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New Delhi, Sept 18: The Tatas have objected to union civil aviation minister Ananth Kumar's assertions on the Tata Airline project at the Economic Editors conference. They have said that the technical fee to be paid to Singapore Airlines (SIA) would form 2.8 per cent of the revenues earned by the airline.
This is in line with the guidelines for technical fees laid down by the Reserve Bank of India (RBI). In a release on Friday, the Tatas refuted the minister's charge that the technical fee to be paid to SIA was high.
"The technical fee to be paid to SIA was Rs 165 crore over five years and not Rs 300 crore as stated by the minister. During the same period, the revenues generated by Tata Airline were expected to be about Rs 5,733 crore," said the release. This works out to 2.8 per cent of revenues.
The Tatas also disagreed with Kumar's statement that the airline proposal was not clear on the composition of foreign institutional investors (FIIs) who were to take 40 per cent of equity in theproject.
Kumar had said at the conference on Wednesday that his ministry attempted to ascertain whether any link existed between the Government of Singapore Investment Corporation (GIC), one of the FIIs, and Singapore Airlines.
The release said that the ministry failed to seek any clarifications on the FIIs from the Tatas. The Tatas last corresponded with the ministry on the issue of the FIIs on July 6, nearly two months before withdrawing the project.
"It therefore strains the credibility of the minister to say that the ministry was seeking information about possible links between possible investors and a foreign airline," said the release.
The Tatas have said that they did not give definite names of FIIs investing in Tata Airlines. The group had informed the ministry that GIC and American Investment Corporation (AIG) had shown interest in becoming investors in Tata Airline.
The Tatas had clarified to the governement the group would ensure that the FIIs who pick up stake in the airline do not haveany foreign airline shareholding. The FIIs would be finalised only after government approvals are obtained.
The Tatas withdrew their Rs 1,475-crore proposal on September 1 after alleging undue delays by the government in clearing the project. According to them, the ministry's move to stall the proposal without specifying any reasons for the delay was a biased one.
The Tata Airline proposal was submitted to the government in December last year.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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