Cabinet paves way for delivery of Dreamliners, postpones FCRA

The Union Cabinet today approved a proposal of the civil aviation ministry to take delivery of 27 Dreamliners from Boeing after the company pays an undisclosed compensation amount for delay in delivery.

It also cleared the increase in the minimum support price of arhar and moong for 2012-2013 crop marketing season by Rs 650 and Rs 900 per quintal, respectively. However, it did not discuss the much-awaited amendments to the Forward Contract Regulation Act (FCRA) because of absence of Consumer Affairs Minister K V Thomas.

The amendments to the FCRA have been not discussed despite being on the Cabinet agenda because of strong opposition from United Progressive Alliance ally the Trinamool Congress.

According to a statement issued by the government after the Cabinet meeting, “For delivery of Boeing, the issue relating to compensation for failure to meet performance guarantees has been delinked from the delay compensation settlement agreement, which shall be negotiated separately by an Empowered Group of Officers after actual evaluation of the performance of the delivered or inducted B-787 aircraft.”

Though no one has confirmed the compensation amount at present, it is expected that the amount will be around $500 million.

Air India is planning to induct twenty-seven Boeing 787 aircraft in its fleet as part of the contracted deliveries of the aircraft. These planes were scheduled to be delivered during September 2008 to October 2011.

However, due to certain design and production issues, these aircraft have been delayed and are now scheduled to be delivered between June 2012 and March 2016.

The Cabinet also approved central government funding of up to 90 per cent for national irrigation and drinking water projects.