Home / Companies / CAG raps Air India for 15 crore ‘wasteful’ expenditure

New Delhi: Air India on Tuesday came in for severe criticism from CAG for “wasteful expenditure" of over 15 crore on several counts, including its failure to surrender leased premises at London Heathrow airport which remained unused for nine years.

MAL also agreed to refurbish the warehouse at its own cost and pay minimum royalty of £30,000 or 0.24 crore per annum, besides paying half of the electricity, water and heating costs, it said, adding that MAL did not pay £45,000 ( 0.35 crore) worth of royalty.

Subsequently, MAL’s regulated status was withdrawn by UK’s department of transport owing to security lapses and it could not use the warehouse for cargo handling, CAG said. However, “despite receiving an offer from BAA in 2003 for early termination of lease at a market value of £3.35 million (Rs 26.23 crore), the company (Air India) inexplicably preferred to hold the asset idle over the years," it said.

CAG said it was imperative for Air India “to act promptly for surrendering or utilising the space", considering the annual commitment towards rent and council taxes.

“The lackadaisical approach of the company in taking firm decision for the last nine years ending March 2012 indicated weak governance which resulted in a wasteful expenditure of 14.30 crore," the government audit body said. In another instance, CAG said Air India accepted “abnormally higher rates" for hiring transport for teams accompanying the Prime Minister in 2009, 2010 and 2011, thus spending an extra amount of over 75 lakh.

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