The Hindu : CAG pulls up IA for losses

Online edition of India's National Newspaper
Friday, May 09, 2003

National

National

CAG pulls up IA for losses

By Vinay Kumar

NEW DELHI MAY 8. Indian Airlines has suffered a loss of Rs. 208.85 crores during the last six years due to delays in the completion of various checks of A-300 and A-320 aircraft in the engineering bases.

The failure of supervisory personnel was evident, the latest report of the Comptroller and Auditor-General (CAG) tabled in Parliament recently said.

The report rapped IA for delays in aircraft fleet maintenance, poor revenue management, injudicious implementation of promotional fares and under-utilisation of cargo capacity.

The report reviewed the performance of the public sector undertaking till March 2002.

IA delayed by five years the establishing of the auxiliary power unit overhaul facility that cost it Rs. 12.10 crores for getting the component repaired from abroad.

For fleet maintenance, IA spent Rs. 4165.39 crores during 1996-2001, constituting 26 per cent of the total operating expenditure during these years. Repairs done abroad involved excess expenditure due to non-pursuance of claims resulting from design deficiency.

IA paid Rs. 47.93 crores to Airbus Industrie to redesign and supply nose cowls fitted on all V-2500 engines of A-320 aircraft despite the fact that nose inlet cowls were expected to last the full life of the plane with periodic repairs and manufacturer failed to pinpoint the source of problem.

Similarly, it spent Rs. 24.02 crores on repair of Frame-47 cracks without holding any meetings of the committee, set up by the Board of Directors to discuss and resolve the matter with the supplier.

The company did not investigate a large number of incidents /occurrences associated with the operation of an aircraft other than an accident — in which safety of the aircraft was jeopardised.

"Impact of poor maintenance was reflected in very high percentage of delays and cancellations attributable to engineering reasons,'' the CAG report said.

IA was pulled up for procurement of a dedicated test rig for testing fuel nozzle of V2500 engines valuing Rs. 87.84 lakhs without ascertaining its actual requirement.

It resulted in the money remaining blocked about six years on the idle asset because a transformer was not ordered for three years till 1998 for the rig to be commissioned.

Cancellation of scheduled flights due to engineering delays went up substantially to 79 per cent in 1999-2000 compared to 55 per cent in 1998-99. While the revenue loss was not susceptible to estimation, such delays also damaged the IA's image.

Avoidable expenditure incurred on providing hotel accommodation, taxi fare, food extended to the passengers on this account worked out to Rs. 1.13 crores during 1999-2000.

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