Asthana may be CBI Chief! Fly on the Wall

by Harish Gupta, National Editor, Lokmat Group

Asthana may be CBI Chief! 

The three months long Rhea Chakraborty saga may finally come to an end after the Narcotics Control Bureau (NCB) doused the political fire in Bihar by arresting her. The graph of Rakesh Asthana, DG, NCB has jumped manifold in the eyes of political masters in Delhi. Asthana has succeeded where CBI Director R K Shukla and Enforcement Director Sanjay Kumar Mishra failed in the task even after 50 hours of grilling running for weeks together. A top ED officer who specially flew down from Delhi to Mumbai and part of the extensive grilling told his bosses: Sorry Sir! Not an iota of evidence.” Thus, the NCB stepped in. This column had said last week itself that NCB will arrest Rhea. Insiders tell us that Asthana’s prospects of becoming new CBI chief have brightened when Shukla retires early next year. Asthana had been extremely unhappy ever since he was shunted out from the CBI last year.

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Sonia offensive, Dissidents defensive 

The 23 dissident Congress leaders are running for a cover after raising a banner of revolt against the Gandhis. Instead of buckling under the pressure, Congress’ interim president Sonia Gandhi has gone on the offensive. If she shocked dissidents by appointing Rahul loyalists in key parliamentary panels, she humiliated a few by dropping them from UP committees. As if this was not enough, Akhilesh Prasad Singh, Rajya Sabha MP and Bihar Campaign Committee chief was dropped from the powerful Bihar Election Committee. If sources are to be believed, the G-23 is a house divided with Mukul Wasnik, Manish Tewari and Shashi Tharoor singing different tunes. Tewari went public recently saying the letter’s drafting could have been better. Obviously, it’s a dig at Anand Sharma who drafted the letter. Tharoor is buying peace as BJP has no strong presence in Kerala while Mukul Wasnik has his own reasons for backtracking. Prithviraj Chavan who owed his rise to the post of Maharashtra Chief Minister to Sonia Gandhi, has gone into hiding after raising a banner of revolt.

Whispers galore over Amit Shah

Union Home Minister Amit Shah is back at his Krishna Menon Marg residence and recouping after suffering from Covid and fatigue. Being Prime Minister Modi’s Man Friday, Shah has been batting from the front foot. But for the past some time, he has been away from public glare.

The Fly learns that he is fully active and clearing files at a faster pace though avoiding attending office. The gossip mongers in Lutyen’s Delhi have all kinds of tails like Amit Shah being upset for not being invited to the Ram Janmabhoomi foundation stone laying ceremony, appointment of C R Patil as Gujrat BJP chief etc. etc. Insiders assert there is no truth as the equation between the PM-HM remains strong. The PM inquired about his health on a daily basis since August 2 when he was admitted to Medanta and visited him after he returned from AIIMS. These sources say, “Modi-Shah relationship is like that of Ram and Hanuman and no power on Earth can separate them.”

Selling Air India Herculean Task

India’s flagship Air India is first on the block among the 26 PSUs to be sold before March 31 next year. While there are many takers for BPCL and others, selling Air India is turning out to be a Herculean task for the Civil Aviation Minister Hardeep Singh Puri. It transpires that the House of TATAs is somewhat disinclined. The TATAs already operate Air Asia & Vistara and CEO N Chandrasekaran is reluctant to put in this kind of money in the aviation business. However, two gulf nations have shown interest riding on the back of cordial relations with PM Modi. The government is keen to mop up at least two lakh crores from the PSU sale during 2020-21 to bridge 8% Budget deficit.

Amit Shah led GoM clears sale of Air India

by Harish Gupta, National Editor, Lokmat Group

Amit Shah led GoM clears sale of Air India

Bids invited, March 17 deadline 

Hindujas, TATAs keen to enter aviation sector

Harish Gupta

New Delhi, Jan. 27

With the government finally coming out with a public advertisement for sale of 100% equity and management control of Air India today, all eyes are set on prospective buyers. The last date of submission of Expression of Interest (EoI) is March 17, 2020.

