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Wednesday, September 2, 1998

How the Tatas lost the battle lost Tatas' way 

Veeshal Bakshi & Aparna Kalra  
New Delhi, Sept 1: When a young JRD Tata proposed the idea of promoting Air India to the British Government in 1932, it took only six months for the imperial crown to give a nod to the nationalistic project.

More than six decades later, his successor Ratan Tata has been virtually forced to abandon JRD's dream of setting up a domestic airline, frustrated by four successive governments' dilly-dallying over the proposal for more than three years.

Ironically, the largest corporate house of the country which boasts of an annual turnover of Rs 45,000 crore, either failed to convince or, as many believe, could not use the right connections to obtain a decision in their favour.

What has intrigued many is that the Tatas could not curry favour with four successive governments headed by four different prime ministers and three different political parties, P V Narasimha Rao of Congress, Deve Gowda and I K Gujral of United Front and Atal Behari Vajpayee of BJP.

The Tata top management, which had spent sleeplessnights before every FIPB meeting for months, conferred fiercely in Bombay House for two days after the Board deferred the proposal for six weeks last Saturday. Ratan Tata himself is learnt to have taken the initiative to shelve the project. Enough is enough, was the unanimous view.

But what actually went against the biggest private sector airline project of the country, which promised an investment Rs 1475 crore and direct employment for 2,400 Indians by the fifth year of operation?

Though no direct evidence of their involvement has been unearthed, industry and political circles have been rife with reports ever since the Tatas submitted their proposal that the campaign against the project was spearheaded by Jet Airways and Indian Airlines through members of parliament and trade unions.

Add to this three weak coalition governments in succession, which desisted from taking a decision on a project. As pressure mounted from the lobbyists with missives coming-in from MPs and unions, the civil aviationministry frequently juggled the policy guidelines to keep the Tata airline grounded.

Finally, buckling under pressure last week, the civil aviation ministry decided to set-up an expert committee, the ultimate panacea, to examine the project.

The signals from the ministry were clear. The BJP government, while having no intention of clearing the project, would never actually junk it either.

Though the Tatas bent-over backwards to fit into each policy framework, industry insiders say that the project lost-out on two grounds: lack of careful PR and structured lobbying by the Tatas as compared to its detractors who left no stone unturned to scuttle the project.

While IA, for instance, used its stringent union leaders and strike threats to counter the Tata goodwill, the Tatas could not use effective threats in return. Similarly, against Jet Airways, the Tatas failed to trace any concrete proof of a foreign airline connection between the Naresh-Goyal owned private airline and Gulf Air and Kuwait Airways.

Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.


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