AI: Singapore Airlines pulls out

By Sushma Ramachandran

NEW DELHI, SEPT. 1. The Government is prepared to let the privatisation plan for Air India die a natural death in case the Tatas are not able to find another joint venture partner. This was disclosed here today by the Disinvestment Minister, Mr. Arun Shourie, shortly after being elevated to Cabinet rank, while describing the decision of Singapore Airlines (SIA) to withdraw from the bidding as a substantial setback.

The Cabinet Committee on Disinvestment (CCD) will then have to consider the future of privatisation for Air India as the Tatas now remain the lone bidders for a strategic 40 per cent stake in the State-owned airline. The Tatas consortium partner, SIA, which has withdrawn from the bidding process today, blamed the ``the adverse climate'' and intense opposition to privatisation as one of the reasons for opting out. It expressed surprise at the intensity of opposition to Air India's privatisation from various quarters including certain sections of political groups, trade unions and the media. ``In such an adverse climate, SIA is not confident that it can play a useful and effective role,'' it said.

Mr. Shourie, said the atmosphere had been vitiated by lobbyists who wanted the arena clear for Jet Airways. He told The Hindu that nothing further could be done if people were determined to create a situation in which bidders would be scared away.

But the Government would not revive the bidding process, he said. Instead, it would wait for Air India to look around for other Indian and foreign partners. The process would take about two months, he felt. ``We must learn a lesson from this'', he said and warned that the same thing would happen with other enterprises in this kind of an atmosphere.

He pointed out that there were no bidders left for Indian Airlines as well and argued that both these developments would not do the country's image any good. As for the Cabinet Committee on Disinvestment, he said it was likely to meet this month in the normal course and these issues would be taken up at that time.

The Tatas have told Mr. Shourie that in the light of these developments, the group would review the situation and subsequently revert to him. The Tatas have also stated that Air India has always been ``very dear'' to them. The group would therefore assess the situation arising from SIA's decision to withdraw with ``an open mind,'' it said.

The SIA decision comes close on the heels of the Hindujas withdrawal from the bidding on Friday though this had virtually been a foregone conclusion. The guidelines laid down on security issues by the CCD clearly excluded the Hindujas who have been upset about being kept out in this manner.

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