'PM should help ensure transparent AI disinvestment'

By T.S. Shankar

CHENNAI, JULY 18. With the Prime Minister, Mr. A.B. Vajpayee, convening a high-level meeting in New Delhi on Thursday, to discuss the ``contentious issues'' relating to Tata Singapore Airlines, as the single bidder for claiming the Government's shareholding in Air India (AI), several MPs have sought the intervention of the PM ``not to allow any clandestine deal'' to take place in the disinvestment process.

Cutting across party lines, several MPs have shot off hard- hitting letters to the Prime Minister seeking his immediate mediation as they are apprehensive that ``norms of transparency are being ignored''.

They want the Parliament's Standing Committee on Finance be given adequate time to study the entire issue and send its observations. Only after obtaining the reactions of the Parliamentarians, the Government should be allowed to finally decide on this vital issue.

In a 7-page letter to the Prime Minister, the Congress MP and Chief Whip, Mr. Priyaranjan Das Munshi, who is also part of the Standing Committee on Finance, has raised some serious questions on the single-bidder issue. The letter fears that the long- winding disinvestment exercise could be heading for a ``clandestine deal''.

The letter, a copy of which was made available to The Hindu states: ``I am afraid that the property has been grossly under- valued with a definite design to surrender our sovereign national interest. I understand the net price is settled at 20 per cent of the actual value of the property''.

Stating that he had the ``highest admiration for the TATA group for its outstanding contribution to Indian economy and professional corporate attitude'', Mr. Dasmunshi has strongly objected to the ``involvement of Mr. Nimesh Kampani, Chairman of JM Morgan Stanley Limited for a brief period in TATA managed India Hotels''.

``Since the inter-evaluation of property is neither known to the Standing Committee nor the Parliament, would it be proper to dispose it at this stage. Why not the CAG examine first the valuation and then Cabinet examine it?,'' he further asked.

Firing yet another salvo, the CPI General Secretary, Mr. A.B. Bardhan, in a letter to the PM, has asked the ``Disinvestment Ministry to refrain from taking any final decisions before a detailed examination takes place of these issues in Parliament and its concerned Standing Committees''.

Among other vital issues raised by Mr. Bardhan are the implications of the lack of objectivity, the appropriateness of handing over the management to a consortium dominated by a largely Government-owned foreign airline and the measures needed to protect the interest of the AI employees.

Taking into account the aircraft, maintenance and training facilities and immovable properties and the opportunities available to operate additional frequencies and routes besides its long-term commercial and profit potential, the AI should be worth at least Rs. 9,000 crores - Rs. 10,000 crores, Mr. Bardhan felt.

Meanwhile, the Union Disinvestment Minister, Mr. Arun Shourie, has dispelled the fears raised by Mr. Bardhan. In a reply to the CPI leader, Mr. Shourie said the Government would uphold the national interest in every aspect.

Pointing out that the debt equity ratio of AI was 8:1, compared to the 2:1 ratio of the median Asian Airlines, and its aircraft utilisation rate was 7.4 to 8 hours a day, a rate at least 30 per cent less than that of its competitors, Mr. Shourie said AI had large debts - Rs. 3,250 crores and the interest payment per annum for loans taken for working capital was more than Rs. 100 crores.

He claimed that the Government was keen on a competitive air transportation environment to benefit the users by way of lower fares and quality services.

Hence, there was a need to clearly distinguish between the Government's regulatory role and AI's commercial interests. Safeguarding the interests of the people was more important to the Government than running a high profile company such as AI, the Minister argued.

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