The last quarter of 2009 has again raised some hopes of revival of the aviation sector in the country. The bad patch is almost over and the sector is looking forward to make up now, the aviation minister has said

The aviation sector all over the world has suffered setbacks in 2008-2009 due to global recession, fuel prices and load factor but it will revive by 2011, Union civil aviation minister Praful Patel said on Monday, reports PTI.

"There was a drop of 30% in passenger load factor leading to losses in many top airlines in the world including British Airways. But the last quarter of 2009 has again raised some hopes of revival in the country," Mr Patel told reporters in Nagpur.

The bad patch is almost over and we are looking forward to make up now, he said. Asked about the Parliamentary Committee's remarks stating that the decision to merge national carriers Air India and Indian Airlines was taken in haste, Mr Patel said, "It’s a baseless story. My ministry has already issued a clarification on the same day."

On the proposed maintenance, repair and overhaul (MRO) facilities of aircraft manufacturing major Boeing in the city, Mr Patel said that the company was in the process of setting up a $100-million project soon.

To a question, he said that Air India will soon resume the Nagpur-Dubai international flight which was discontinued last month. Necessary instructions have been issued, he added.

Air India is in the process of launching a cargo hub very soon in Nagpur while Deccan Aviation has already started one from the city, Mr Patel said.
 

A rate hike may become inevitable, as the government's limited financial resources are not enough to meet the revenue lost on selling petrol, diesel, LPG and kerosene below cost

The Indian government may decide on freeing petrol and diesel prices after an expert committee on fuel pricing submits its report this week, petroleum minister Murli Deora said on Monday, reports PTI.

Finance minister Pranab Mukherjee is believed to be in favour of giving state-run oil companies freedom to fix prices of petrol and diesel in step with costs, as he feels that the current moderate global oil rates may be the last window India has to deregulate fuel pricing.

"We are trying our best to see that prices are not raised," Mr Deora told reporters. But a rate hike may become inevitable as the government's limited financial resources are not enough to meet the revenue lost on selling petrol, diesel, LPG and kerosene below cost.

"The Cabinet had in July 2009 decided that the government will meet all of the under-recovery (revenue loss) on domestic LPG and kerosene either through bonds or in cash and the same on petrol and diesel was to be met by upstream companies like Oil and Natural Gas Corp (ONGC)," he said.

While ONGC, Oil India and GAIL shouldered the entire Rs8,364 crore under-recovery on petrol and diesel in the first three quarters of the current fiscal, the government has agreed to give only Rs12,000 crore in cash against the Rs20,989 crore revenue loss on cooking fuel in April-December.

"We will be meeting the finance minister tomorrow to see how this under-recovery is to be met," Mr Deora said, adding that a decision on fuel pricing was likely only after the Kirit Parikh committee submits its report this week.
 

A fresh or snap tender from BSNL for an estimated Rs36,000-crore GSM mobile equipment contract could still be challenged by corporate rivals, telecom minister A Raja has said in a letter to the PM

Apparently peeved by the vigilance authorities' direction for a fresh or snap tender to procure equipment for state-run Bharat Sanchar Nigam Ltd (BSNL), the telecom ministry has complained to prime minister Manmohan Singh that corporate rivalries were affecting the government's decision-making, reports PTI.

Pointing out that a fresh or snap tender for an estimated Rs36,000-crore GSM mobile equipment contract could still be challenged by corporate rivals, telecom minister A Raja brought to Dr Singh's notice various developments that have delayed the telecom company's expansion for nearly two years.

BSNL had invited bids to add 93 million GSM lines about two years ago and one of the leading vendors Nokia-Siemens Network (NSN) was disqualified on technical issues, and since then, the state-run company has not been able to place the orders due to various reasons including legal battles.

Swedish vendor Ericsson was the lowest bidder for the Northern and Eastern regions, while China's Huawei was selected for the Southern zone. NSN had challenged the disqualification in two High Courts which had upheld BSNL's decision.

"In this regard, you will appreciate the trend where corporate rivalries are buffering government decision-making," Mr Raja said in his letter to the PM.

The minister said that BSNL needs these lines urgently in view of its rapidly-declining market share and said that its inadequate capacity to add mobile subscribers may lead to further deterioration in its market share.

It has been more than 20 months since BSNL is trying to put in place the procurement order, Mr Raja said in his letter, adding that “it appears that the CVC observations mainly pertain to the rejection of NSN, which has been examined in detail and upheld by two High Courts earlier”.

Earlier, Department of Telecom (DoT) joint secretary JS Deepak, who is on BSNL's board as the government nominee, had questioned the single bid brought out by BSNL and the lack of comparative analysis on the basis of total cost to the company.

To this observation, BSNL had maintained that at the time of inviting bids, many vendors were in the fray and their bids had been scrutinised, but in the end only one vendor emerged as the lowest bidder in the respective zones. The process cannot be categorised as a single bid, BSNL officials said.

Cancellation or any delay in the contract could hit BSNL hard at a time when the government is thinking of disinvestment, a senior official said on condition of anonymity, adding that in such an eventuality, only corporate rivals could be benefited.

BSNL's capacity to add more mobile subscribers is diminishing in most of the centres at a time when private players are adding 15 million-17 million new users every month.

Further delay in execution of the project would affect BSNL both in terms of market share as well as revenues.