The civil aviation ministry's plea, sent late last night to the FIPB, that they needed some more time to see if the Tata proposal conformed to the latest civil aviation guidelines, frankly, doesn't hold much water. The fact of the matter is that the Tatas reply in which they had explained that their proposal conformed to the guidelines was sent to the ministry as early as June 18.

Nor is it that the Tata reply, or the details for which clarifications were required, were so complex that the ministry required more than a month to understand them. Briefly, the new policy had a few clauses towhich the Tatas had to conform. These pertained to foreign investment in the proposed venture -- the policy laid down that, under no circumstances, were foreign airline companies to be allowed to enter the domestic aviation sector.

So, there was to be no foreign investment from any foreign aviation company, or any company in which a foreign airline had any stake. Nor were any aircraft to be leased from any foreign airline, or any agreements to be signed which allowed foreign airlines to have control over Indian airline companies.

The Tatas, in their June 18 letter, gave a very categorical reply on where they stood in respect of these new clauses in the aviation policy -- they said, for the second time in six months, that they would conform. To cite specifics: they replied that no foreign airline (or company in which an airline had a stake) would be investing in their joint venture, and that they would conform to other guidelines such as those on leasing aircraft and the composition of the airlines boardonce their proposal was cleared.

(Incidentally, all these fears arise from the time that Singapore Airlines was a partner in the proposed Tata Airline, but the Tatas dropped Singapore Airlines from the joint venture in December 1997.)

In fact, not only did the Tatas communicate their decision to drop Singapore Airlines in December 1997, they wrote to the aviation ministry saying that their airline would not have any foreign airline equity, either directly or indirectly. In other words, even when the new guidelines were announced on June 11 this year, the Tata proposal conformed to it as far as the relevant aspects were concerned namely that no foreign airline would hold either direct or indirect equity in it. The civil aviation ministry, however, for reasons best known to itself, had told the FIPB when the Tata proposal came up before it on June 13, that it needed a month to see if the proposal conformed to the new guidelines.

As for the other clauses in the new guidelines -- not leasing aircraft fromany foreign airline, not entering into any commercial tie-up with a foreign airline, etc -- surely the Tatas could only promise to conform to them since they hadn't actually got an airline clearance till then! In any case, given the fact that the airline would have been given clearance after the new guidelines were issued, it is obvious they would have to conform to them.

Interestingly, the Tata proposal envisages starting off with only seven aircraft as compared to Indian Airlines' 57 and Jet's 22. How the airline can be such a big threat to existing players, as various MPs are now contending, is unclear. Unless, of course, it is a lot more efficient. In which case, by blocking the Tata proposal, the air-traveller will be the biggest loser.