Tata Airline Proposal Not On Fipb Agenda

The controversial Tata airline proposal has been dropped from the agenda for the Foreign Investment Promotion Board's meeting, scheduled for Saturday.

The proposal was listed for discussion at an earlier meeting slated to be held last Monday but was deferred because of a lack of quorum .

According to the industry ministry, the reason for dropping the proposal from the agenda was the new finance secretary Vijay Kelkar is joining office on Friday and will need more time to examine the Tata proposal.

But senior functionaries close to one of the ministers involved with the project pointed out that the main reason for dropping the proposal was to avoid getting entangled in a controversial decision as the project has been opposed by as many as 40 members of parliament .

 

The functionary said: "The government requires more time considering the sensitivity of the Tata project, especially as there has been opposition from various members of parliament on this."

In a related development, officials indicated that the industry ministry is yet to receive any feedback on the Tata proposal from the civil aviation ministry, the administrative ministry, which had asked for a deferment on the proposal on two previous occasions after BJP-led coalition government came to the centre.

The Tatas first submitted the application for the domestic airlines in technical collaboration with Singapore Airlines in December 1997. This is the second time the Tatas have put forward an application to the FIPB.

Earlier in February 15, 1995 it had approached FIPB to start an airline in India with an equity participation by Singapore Airline.

After a few modifications, the project received FIPB clearance in December 1996 only to be rejected by the Civil Aviation Ministry and subsequently the cabinet. The Civil Aviation Ministry has since then changed and chopped its own aviation policy several times over to stall the airline project.

The Tatas now have dropped Singapore Airlines from the joint venture to conform to the new policy but the civil aviation ministry has continued to stall the project.

In June, civil aviation minister K. Ananthakumar had told Business Standard that his ministry cannot clear the project unless the FIPB gave a green signal to the Tata venture. Senior industry ministry officials, however, were nonplussed at the civil aviation ministry's stand on the Tata project saying that it was the civil avaition ministry which had been asking for deferment of a decision on the proposal.