Informally, the Tatas, Hindujas, IndiGo, SpiceJet and a few private equity firms including some foreign companies have shown interest in buying Air India.

The 100% sale of Air India also includes its 100% owned subsidiary Air India Express Limited and 50% AI SATS Airport Private Limited. A private company, Ernest & Young, has been appointed sole transaction adviser for the deal. The Modi government had invited the EoI in 2018. But at that time, the government wanted to sell only 76% stake. Secondly, the financial liability was also huge. Thus, no one turned up. 

Later, the PM appointed Union Home Minister Amit Shah as head of the Group of Minister for AI's sale, lock,stock & barrel. The  Amit Shah led committee decided to off-load 100% equity with a rider that AI's control will remain with an Indian entity, limiting the scope of any foreign bidders interested in the asset to 49%.The Indian partner will have to hold 51% equity. It also decided that the buyer will be liable to pay the debt relating to the aircraft AI has in its fleet and not others.

This certainly made it a lucrative offer for any bidder. The aircraft debt is roughly $3.26 billion. The government offered to transfer remaining debt into a Special Purpose Vehicle (SPV) which the buyer won't have to pay.

Air India has a fleet of 125 aircraft and its domestic market share is 11.9 per cent as on December, 2019. A successful bidder would win control of the airline's 4,400 domestic landing and parking slots and 1,800 international slots at Indian airports, as well as 900 slots at airports overseas.

Industry experts are keeping their fingers crossed as the overall environment is not positive in the economy despite the Modi government taking a series of steps.

The Modi government has made it clear that it won't lend further financial support to AI and may shut down if the second disinvestment bid fails. It is incurring a daily loss of Rs 20-25 crore. 

Govt. Disinvestment plan goes for a toss

by Harish Gupta, National Editor, Lokmat Group

Govt. Disinvestment plan goes for a toss

BPCL, Air India waiting for buyers

Massive short-fall in revenue collections

Harish Gupta

New Delhi, Jan. 7

The divestment plans of the Modi government has taken a big hit this fiscal as plans to earn more than Rs one lakh crores by selling a few Navratna PSUs have taken a big hit.

A worried Prime Minister Narendra Modi is now prodding the captains of the industry personally to invest after the major cut in corporate taxes and series of measures taken by his government. In fact, the Modi government could raise only

Rs 17,364 crore through divestment during 2019-20 so far. The plans to sell BPCL, Concor, Air India and several others have not yielded any results.

The luck-luster response even from the foreign investors to buy businesses has made the Modi government to re-work modalities to raise hundreds of thousands of crores needed to fill the government coffers as revenues are dwindling. The GST collections are down by as much as Rs 1.18 lakh crores during 2019-20 and direct tax collections are far below the estimated growth. The short-fall in net revenue collection could be as high as Rs 2.50 lakh crores if divestment targets are not met.

The desperate government is now wanting to sell the BPCL for a song. Though the real value of the BPCL is more than Rs 1.50 lakh crores, it is willing to off-load it for Rs 75000 crores only. The government is now spending less on projects and social welfare schemes as a measure to keep the fiscal deficit in check. The big-bang VRS plan for the BSNL employees to dole out Rs 69000 crores is also being delayed as there is no money in the kitty. The down-fall in the financial markets including the sensex had caused anxiety in the government.

In the global uncertain conditions and growing social unrest in India has vitiated the investment climate. The foreign funds believe in making quick money in the share market and walk away rather than put up long term investment in plants. It is in this background that the government is unlikely to complete the strategic sale of Bharat Petroleum Corporation (BPCL), Container Corporation of India (Concor), and Air India by March-end.

The Prime Minister's meeting with the industrialists yesterday has not yielded expected results. The PM candidly asked them to give frank suggestions to boost the economy rather than praising him and economy. They told him in one voice that consumer sentiment required a boost.

Ends 

Air India Divestment process to begin next month

by Harish Gupta, National Editor, Lokmat Group

Air India Divestment process to begin next month

Chairman Lohani task cut out

New GoM formed under Amit Shah

Harish Gupta

New Delhi, July 31

The Air India's divestment process will start next month and fresh bids under the new terms will be invited in October.

