MoF to arrive at final package for IA restructuring soon

NEW DELHI, Dec 23: The ministries of civil aviation and finance have agreed to sort out the differences over the P P S Brar report on the K...

NEW DELHI, Dec 23: The ministries of civil aviation and finance have agreed to sort out the differences over the P P S Brar report on the Kelkar committee recommendations for restructuring the Indian Airlines.

The report prepared by the Controller General of Accounts, P P S Brar, had attracted a strong response from Indian Airlines, which declared the report `inaccurate’ and based on an `inadequate appreciation of realities’, in a response to the civil aviation ministry. Aviation ministry sources said the finance ministry had taken note of IA’s objections to the P P S Brar report, scaling down the financial package for the airline.

The finance ministry has expressed its willingness to discuss the assumptions of the Brar, modify them where necessary and then arrive at a final package for reviving the airline’s fortunes.

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Against the Kelkar committee recommendations for a Rs 922-crore revival package for the airline, Brar had suggested only a Rs 350-crore package.The civil aviation secretary, M K Kaw, has already held a round of talks with the expenditure secretary, C Ramachandran on the issue. “The Brar note is just an internal note for the finance ministry and was never meant to be an alternative to the Kelkar report,” he said.

Aviation ministry officials said the two sides had not reached agreement on all the objections raised by IA, but a majority of issues including the dilution of the financial package, had been sorted out. The package suggested by Brar will increase after the finance ministry modifies his assumptions on IA’s management and utilisation of resources.

The Brar note had attacked IA on a number of points, including its poor margins, high staff costs and uncompetitiveness. The note said the issue of differential ATF pricing was not a critical issue because private airlines had been able to make profits at the same rates.