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|September 2, 1998||
Government denies Tatas' charge of bias against airline project
Aviation Minister Ananth Kumar has denied the Tatas' charge that the government had inordinately delayed their proposed domestic airline project, forcing them to pull out of it.
Kumar said if any company thought that there was inordinate delay under four different governments, then "the whole thing is wrongly perceived and even more wrongly expressed and projected".
Initially, the project was envisaged as a joint venture between the Tatas and Singapore government subsidiaries -- Industries Investment Corporation and Singapore International Airlines. Last year, the proposal was put again by the Tatas as Tata Airlines.
He said: "It saddens me that whenever a thorough examination of a project is being considered, it is construed as dilatory tactics, thus missing the comprehensive and holistic view about the entire industry and the economy," he added.
He also clarified that the Union government would not allow any foreign airline to "directly, indirectly or surreptiously" have equity participation in the domestic sector.
He said the government would, however, allow foreign institutional investors, without any link to a foreign airline, to have a 40 per cent equity participation in the sector.
He said the policy guidelines were announced on June 11 after studying in depth the prevailing policies in the United States, Europe and the far-east Asian region. Various sovereign countries monitor their domestic aviation with due concern and precaution as it was "sensitive and strategic".
Asked whether the critical global economic situation had made the Tatas pull out from the project, Kumar said: "I do not want to attribute any motive to any company or entrepreneur, more so a pioneer company like the Tatas".
He said: "We want a fairly competitive growth in the aviation sector. The competition should be fierce not only in trunk routes but also in sub-regional routes for both passenger and cargo traffic."
Kumar said though the Planning Commission had projected a five per cent growth in domestic aviation, unfortunateluy, due to the global recession, the last two years saw a dip of minus 3.7 per cent in the air traffic growth.
He said the policy to permit only domestic equity was also considered following concerns and apprehensions expressed by the members of Parliament over the project. The civil aviation ministry decided to appoint an expert committee to go into all issues of concern so that the sector would not not become sick and there would be healthy competition.
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