The Tata group is awaiting official word on their joint venture airline project with Singapore Airlines (SIA) after Prime Minister I K Gujaral's statement expressing dissatisfaction with India's civil aviation policy.

Incidentally, the Tatas have not withdrawn their application on the Rs 2,800-crore airline project. This implies that if the PMO brings about changes in the current policy, the Tata-SIA combine will not have to re-apply to the government.

"Our application is still with the government" said S Ramakrishnan, vice-president (projects), Tata Industries.

"We have always felt that while in all other industries the government has sought foreign investment from companies having required expertise, in aviation it has barred foreign investment by companies which have the expertise" he added.

The Prime Minister has favoured opening up the civil aviation sector. While this has brought cheer to Tata quarters, the group is not ready to celebrate till it receives official word on the green signal for their airline.

The Tata-SIA project for a private airline was first put up for government clearance two years ago. Last year, the project was cleared by the Foreign Investment Promotion Board (FIPB). It was then put up for consideration to the Cabinet Committee for Foreign Investment (CCFI).

Meanwhile, civil aviation minister C M Ibrahim rushed a new policy which barred investment by foreign airlines in domestic aviation sector, through the cabinet.

Following cabinet approval for the policy, the Tatas had recieved a letter stating that their project did not meet the parametres of the new policy.

The Tata-SIA combine had sought clarifications from the government on various aspects of the policy. The partners had found the government predictions of low air traffic growth questionable. It had also sought a detailed policy document from the Ministry of Civil Aviation.

Top brass of the group say that they have, so far, received only a single-page listing the `salient features' of the policy. The group has also not received any answers on the clarifications sought by it.

The Tata-SIA partnership still stands and inspite of speculations in the media, the Tatas have not declared any plans of entering the civil avaition sector alone without their foreign partners.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.