Air India Indian Airlines merger, purchase of 111 aircraft collective decision of UPA government: Praful Patel

Former civil aviation minister Praful Patel today termed as “multi-tiered and collective” the decisions to merge Air India and Indian Airlines, and the order to purchase 111 aircraft by the state-run carriers, a day after the CBI decided to launch investigation into these.

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Former civil aviation minister Praful Patel today termed as “multi-tiered and collective” the decisions to merge Air India and Indian Airlines, and the order to purchase 111 aircraft by the state-run carriers, a day after the CBI decided to launch investigation into these.

The CBI had yesterday registered three FIRs to probe alleged irregularities in purchase and lease of aircraft by the two airliners, and surrender of profitable routes by them to favour domestic and foreign carriers. Besides, it had also registered a preliminary enquiry (PE) to probe the controversial merger. Patel said the CBI had registered the PE to go into these issues in 2013 when the UPA was in power.

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Asserting that “all decisions were multi-tiered and collective,” he said “the aircraft purchase order was cleared by an Empowered Group of Ministers (EGoM) headed by P Chidambaram and the merger was cleared by an EGoM headed by Pranab Mukherjee.” “Both the decisions were ratified by the Cabinet,” the NCP leader said.

The investigative agency had yesterday registered three FIRs and a preliminary enquiry (PE) to go into the controversial decisions made by the erstwhile Manmohan Singh government with regard to the two state-run carriers, including surrender of profitable routes to favour private airlines.

The cases were registered against unidentified officials of Air India, Ministry of Civil Aviation and others under charges of criminal conspiracy, cheating and corruption. Patel refused to elaborate any further, saying “I do not wish to comment on the CBI action as it does not name any individual.”

The CBI’s action followed the Supreme Court’s January 5 direction on a petition filed by the Centre for Public Interest Litigation led by lawyer Prashant Bhushan. The process for the merger was initiated by Patel on March 16, 2006 when he had sought a concept paper on the merger. A presentation was made before the Prime Minister on March 22 that year.

An Empowered Group of Ministers (GoM) had later examined the proposal. The merger proposal had received the Manmohan Singh Cabinet’s approval on March 1, 2007. Indian Airlines officially merged with Air India in April 2007.

The CAG had in 2011 questioned the rationale behind the government’s decision to order 111 airplanes for AI and Indian Airlines–48 from Airbus and 68 from Boeing– for about Rs 70,000 crore in 2006.

The government auditor had called the merger of the two national carriers “ill-timed” and said, “the financial case for the merger was not adequately validated prior to the merger.”

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