CAG flays NACIL for under-utilisation of engine facility

The government auditor CAG has rapped National Aviation Company, which operates the flag carrier Air India, for under-utilising one of its facilities.

The Comptroller and Auditor General (CAG) expressed disappointment over the fact that a Jet Engine Overhaul Complex (JEOC) in Delhi, set up by erstwhile Indian Airlines in 1991, could utilise its capacity between 67 and 83 per cent only during 2004-05 to 2008-09.

In a report tabled in Parliament, it noted that "due to lower production of engines, aircraft ranging from one to 11 were on ground for 1,370 days during the above period" and said "the company lost potential revenue of approximately Rs 291 crore."
    
The JEOC facility was certified by the US Federal Aviation Authority and has the capacity to overhaul 48 V2500 engines per annum. These engines power aircraft of Airbus' A320s, A321s, A319s and the Airbus Corporate Jet.
     
The apex auditor also said JEOC under the control of the then Indian Airlines, was unable to produce engines as per requirement between September 2005 to December 2006. This forced the company to take engines on lease at a cost of Rs 34.68 crore in that period.
     
The report further said the airline sent "23 engines and 18 HPC modules from JEOC to outside agencies for repair" despite having in-house capability and "incurred an expenditure of Rs 498.66 crore." This included an avoidable expenditure of Rs 45.95 crore towards labour, transportation, mark-up on materials and testing charges, the report said.