National
Tatas pull out of AI bid
By Our Special Correspondent
NEW DELHI, DEC. 7. The process of disinvestment in the civil aviation sector has come to a standstill with the Tata Group, the sole bidder left in the fray for Air India, deciding to withdraw from the race.
Tata Sons conveyed its decision to the Department of Disinvestment earlier this week that it was bowing out as it could not find a strategic partner after the Singapore International Airlines (SIA) pulled out. The recession in the aviation sector after the September 11 events in the U.S., has also influenced the business house's decision to back out of buying the government stake in the airline founded by J.R.D. Tata.
The disinvestment of Indian Airlines is already off as the security guidelines framed by the Cabinet Committee on Security disqualified the two bidders - Videocon International and the Hindujas. With this, the Government-owned domestic airline and the country's flag carrier, remain under Government control.
Reacting to Tata's pull-out, the Civil Aviation Minister, Mr. Shahnawaz Hussain, told The Hindu that the Government will review the situation. The Government was committed to disinvestment as a policy but if no bidders were left in the fray - for whatever reasons - another look would have to be taken at the disinvestment process.
However, all out efforts would be made to ``strengthen'' Air India and make it into a competitive and profitable venture. For starters, the airline would go in for expansion of fleet through lease and vitalise the voluntary retirement scheme.
Sources said while withdrawing the Tatas also blamed the slump in the global aviation industry for putting in abeyance its decision to foray into aviation business.
Tatas had earlier given up its plan to enter into the domestic aviation scene in partnership with SIA when the Government policy did not allow foreign airline entry into domestic sector. (This, however, is being proposed to be altered in the new Comprehensive Policy that is in the making.)
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