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Govt asks IA chief to probe 'excess' inventory

Civil Aviation Minister Ananth Kumar has asked the chairman and managing director of Indian Airlines to inquire into 'excess' purchase of inventory for the national carrier.

He said Anil Baijal himself had been entrusted to carry out the inquiry. The quantum of excess inventory would only be known after the chairman and managing director submits his report, the minister added.

Airline sources said the national carrier has a Rs 4 billion worth inventory portfolio, a lot of it is surplus spares for which there is little use.

Ananth Kumar said the national carriers were now 'insulated' since they were wholly owned public sector enterprise of the government. ''This has to be removed to bring a regular accountability audit.''

''It's not the job of the civil aviation ministry to run airlines. That's why we are going in for disinvestment. They will have to become more accountable and responsive to the dynamic market forces,'' Kumar said.

He said the full boards of the two national carriers would be established soon with members included from the information technology background, Indian Air Force, corporate sector and hospitality industry.

Regarding disinvestment of Air-India, he said the whole matter will be taken up by the Cabinet, particularly the aspect regarding a strategic partner. The Disinvestment Commission had recommended 40 per cent to the government, ten per cent to employees of Air-India, ten per cent to foreign institutional investors and 40 per cent to the strategic partner.

Kumar said though in the domestic sector foreign airlines were not being allowed as strategic partners, the scenario could be different since Air-India was international.

Kumar said Indian Airlines and Air-India had been asked to synergise by January 31. Of the nine sub-committees which have been set up for this, seven had already sent in their reports.

Regarding fares and route rationalisation, the committees have said they require some more time due to logistic problems, the minister added.

''Ultimately, I feel it is not restructuring of the boards but restructuring of the civil aviation sector and in turn creating a globally competent transport system for integrating and competing in global economy,'' Kumar said in reply to a question regarding the wisdom of having two boards.

He said there were five areas that had to be covered to make Indian aviation relevant to the global demands. These were privatisation, rationalisation, democratisation, modernisation and integration.

Rationalisation was with regard to aviation turbine fuel, inland air travel tax, sales tax and creating a national civil aviation development fund.

He said several states had agreed to remove sales tax. On the administrative price mechanism for ATF (which was Rs 8,500 per litre for international airlines and Rs 15,000 for domestic carriers), the finance ministry had agreed to dismantle it by 20 per cent.

''Now the matter is with the petroleum and natural gas ministry and we are hopeful of a favourable decision,'' the minister said.

Regarding bilateral air agreements, Kumar said the ministry was proactively looking into it. Air-India and Indian Airlines were not even using 60 per cent of the landing rights abroad whereas the competition was using over 65 per cent of the entitlement.

Shortage of aircraft was the major factor for the non-utilisation of their entitlement, he said.

On the domestic sector, Kumar said only sustainable competition would be allowed. The seriousness of an operator could be judged by the benchmark of his financial and commercial operations.

''We will look into these aspects before giving a no-objection certificate in future for both new operations and additional acquisitions,'' the minister added.

Kumar gave all the credit to Prime Minister Atal Bihari Vajpayee for giving full priority to infrastructure development in the country. No other government in the last 50 years had created an infrastructure task force to look into north-south, east-west mega national highway, building of five world-class international airports and coming out with an integrated transport policy, he said in an interview with UNI.

UNI

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