In­dia police to probe US$10.8b 111-plane or­der from 2005

New Straits Times - - Business World -

In­dia’s fed­eral in­ves­ti­ga­tion agency will probe a decade-old deal by the national car­ri­ers to ac­quire 111 air­craft, which sad­dled the flag car­rier Air In­dia Ltd with losses, said the Central Bureau of In­ves­ti­ga­tion (CBI).

The CBI reg­is­tered three cases and one pre­lim­i­nary in­quiry in the light of or­ders from the Supreme Court in Jan­uary, ac­cord­ing to the state­ment dated May 29 on its web­site.

The cases in­clude in­ves­ti­gat­ing al­le­ga­tions re­gard­ing buy­ing planes for 700 bil­lion ru­pees (RM46.22 bil­lion), said the CBI.

The ac­qui­si­tion al­legedly caused a fi­nan­cial loss to the “al­ready stressed” national car­rier, it said.

Praful Pa­tel, who was In­dia’s civil avi­a­tion min­is­ter at the time of the pur­chases, didn’t im­me­di­ately re­spond to phone calls seek­ing com­ment.

In De­cem­ber 2005, In­dia’s cabi­net gave an ap­proval to the national car­rier to buy 68 air­craft from Boe­ing Co.

In 2006, state-owned In­dian Air­lines Ltd inked an agree­ment to buy 43 planes from Air­bus SE. While the air­craft or­ders were made sep­a­rately, the two national car­ri­ers were later merged by 2007 into the National Avi­a­tion Co of In­dia Ltd, which op­er­ated un­der the brand Air In­dia.

The CBI said it’s also in­ves­ti­gat­ing al­le­ga­tions of leas­ing of a large num­ber of air­craft “with­out due con­sid­er­a­tion”.

Also part of the probe would be al­le­ga­tions about giv­ing up profit-mak­ing routes by Air In­dia in favour of national and in­ter­na­tional pri­vate air­lines, which caused a “huge loss” to the national car­rier, it said.

Air In­dia’s air­craft deal was con­tro­ver­sial at the time of the pur­chase it­self.

A day af­ter the Mum­bai-based car­rier chose to buy 23 Boe­ing 777 air­craft and 27 Dream­lin­ers, Nigel Har­wood, Air­bus’s then vice-pres­i­dent of sales for In­dia, said in an in­ter­view the Euro­pean com­pany wasn’t given a “fair chance”.

Air In­dia de­nied that, say­ing it took “strong ex­cep­tion” to the claims.

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