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The Rediff Business Interview/ Chand Mahal Ibrahim

'I refused to approve the Tata proposal because I felt they had a hidden agenda'

The Tatas' decision to withdraw its controversial domestic airline proposal may have saddened many pro-reform politicians in the country. But it has gladdened former aviation minister Chand Mahal Ibrahim, who is credited with having first whipped up opposition against the Tata-Singapore Airlines project and then having effectively stalled it during the United Front government's tenure.

Ibrahim, in fact, sounded the death-knell of the Tata Airlines venture more than two years back. Every time the Foreign Investment Promotion Board met to clear the Tata project, Ibrahim, as civil aviation minister in the Cabinet of prime ministers H D Deve Gowda and Inder Kumar Gujral, would hold it back for one reason or the other.

Early in 1997, the FIPB sent the proposal to the Cabinet Committee on Foreign Investment for the final seal of approval.

Knowing that the project would get cleared through the CCFL, Ibrahim publicly declared, "Only over my dead body will this proposal be cleared."

Ibrahim's threat numbed the Deve Gowda Cabinet into submission and the Tata project was immediately shelved.

Ibrahim's opponents allege that he went into such overdrive because he was "aided and abetted" by companies that did not want the Tatas to enter the domestic airline business. His singular agenda of denying the Tatas a place in the country's aviation industry succeeded, despite then finance minister Palaniappan Chidambaram and then industry minister Murasoli Maran staunchly backing the project.

Now that the Tatas have finally given up the proposal, Ibrahim is all praise for himself. "I single-handedly fought a powerful business and political lobby who wanted to ruin the domestic Indian Airlines," he told Chief Correspondent George Iype in a telephone interview from Bangalore.

As aviation minister, you allegedly stalled the Tata airline project. Now the Tatas have withdrawn the proposal, blaming it on government delay. Isn't the blame partially on you too?

It is incorrect to say that I stalled the Tata project and therefore it is not proper to put the blame on me. As a responsible civil aviation minister, I objected to the Tata project because I wanted to protect the interests of several thousand workers of Indian Airlines. The United Front government and I were very clear about one thing: that only domestic companies would be allowed to start an airline operation in India. I refused to approve the Tata proposal because I felt they had a hidden agenda.

What was the Tatas' hidden agenda?

I feel one of the single most important hidden motives of the Tata-Singapore Airlines project was to kill the domestic Indian Airlines. Singapore Airlines has huge resources, financial clout and aggressive marketing skills. But Indian Airlines, which has limited resources and which is forced to operate on many uneconomical routes across the country, would not be able to offer effective competition at this juncture. That is why we worked out a comprehensive aviation policy.

Which means you did not want to throw open the country's domestic airlines to competition.

I did not want to pit Indian Airlines against competition from foreign airline companies. There are many private Indian companies operating in the Indian skies successfully. The Tatas were similarly free to start their own airline instead of going in for a suspicious tie-up with Singapore Airlines. I would have immediately allowed the Tatas' entry into the aviation industry, if it had not come up with its equity participation with Singapore Airlines.

But the Tatas later gave up plans for an equity participation with Singapore Airlines and only proposed a technical tie-up with the foreign partner?

The Tatas' technical participation with Singapore Airlines is more suspicious. The Tatas, in their several proposals before the government, have not answered some key questions. Their proposals are silent on the nature of the technical agreement they wanted to have with Singapore Airlines. There also I feel the Tatas pursued a hidden agenda. Therefore, the Tatas killed their own project because it was not suited to domestic aviation policies.

Is it a victory for the Bharatiya Janata Party government's swadeshi agenda?

How can you call it a victory for the BJP's swadeshi policy? The BJP just emulated my swadeshi policy for the aviation industry.

But doesn't the affair send wrong signals to foreign investors?

Those who are taking this line are talking rubbish. The Government of India is very clear that it will not allow any foreign players in the domestic airline industry. Now if the Tata lobby has failed to change the Government of India rules, then it is their failure and the Indian people's victory.

Tell me, can you name any country where foreign airlines operate on domestic routes. Just because we are in a reforms era does not mean that the people in India are abandoning their old clothes and wearing only new ones. Just because the Tatas have withdrawn their project does not mean that people in India will not board Indian Airlines and other private planes in the country.

The Rediff Business Interviews