Air India sends SOS for de-freezing accounts

Troubled national carrier Air India has sought immediate governmental intervention to release its bank accounts frozen by the service tax department on account of non-payment of dues totalling Rs 170 crore.

The airline,in a letter to the civil aviation secretary Nasim Zaidi has proposed that it will pay Rs 5 crore to the department immediately,while the rest of the amount would be paid later. After its accounts were frozen,officials of Air India and the Central Board of Excise and Customs held talks. In the letter,the airline made a fervent plea for releasing Rs 250 crore from the Contingency Fund of India,to tide over its interest obligations,fearing some of its bank loans may be declared as non-performing assets. Battling an acute cash crunch,Air India has over Rs 2,500 crore as dues to various vendors including state-owned undertakings such as Airports Authority of India and oil marketing companies. The carrier was faced with a similar situation last month when its accounts were frozen but later lifted on a guarantee that the airline would pay the dues before the end of the year 2011. The airline management had said it would be able to clear these dues only when government released payment for VVIP flights.