Wednesday, May 31, 2017

CBI Air India probe: UPA cannot escape allegations of failure at several levels in pushing merger

New Delhi: The Central Bureau of Investigation (CBI) has registered three separate FIRs besides also launching a preliminary enquiry to probe alleged irregularities in Indian Airlines-Air India merger and purchase of 111 aircraft, leasing of planes and giving-up of profit-making routes by Air India. These decisions, according to the CBI, caused a loss of thousands of crores to the exchequer.

While the CBI is obviously acting at the behest of the Centre and some may term this probe as a witch hunt against UPA’s Civil Aviation Minister Praful Patel, it is a fact that the decision to merge erstwhile Air India and Indian Airlines was taken for all the wrong reasons by the UPA worthies.

In fact, the entire decision making process which lead to this ill fated merger shows there was a failure at several layers of the government of the day. Make no mistake: Patel was not the sole promoter of this idea. As per a report of the Comptroller & Auditor General (CAG) of 2011, the merger process was examined in all aspects at various levels - by the Consultant (Accenture), the Ministry of Civil Aviation, the Minister of Civil Aviation, a Committee of Secretaries, a Group of Ministers (GoM) and the Cabinet. This was, thus, a collective decision, arrived at after multiple levels of due diligence. Hence, it wouldn’t be wrong to call it a collective failure of the government of the day.
But why is everyone trying to find faults with a decision which was implemented a decade back, now? For one, the merged entity – the Air India of today – has never ever reported a net profit in its decade long existence while the separate airlines were profitable.
This piece in Economic Times examines why the merger of the two airlines created a loss making one. Between 2001 and 2006-07, the standalone Air India declared a profit each year!
30/05/17 Sindhu Bhattacharya/First Post