Ashwini Lohani, Chairman and Managing Director (CMD) of AI Ashwini Lohani is working overtime to off-load the huge loss making flag carrier at the earliest.

The AI's operating loss is bigger than that at all the private airlines put together during the last financial year 2018-19. The total operating loss of Air India alone losing Rs 4,330 crore during 2018-19. Despite an increase in operating revenue, Air India’s higher operating cost have resulted in losses.

Ashwini Lohani is struggling to bring down this operating cost of the loss making career.

The proceeds from disinvestment will go into paying off the debt of the SPV. The remaining debt of Rs 28,887 crore is going to be set off by the new buyer. When the first bid of divestment failed, the government wanted the buyers to take over Rs 33,392 crore of debt and liabilities of AI and Air India Express as part of debt reallocation. But there were no takers and the efforts failed.

Despite these plus points, the government might find it daunting to divest the Air India.

When Lohani retired as Chairman of the Railway Board, Prime Minister Modi specially chose him for the coveted post as Chairman Air India so that he takes the hard decision to divest it within the time frame that the PM re-constituted Air India Specific Alternative Mechanism (AISAM), a high-powered ministrial committee headed by Union Home Minister Amit Shah. Finance Minister Nirmala Sitharaman, Civil Aviation Minister Hardip Puri and Commerce & Railway Minister Piyush Goyal are other members.

The government has modified several terms including divestment of upto 95% ownership while retaining 5 per cent for the employee stock option. The new buyer can sell the airlines to merge with anybody or reverse merge and sale to others.

If reports are to be believed, Ashwini Lohani's task is cut out to divest by February 2020 and acquire a new mission.

Ends 

Strategic sale of AI, ITDC on cards

by Harish Gupta, National Editor, Lokmat Group

Strategic sale of AI, ITDC on cards

22 sick PSUs to be shut down

AI failed to revive itself even after a ballout package of  Rs.20,000 crores.

PSUs suffer One lakh crores annual loss

Harish Gupta

New Delhi, Feb 28

The Modi government has served an ultimatum to country’s 45 loss-making Public Sector Undertakings including Air India, India Tourism Development Corporation (ITDC) etc to perform or perish.

Highly placed sources in the Prime Minister’s Office and NITI Aayog say that the PM is determined to cut down Rs one lakh crores annual losses incurred by these PSUs year after year and there is no accountability.

One of the proposals gathering pace is to find a strategic partner for Air India. The PM felt at a recent review meeting with AI Chairman Ashwani Lohani that the flagship airlines failed to revive itself even after a bailout package of Rs 20000 crores. Modi made it clear that the government would not waste tax payers money anymore and gave three more months to him to tone up.

Similarly, the NITI Aayog came to the conclusion that the government should not have any business to be in the hotel business and barring the Ashok in the Lutyen’s Delhi, the government should exit them.

failed to turn around the loss making national carrier, people with knowledge of the matter said.

It now transpires that several presentations have been made to the finance ministry and the PMO by experts and stake holders in the recent past.

The NITI Aayog, tasked with preparing a roadmap for ailing PSUs, had submitted a list of 74 companies, had suggested the closure of 26 companies. With regard to remaining 54, the Aayog suggested status quo in case of two PSUs, strategic disinvestment of 10, revival with option for strategic disinvestment for 22, transfer of ownership of six, merger of three and long term lease of five.

Finally, the government has decided to shut down 15 loss-making public sector units, of which at least five have been cleared by the cabinet, while opting to go against internal advice and revive three state-run companies.

The Centre also has to meet its disinvestment target of Rs 56,500 crore. On the list are large state-run companies such as Container Corporation of India, Bharat Earthmovers, as many as three plants of the Steel Authority of India and unlisted entities like Cement Corporation of India. The government has also exited from stocks held by SUUTI in some of the private sector companies like ITC, L&T and others. SUUTI is an arm of the central government which held stocks running into thousands of crores.