Civil Aviation Minister Chand Mahal Ibrahim, who is
also the information and broadcasting minister, effectively
scuttled the Tata-SIA proposal while the fate of STAR TV's DTH
service still hangs in the balance.
They were the two most controversial decisions taken by
the Deve Gowda government. One of them has become policy while
the fate of the other still hangs in balance. Yet, irrespective
of what happens to the Deve Gowda government, C M Ibrahim may
well rest a happy man.
In what was his last week as minister for civil aviation
and information and broadcasting in the deve Gowda regime,
Ibrahim swung two key decisions.
One: He got the Cabinet to pass the aviation policy drafted by
his ministry which effectively scuttled the Tata-Singapore Airlines
proposal. And two: he banned Sky TV's direct-to-home (DTH) television
At a hurriedly-called press conference, Ibrahim acted as though
both decisions had been prompted by patriotic considerations.
But of course, there were those who suggested that he had been
motivated by a desire to protect the two major Indian players
in both sectors: Naresh Goyal's Jet Airways and Zee TV's beleaguered
chief Subhash Chandra Goyal.
The decision on Tata-Singapore had long been expected. "Nowhere
in the world are foreigners allowed to enter the domestic sector,"
Ibrahim said. "Would you like an airline owned by China in
your domestic sector? What if there is a war tomorrow?" asked
Yogesh Chandra, the civil aviation secretary.
Predictably, the move has upset the Tatas. The Tatas said they had not
been officially informed by the ministry.
"We will decide the course of action only after we get the
formal notification," said Ravi Dubey, vice-president, corporate
relations, Tata group. However, Sujit Gupta of Tata Industries
has already left for Singapore to sort out issues.
The Tata-SIA project goes back to 1995 when it was submitted to
the Foreign Investment Promotion Board. However, the then
minister for civil aviation, Ghulam Nabi Azad, was not keen on
the project. Accused of giving licences to numerous private operators
indiscriminately, Azad had ruled out allowing any more private
airlines. The proposal gathered dust for almost two years till
finally, in December last year, the FIPB cleared it in a sudden
and unexpected move and forwarded it to the Cabinet Committee
on Foreign Investment.
But before the Tatas could rejoice came the first hitch. The CCFI
refused to clear the project and referred it to the civil aviation
ministry. But Ibrahim had already
begun to voice his objections to the project. Ratan Tata, now
very hopeful, met Ibrahim in February, and a couple of days later
held a press conference to announce the details of the project.
But word was already out that Ibrahim was only waiting for the
right time and manner in which to throw the Tata-SIA proposal
Meanwhile, debate raged on as to whether it was sensible to allow
foreign airlines to have the run of domestic aviation. Aren't
there certain areas of geopolitical importance that should be
reserved for Indians? Ibrahim let things hang till after the Congress
The civil aviation policy was cleared by the Cabinet on April 1.
The aviation policy forbids any foreign airline or airport authority
from entering the domestic aviation sector. Those with existing
foreign airline or airport participation have been given six months
to divest the equity.
That day, Naresh Goyal must have been the most relieved man in
the country. This time, Tata-Singapore had seemed on the verge
of being cleared. Goyal's Jet Airways is the only private airline
in the country managing to break even. And despite Planning Commission
projections on growing demand, with Jet Airways and the state-owned
Indian Airlines already in operation, there wasn't enough place
for three big players to survive.
Kind courtesy: Sunday magazine
C M Ibrahim, continued