Aviation ministry counters CAG’s charges

New Delhi: A day after the government watchdog’s report slamming aircraft acquisition, the civil aviation ministry defended the Rs 41,000 crore aircraft deal for Air India, its bilateral policy and blamed the Comptroller and Auditor General (CAG) for lack of understanding of the complexities of the aviation sector.
“The decision to acquire aircraft for both Air India, Indian Airlines and Air India Express was based on an urgent need to replace the ageing fleet(almost 20 years) and building capacity for future growth in view of fierce competition both domestic and international carriers,” top ministry sources told The Indian Express. They called the CAG report contradictory as on one hand it said the process took unduly long time from 1996 onwards and on the other it said the process was speedily concluded. “All due processes for acquisition were followed by AI and government,”said the source.
The government, fully aware of the negative net worth of both the airlines, had agreed to provide sovereign guarantees at the time of acquisition, the source said. The ministry debunked charges that a large number of aircraft have been acquired by the carrier.
10/09/11 Indian Express

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Categories: Air India Sep 2011