The report on Air India, of the Comptroller and Auditor General (CAT) has slammed the Airline's management for a lack of foresight and stated that the decision to buy a new aircraft caused a loss of Rs.200 crore. As per the report, the expansion plans for the national carrier were not based on due diligence, and the new aircraft should have been bought in two phases. The CAG's contention that the defective contracts led to losses were rejected by Air India and said that the intention of the new aircraft was to meet the increased demands. Also, all the decisions to buy aircraft were cleared by a Empowered Group of Ministers (EGOM), as per stated by the Government. The decision to buy 50 aircrafts from Boeing was defended by the Government stating that the same led to a huge bulk of discounts. In its report CAG has observed that in this case the 35 aircraft would have sufficed. The period from 2005-2010, when Praful Patel was the Civil Aviation Minister, has been looked into by CAG.Mr. Patel's name has not been however mentioned in the report. The report of Comptroller and Auditor General came a day after the Cabinet Committee on Economic Affairs approved a fresh equity infusion of Rs.1200 crore in the cash-strapped airline. Almost 40,000 employees of Air India have not received their salary for the month of June and July and also the Performance linked Incentives (PLI) from Aril to July. At present, the Airline is laden with a cumulative debt of Rs.40,000 crore it incurred over the aircraft acquisition and as short-term loans to maintain its operations and posted losses around Rs.7000 crore for the last fiscal.
News Report By SM
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