Flying squad

New Delhi, July 21: Civil aviation minister Praful Patel today sought the formation of a panel of ministers to negotiate a reduction in the prices of Airbus and Boeing planes to be bought by Indian Airlines and Air-India.

The new twist in the aircraft-purchase plan came on a day Indian Airlines asked merchant bankers to send bids for advising it on a proposed maiden issue in which 10 per cent of its shares will be offered to investors.

The call for a ministerial panel follows a controversy over prices quoted by plane-makers for IA and Air-India. Two group of MPs, including one led by Trinamool lawmaker Dinesh Trivedi, have written to Prime Minister Manmohan Singh complaining that quotes in both cases were on the higher side and needed to be brought down.

They argued that Airbus quoted prices 50 per cent higher than what it offered to a southeast Asian airline; Boeing, too, was ready to sell planes to a North African carrier 35 per cent cheaper.

The finance ministry, to which the IA deal was referred by the civil aviation ministry, wanted to know if the prices quoted were the lowest possible. It suggested that a final round of negotiations be held with the plane-makers. Patel today decided to have the deal steered by a panel of ministers.

The minister said he had written to the Prime Minister suggesting an oversight committee for A-I’s plane purchase. “There could be some delay, but it will be in the long-term interest to get a better deal. Hence, one last attempt should be made to get a better price,” he said.

IA offer

Officials said though the IA board had decided to put a 10 per cent stake on the block, they would ask merchant bankers to advise them not only on the timing, pricing and placement, but even the size. IA has a paid-up capital of Rs 107 crore, but a cabinet-cleared infusion of Rs 325 crore takes it to Rs 432 crore.