The Comptroller and Auditor General (CAG) has warned that unless the Government lays down a roadmap for liquidating huge debt, remove infirmities including bilaterals and gives more than a level-playing field to Air India, the airline does not have a future as a vibrant public sector entity.
According to the Performance Audit Report of Civil Aviation in India, tabled in the Lok Sabha today, the government auditor felt that that piecemeal infusion of small amount is merely going to delay the certain closure of the airline.
The Government has so far approved Rs 2,000 crore as equity investment in 2009-10 and 2010-11 while Rs 500 crore has been released as equity investment during the current financial year.
The CAG is very critical of the financing and timing of the acquisition of aircraft. “The entire operations (for both Air India and erstwhile Indian Airlines) were to be funded through debt (to be repaid through the revenue generation), except for a relatively small equity infusion. This was a recipe for disaster ab initio and should have raised alarms signals in the Ministry of Civil Aviation, PIB and the Planning Commission,’’ the report said.
The report also said that the potential benefit of the merger would have been far higher had this been undertaken before the finalisation of the massive and separate fleet acquisition exercise undertaken by Air India and Indian Airlines.
Business Standard, New Delhi, Sept 8:
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