New Delhi: Parliamentarian and an anti-corruption crusader Subramanian Swamy has termed the auction of national carrier as ‘rigged process’ to hand over the airline to Tata for the price of scrap.
Responding to Civil Aviation Minister Hardeep Singh Puri’s statement that financial bids for the airline will be invited in coming days, Swamy warned of legal action against the move.
“It is a rigged process to hand over to Tata for the price of scrap. PIL getting ready,” the BJP MP wrote on Twitter while replying to a tweet.
The bidding process of Air India has been questioned by many aviation industry watchers ever since Department of Investment and Public Asset Management (DIPAM) did away with the requirement to disclose the names of bidders for state-owned airline within the specified time.
As per rules of the auction set by DIPAM, the government was required to disclose the names of bidders in the first round by January 5, 2021.
In absence of official announcements, there has been a media speculation about Tata being the frontrunner for the flag carrier. Other names are also floating but they seem to be intended at gaining cheap publicity and spreading misinformation.
Dr Subramanian Swamy has been quite vocal against Air India privatization and had earlier put forward his views in a Parliamentary panel meeting on the issue. Given Swamy’s past records of fighting common cause in the interest of general public and taking them to logical conclusion, it would not be easy for the government to ignore his concerns.
Ever since the government re-started Air India’s disinvestment after it failed in its earlier attempt, the deal has been excessively sweetened for private players. So much so that private parties can now quote enterprise value (EV) of the airline instead of equity value. This means that bidders will estimate combined value of AI’s equity and debt while offering the deal.
As per the changed bidding norm, the private party quoting the highest EV will get the airline. The winning bidder would give at least 15% of this EV value in cash to the government while the rest can be taken on as debt along with Air India.
Whoever buys the airline, selling it at its enterprise value is the only option available for a last ditch attempt to save it. Prior to 1948, Air India originally belonged to Tatas in the name of Tata Airlines, so there shouldn’t be anything wrong, if it goes back to Tatas again; only the process should be transparent.