BRPSE to again take up Air India losses assessment issue

BRPSE to again take up Air India losses assessment issue
PTI
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First Published: Sun, Jan 24 2010. 11 03 AM IST
Updated: Sun, Jan 24 2010. 11 03 AM IST
New Delhi: Taking on the civil aviation ministry over the financial health of Air India, the Board for Reconstruction of Public Sector Enterprises (BRPSE) will again press for assessing balance sheet of the state-owned carrier and declare it sick if need be.
The civil aviation ministry has already rejected an earlier proposal from the Board for Reconstruction of Public Sector Enterprises, an advisory body that suggest measures for strengthening and reviving public sector companies, to check the balance sheet of cash-strapped National Aviation Company of India Ltd (Nacil), which runs Air India.
Notwithstanding the response from the ministry, BRPSE chairman Nitish Sengupta confirmed to PTI that the matter is being taken up on the meeting of BRPSE board scheduled to be held on 4 February, without specifying details.
The civil aviation ministry had rejected a proposal from BRPSE to study the balance sheet of cash-strapped Nacil saying the matter is pending before a group of ministers (GoM).
“We don’t have any comments to make on this issue. We are currently working closely with the group of ministers, headed by finance minister Pranab Mukherjee, on a revival plan for the national carrier,” civil aviation secretary M Madhavan Nambiar told PTI.
He said Air India’s turnaround plan was being implemented on the basis of the recommendations of the GoM.
Nacil was formed after the merger of Air India and Indian Airlines in 2007 and has been incurring losses every year. It had a loss of around Rs5,500 crore in the last fiscal and Rs2,226 crore in 2007-08.
As per norms, BRPSE take up the matter of checking the sickness of the central public sector unit on its own or with the reference of administrative ministry if the firm incurred loss for two consecutive years.
Also, BRPSE can declare a central public sector unit sick if a CPSE had accumulated losses in any financial year equal to 50% or more of its net average worth during four years immediately preceding the year when the loss is reported.
Sengupta had earlier said that when BRPSE wrote to Air India seeking to study its balance sheet, both the Prime Ministers’s office and the finance ministry were informed.
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First Published: Sun, Jan 24 2010. 11 03 AM IST