Praful Patel, who headed the civil aviation ministry in the UPA-I, on Thursday defended the decision to acquire 111 planes for Air India, saying there was no other way for the state-run airline to compete internationally.
“In 2004, Air India and Indian Airlines had 93 aircraft, most of which were 20-years-old. There was no way the airline could have withstood global competition with these planes," Patel, who is now the heavy industries minister, said. His comments came soon after the Comptroller and Auditor General (CAG) questioned the civil aviation ministry's decision to acquire the planes through debt, calling it “a recipe for disaster”.
An internal note of the aviation ministry said the government-owned airline’s decision went through comprehensive vetting. And, while negotiating the deal, the government had secured about Rs 1,800 crore of discounts/concessions, as well as 30 per cent of the total value as trade offsets from Boeing.
The note says the proposal, to order 35 aircraft and keep an option to buy another 15 was in fact subject to an oversight committee chaired by a former CAG member and central vigilance commissioner (CVC). The ministry had asked the Prime Minister’s Office for an oversight panel since it believed any proposal for large purchases gets controversial and the integrity of the process gets questioned.
The ministry said that it had referred the entire acquisition, along with all evaluation papers, to the then CAG and CVC for their comments in September 2005, but none was given.