Petro min favours fund infusion with a rider

New Delhi: The petroleum ministry has favoured a proposal seeking Rs 1,200 crore fund infusion in state-owned Air India with the rider that the airline should clear the dues of public sector oil marketing companies. The development comes at a time when finance and home ministries have expressed their unwillingness to offer further financial support to the carrier in absence of its ability to cut cost and increase revenue as directed by a ministerial panel headed by Pranab Mukherjee.
“The petroleum ministry has positively commented on the note which seeks Rs 1,200 crore for the airline but with the condition that the dues of oil companies be paid off with the fresh government fund,” an official in the civil aviation ministry said.
An Air India official said that the airline owed about Rs 1,800 crore to oil companies.
The civil aviation ministry had last month circulated a Cabinet note to various ministries asking for their comments on Rs 1,200 crore equity infusion to Air India. The Cabinet Committee on Economic Affairs (CCEA) is expected to take up the proposal by the end of this month.
18/11/10 Nirbhay Kumar/Financial Express

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Categories: Air India Nov 2010