No irregularities in Air India's mega aircraft order: Raju

New Delhi: The government on Monday denied any irregularities in the mega aircraft purchase order by Air India. The airline had ordered 111 aircraft in 2005-06 and this order has been in the eye of a storm ever since, with several allegations of wrong doings from rivals of the then UPA government. In fact, this single order has been blamed for the subsequent decline of the national airline into deep losses. The Modi government denied any irregularity in Lok Sabha on Monday even though the Comptroller & Auditor General (CAG) released a scathing report on this purchase in 2011-12, alleging several irregularities. The order also continues to be under an investigation by the CBI. [caption id=“attachment_2156809” align=“alignleft” width=“380”]  Reuters[/caption] This CAG report is still being examined by a parliamentary committee so one fails to see the diffidence of the Modi government in denying any wrong doing in the aircraft order. Civil Aviation Minister A Gajapathi Raju said “no” to a question by RK Singh when asked if there were any irregularities in the purchase of aircraft by Air India which had come to the notice of the government. He also said no probe has been ordered by the government on this issue. This aircraft order was placed almost a decade back when Praful Patel was the Minister for Civil Aviation. Raju said the order was placed with the approval of the Cabinet Committee on Economic Affairs and the matter is still under the consideration of the PAC. In its 2011-12 report, the CAG had raised questions such as undue time taken for aircraft acquisition, change in aircraft to be purchased, flawed assumptions, underlying revised project report and post-bid seat configuration, Raju informed the lower house. To another question on whether this order lead to heavy losses at Air India, Raju replied saying loans for purchase of the aircraft were raised after guarantees by US Exim Bank and Counter Guaranteed by the Indian government. “Since these loans were backed by guarantees they were raised at the most competitive rates of approximately of 2.5 percent to 3 percent for a period of 12 years. As in any Capital Intensive industry, due to induction of new fleet AI had to incur high financing cost during the fleet induction resulting in strain on its cash flow/profitability,” the minister said. Is the Modi government trying to sweep a possible scam under the carpet? Or are the minister’s replies merely stating facts, as on date, while trying not to suggest the way forward to the PAC? Raju said about the status of the probe into this aircraft purchase order: “CAG Report No.18 of 2011-12 regarding Performance of Audit of Civil Aviation in India was laid in the Parliament on 8.9.2011. The issue of acquisition of aircraft by erstwhile Air India forms part of the report. C&AG report raised issues like undue time taken for acquisition, change in aircraft to be purchased, flawed assumptions, underlying revised project report and post-bid seat configuration. Subsequently, the Public Accounts Committee (PAC) has taken up the report of C&AG for further examination. PAC had sought an action taken report on their observations made in the 93rd Report (15th Lok Sabha) on Performance of Civil Aviation in India. Action taken report on the observations has been forwarded to Lok Sabha Secretariat(PAC) on 8.1.2015. the matter is still under consideration of the PAC.” In the same reply, Raju also said that with the induction of B787 aircraft (the Dreamliners) which are more fuel efficient and more suitable for long routes, it was decided to withdraw the B777-200 aircraft and sell these. Options like leasing, re-configuration of the aircraft and deployment of the same on short haul routes were found unviable. “Accordingly, 5 out of 8 B777- 200 have been sold,” the minister informed Parliament. This sale is also under CAG scanner.