In the first meeting of the group of ministers (GoM) to decide on a Rs 5,000-crore bailout plan for National Aviation Company of India Ltd (Nacil) or Air India,home minister P Chidambaram took the civil aviation ministry to task by demanding accountability for the mess the company has landed itself in. Finance minister Pranab Mukherjee,who chairs the GoM,let his predecessor do the tough talk at the GoM meeting. Also in attendance were petroleum minister Murli Deora,civil aviation minister Praful Patel and Planning Commission deputy chairman Montek Singh Ahluwalia. Chidambaram is said to have come down heavily on the performance of past CMDs and demanded accountability,sources present at the meeting said. Nacil,resulting from the merger of Air India and Indian Airlines on March 30,2007,has accumulated losses to the tune of Rs 7,200 crore for the year-ending March 2009. In 2007-08,Nacils losses stood at Rs 2,226 crore. Just before the merger,Indian Airlines posted losses of Rs 240 crore,while Air India recorded a profit of Rs 541 crore in 2006-07. Sources said Chidambaram made three crisp observations in the first meeting of the GoM,which was formed to chalk out a roadmap for Nacil. Besides demanding an explanation on the role of past CMDs,the home minister sought to know the progress on synergies that were promised when the two carriers were merged. The company and the civil aviation ministry had projected savings of Rs 600 crore post the merger based on a report prepared by consulting firm Accenture. Chidambaram also asked if the company had not envisaged such a situation earlier. Nacil management and employee unions have held the merger and the ambitious Rs 50,000-crore aircraft acquisition as responsible for the current woes of the airline. The ministry has,however,held that the management of the two airlines did little to champion the integration and blamed the employees for the merger that has not yielded desired results. While sources said the government may finally rescue Nacil,the turnaround plan proposed by the company evinced lukewarm response. The GoM has asked the management to get back to the drawing table and come with a revised plan in a week. Government support will come,but not without Nacil taking some drastic measures to shore revenues and cut costs, said a source present at the meeting. In fact,the ministry expects the first tranche to be released before December.
