Wednesday, Oct 20 2021 | Time 16:42 Hrs(IST)
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Business Economy


Air India bid rigged, needs to be scrapped: BJP MP Subramanian Swamy

By Nirbhay Kumar

New Delhi, Sep 13 (UNI) BJP leader and Rajya Sabha MP Subramanian Swamy on Monday red-flagged the ongoing bidding process to sell off the state-carrier Air India, claiming that it is "rigged" and threatened to move court against it.

Speaking to UNI, Swamy demanded scrapping of the process, days before the cut-off date (September 15) for submitting financial bids for the airline which has been bleeding financially for long.

The government had last year invited expressions of interest for selling 100 per cent stakes in Air India.

Tatas have been widely reported to be one of the two bidders along with SpiceJet promoter Ajay Singh. Neither has ever officially confirmed or denied their participation. The government too has been tight-lipped on qualified bidders for Air India and has maintained strict confidentiality.

"This bid is already illegal. Because the minimum requirement is of two bidders, it's a rigged one. Because SpiceJet is not really a bidder. It's in huge financial problem. It's in no position to run another airline or even have a merged airline with Air India. So, therefore, this will not stand," Swamy told UNI over phone.

"Tatas are not qualified. They are already under a cloud in the Air Asia (India) matter and I have got a court case on that. I have already brought this to the notice in writing to the Civil Aviation Ministry," he said, adding he "certainly" would go to the court.

Swamy said there was no rationale for selling Air India as it served public interest.

"There is no alternative but the government continuing with Air India," the BJP leader said.

The government, while maintaining secrecy, did not reveal even after the first round the names of those who qualified for the second stage.

"Multiple expressions of interest have been received for strategic disinvestment of Air India. The Transaction will now move to the second stage," Secretary, Department of Investment and Public Asset Management (DIPAM) had tweeted on December 14 last year.

The government has, over the last 18 months or so ever since the expression of interest was invited for selling the entire 100 per cent stake, made the deal attractive for prospective buyers.

Revising the bid criteria in October last year, the government had decided that bidding for Air India would be done on the basis of its enterprise value instead of equity value.

This was seen as a major sweetener as enterprise value includes equity, debt and cash held by the company while equity value measures the value of company shares.

Government has been firm in selling Air India this time and has stated that it would prefer to put money into social sectors than infusing into the airline.

The net block of fixed assets as per Books of Account of Air India for the period 2020-21 (provisional) after reducing the accumulated depreciation is Rs 40,078.11 crore. This includes Rs 17,871.93 crore on account of right of use assets (leased aircraft fleet/land).

"The enterprise value set for bidding has not been determined so far," Minister of State for Civil Aviation VK Singh had said in reply to a query in Rajya Sabha on August 11, 2021.

UNI NK/AKK
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