this will be the first purchase by Indian Airlines in more than two decades.

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The delivery schedule is planned to begin from next year and has been spread over a period of about five years. The airline has decided to purchase 20 Airbus A321s, 19 Airbus A319s and four Airbus A320s. The fleet renewal programme will mean that the Boeing 737s of Alliance Air will be replaced by A319s.

However, the airline is still going ahead with the leasing of five A319s in the interim to provide immediate facelift to Alliance Air. The Boeing 737s are planned to be refurbished for a separate cargo service. Besides this, the airline is also looking to lease wide-bodied aircraft for its international operations. These are, however, separate processes that are parallel to the acquisition programme.

Meanwhile, officials said that the Air India proposal will now be examined by the Ministry and then sent to the Cabinet for approval. The Maharaja deal is about three times that of Indian Airlines.

For Kolkata, the IMD has forecast mostly cloudy skies with light to moderate rain or thundershowers on most days through Panchami.

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