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04-21-2012, 10:04 AM #1
Who grounded Tata's bid to start an airline?
In 1997, then civil aviation minister C.M. Ibrahim acted under pressure from Jet Airways to thwart the Tata group 's bid to start an airline in India in association with Singapore Airlines, a former top bureaucrat has said in a tell-all book.
"The history of civil aviation in this country would have taken a different trajectory, if Tata Singapore Airlines had been allowed to float an airline," wrote MK Kaw, the civilian aviation secretary in the government of prime minister I.K. Gujral.
In his book "An Outsider Everywhere - Revelations by an Insider" (Konark Publishers), Kaw said Ibrahim refused to clear the proposal despite policy papers being put up before him.
"The minister did not clear the file, despite several attempts on my part."
Later, Ratan Tata - whose group started India's first airline, Air India, which was later nationalised - met Kaw and inquired about the chances of the proposal coming through, the bureaucrat wrote.
"I said that it was difficult to guess. He (Tata) said that he had been approached, but it was not the policy for Tatas (to give bribes).
"The Tatas finally got tired of waiting and withdrew their proposal. Recently, Ratan Tata explained that one person had stood between the Tatas and the fulfillment of their aspirations in the civil aviation sector," Kaw said.
"But he (Tata ) did not elaborate."
Kaw said when privatisation of airlines was permitted, Jet Airways had come up with 40 per cent equity contribution by two airlines in the Gulf.
"The Tatas had mooted a proposal for a private airline with 40 per cent equity contribution from Singapore Airlines. As this would have been a formidable competitor, Jet tried hard to upset the rules regarding foreign equity contribution.
"One of the last decisions taken by the outgoing Deve Gowda government had been to disallow such contribution in new proposals. This would block the Tata proposal effectively. Jet was given a time of six months to buy back the equity from its foreign contributors."
He said the Tata group was not allowed to open an airport. "They had wanted to set up an international airport at Bangalore. They had a foreign collaborator with all the expertise connected with setting up of world-class airports. Normally the proposal should have been through.
"I submitted the case to the minister (Ibrahim). He did not okay the proposal."
Kaw, who was later shifted out of civil aviation, said it was a pity that even 15 years later, the country is yet to have a civil aviation policy.
"It is the considered view of many experts in civil aviation that FDI investment will not be allowed in India till this is permitted by the powerful owners of Jet Airways," Kaw wrote.
The official, who retired from the Indian Administrative Service in 2001 and was known for uprightness and outspokenness, said the history of civil aviation in India was "a fascinating saga of benami ownership of airlines, demands for bribes, destruction of rival airlines one by one, unwarranted purchase if aircraft, mismanagement of bureaucrats and politicians, free jaunts on inaugural flights, subsidized travel for many categories of travelers, VVIP flights, Haj flights and so on."
"It is a story of shameless exploitation and ruthless corruption."