NEW DELHI: The recently formed Empowered Group of Ministers (EGoM) for the purchase of 43 passenger aircraft for the public sector carrier, Indian Airlines, on Tuesday concluded its "extensive deliberations" with the manufacturer, Airbus Industrie.

Briefing reporters after negotiations between the EGoM and the European consortium, Minister of State for Civil Aviation Praful Patel said that the EGoM would hold its "internal deliberations" on Wednesday and announce the decision.

Tuesday's negotiations were the first and last round and there would not be any further talks, Mr. Patel said. The EGoM explored all possibilities of "bettering" the initial offer made by Airbus Industrie three years ago that was pegged at Rs. 10,089 crores for 43 aircraft.

"I can assure you that the decision will not be beyond Wednesday. During the deliberations, several concerns were raised by the manufacturer also. We concluded all our discussions and our aim is to arrive at a better deal. The EGoM has to now hold its own internal discussions and that will be done on Wednesday," Mr. Patel said, indicating that the EGoM would be able to get "substantial concession" from the Airbus Industrie.

The Minister said the EGoM had "taken due note of all issues and looked at bettering the offer made by the Airbus Industrie and CFM [engine manufacturer] earlier." He refused to quantify the discount offered by the aircraft and the engine manufacturers but said it would be a good bargain. Discounts were being worked backwards from the price for 43 aircraft quoted at Rs. 10,089 crores. The aircraft and engine manufacturers are understood to have placed before the EGoM an alternative price plan. The public sector carrier had decided to induct 19 A-319s, four A-320s and 20 A-321 planes.

The Government had on August 25 referred the proposal for the purchase of aircraft to an EGoM for the final round of negotiations with Airbus Industrie. It is headed by Finance Minister P. Chidambaram and comprises Union Law Minister H.R. Bhardwaj, Programme Implementation Minister Oscar Fernandes and Mr. Patel.

At a meeting of the Cabinet Committee on Economic Affairs (CCEA), presided over by Prime Minister Manmohan Singh, it was decided to refer the IA-Airbus deal to the EGoM, a proposal which had been recommended by the Ministry of Civil Aviation.

After the EGoM clearance there would be no need to go back to the Union Cabinet for approving the deal.

The fleet purchase plan was cleared by the Indian Airlines Board in April 2002 and over the past three years it crossed other procedural hurdles such as the pre-Public Investment Board and the Public Investment Board (PIB).

It got stuck recently when the Union Finance Ministry wanted to know if Indian Airlines was getting the best price. The Ministry was of the view that a final round of negotiations could be held to lower the prices.

The Civil Aviation Ministry had favoured setting up of an EGoM or a Committee of Secretaries to hold the last round of price negotiations with the manufacturer despite the fact that IA's Price Negotiation Committeehad held talks with the Airbus and given the Rupee-Dollar exchange rate, the price was stated to be around Rs. 9,500 crores. With the EGoM stepping in, the deal is likely to be improved further in favour of the Government.

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