CAG pulls up Air India

New Delhi: The comptroller and auditor general (CAG) of India has criticised Air India for wasteful expenditure on accommodation for cabin crew. The company has been found wasting crores of rupees by hiring unreasonably expensive accommodation for its crew in hotels at Frankfurt and New York.
It has also been found that Air India did not finalise the tender for crew accommodation despite securing rates lower than what was being paid through existing contracts. The excess spending of the public sector carrier on this account is estimated at over Rs 12 crore.
“Air India has incurred avoidable expenditure by not accepting the offer for a long-term agreement of the hotel providing accommodation to cabin crew,” CAG said in its recent report. Air India had a contract with Intercontinental Hotel, Frankfurt, for accommodation at e99 a room per day.
As the contract was about to expire in December 2004, the company invited fresh bids to which 11 companies responded. The lowest bidder offered a price of e74. Air India, however, did not award the contract to the lowest bidder and renewed the contract of Intercontinental Hotel at a substantially higher rate.
30/04/08 Economic Times

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Categories: NACIL Apr 2008