Three-member board for AI fleet acquisition

The government has cleared the appointment of a three-member oversight board for the Rs 30,000 crore Air India fleet acquisition programme.

The board will be headed by former Comptroller & Auditor General CG Somaiah. It will also have Expenditure Secretary Adarsh Kishore and Civil Aviation Secretary Ajai Prasad as its members. The proposal was cleared by Prime Minister Manmohan Singh today, government officials said.

The acquisition plan is scheduled to be taken up for a pre-public investment board discussion next week.

The airline is planning to acquire 68 Boeing aircraft of various configurations. Eighteen of them will be for its budget carrier subsidiary Air India Express. Somaiah had earlier headed a similar committee for Indian Airlines' 43 aircraft acquisition plan from Airbus Industries.

The civil aviation ministry has also circulated the Cabinet note for the Rs 9,000 crore Indian Airlines fleet acquisition which will be taken up by the Cabinet shortly.

Officials said the ministry had asked for the constitution of a group of ministers to undertake the final round of negotiations with Airbus.

The move follows the finance ministry's reluctance to agree with the civil aviation ministry's proposal for a sovereign guarantee for Indian Airlines acquisition, though it had been cleared by the Public Investment Board. North Block had asked the civil aviation ministry to certify that the cost of the aircraft was the best offer received by any airline.

The Air India fleet acquisition had come under cloud following allegations of wrong doing by Airbus, after it lost the bid.