On Saturday, Civil Aviation Minister Praful Patel stated that planned and “systematic efforts” were being made by insiders and there was “opposition” from members to ensure that the long term process of merging Indian Airlines and Air India remains unsuccessful. Mr. Patel said, “I will tell you that there has been opposition from within and systematic effort to see that the merger does not succeed… by a lot of people in the organization. Now some unions also have to be blamed for that.” Acknowledging that the merger is a long process and it cannot happen overnight, he also said that it was the right step to take despite the delays in the past. “It was envisaged as a three to five year process…to say it is internally or inherently flawed is wrong.”

“It has been delayed-Yes. The fact is, who has to make it work-the organization. But I still feel, if these people do not make it work, they will be losers in the long run,” Mr. Patel also said that Air India’s problems were not due to the merger and it was not right to blame the merger for it.

“I would like to put across….if there are any problems, if there are losses and if there are systemic issues…please do not put one attribute of merger. That is another issue,” he said.  The Civil Aviation minister also said “Even today, there are two streams in the organization – one is domestic operations, which was earlier the Indian Airlines, and the other is Air India. But that doesn’t mean that anything is fundamentally wrong with the organization. It takes time for the whole pyramid to build”.  He also added “It is not that I conceived the merger. This merger discussion is going on in the Ministry from the days of J. R. D. Tata. .. chances were taken but nothing really fructified. Eventually it happened.”

No tolerance to indiscipline

The Civil Aviation Minister Mr. Patel avowed that in the wake of the recent strike that has upset the normal routine, he has bestowed the management of Air India with autonomy to take strict and necessary actions, as no tolerance will be shown to indiscipline.

During an interview for CNN-IBN news channel with Karan Thapar, the minister stated “I had made it very clear to the management that you have full freedom and you must do whatever is necessary in these circumstances. This (strike) type of gross indiscipline will not be tolerated,”

When questioned, as a consequence of the strike if further employees of Air India would be fired.“If they (airline management) feel, they are free to do it, we will not come into the picture,” said Patel.

According to him the Management of Air India had full authority to take actions on the two unions which could include rescinding the services of the union leaders and that the government did not have any say in it, thus detaching the government from the scenario at hand.

According to the latest reports, 154 passengers are feared to have been killed in the Air India Express Boeing crash. The Air India incoming flight from Dubai crashed when it overshot the runway at the Mangalore Airport on Saturday at 6:10 AM. Eyewitnesses claim that the aircraft was engulfed in flames after it crashed in to wooded valley.

The cause could have been poor visibility, as an Air Traffic control official told,” Visibility was six km.”
The crash victims who died are being taken to the Government Wenlock Hospital in Hampankatta, Mangalore.

The list of eight people who survived the crash include: Joel Prathap D’Souzaza (KMC hospital), Sabrina Haq, a medical intern at the Kasturba Medical College (KMC hospital), Pradeep G.K.from Tannirbhavi, Mohammad Umer Farooqi (KMC hospital), Krishnan Kollikunnu and Mayan Kutty from Kasargod. These survivors have been taken to the SCS Hosptial. Other survivors who include Abdullah Puttur Ismail and Mohammad Usman have been admitted in the K.S. Hegde Hospital, and Unity hospital, respectively.

Among the dead, victims who have been identified are a small child called Hiba Zeena and Narayan Rao (48) who was and employee at the Bejei Branch of Karnataka Bank.

The flight captain and his co-pilot are also in the list of people who did not survive. Nearby villagers were able to rescue six of the passengers.

“Anxious and frightened relatives and friends of the Air India Express flight passengers from Dubai that overshot the runway and burst into flames, throng the Mangalore airport for news of their loved ones. The airport authorities have pasted the passenger list on pillars in the airport. The exact number of causalties is still not known, but the injured have been removed to four hospitals. These are S.C.S Hospital, Balmatta, Mangalore; KMC Hospital, Jyothi Cirlce, mangalore; Government Wenlock Hospital; and A.J. Hopsital”, reports Govind Belgaumkar from Mangalore airport.

Ms D’Mello, who has been waiting anxiously for new of her relatives, Flavia Shakuntala Lobo (39), Vishal Floyd Lobo (8) and Venisha Nicola Lobo (15), says with tears in her eyes“”We are not getting any information. The help desk has given us the names of the four hospitals, that is all.”

Mr Farooqi, one of the few lucky survivors says that “I heard a loud noise and in a few seconds the cabin was full of fire and smoke. The plane disintegrated. I saw a burning hole and through it trees outside, and I managed to free myself and get to the opening. The opening itself was in flames, so I covered my face with my hands and jumped. I fell a few feet to the ground and saw it was a hilly area. I crawled away from the flames and some village residents took me on a two wheeler to the nearest junction. From there an auto brought me to the hospital”.

Retail investors and institutions have not given a very excited response to the offer of disinvestment of NDMC. It is now being speculated that government of India’s proposed target of revenue from disinvestment in the year 2009-2010 may fall short by about Rs. 2400 crores.

This is being feared in the light of the fact that the bid for just 17% of offered shares were received on the first day. What is even more concerning is the fact that most of the received bids are not as high as what was being expected. Government hopes to sell around 33.2 crore shares which are equivalent to 8.3% of its stake in the enterprise. Each share has been priced from Rs 300 to Rs. 350. The last day to purchase this is 12th March 2010.

With only one day left for this issue, merchant bankers are hoping that they will get loads of bids on 12th March. But they are not very hopeful about the pricing of shares and think that from what the bids are indicating, they can only be sold at the lower end of price bracket. Government wanted to raise Rs. 24,958 crore from disinvestment in the year 2009-2010. But, it has been able to raise only Rs. 13,591 crore so far. This money has been raised by disinvesting in Oil India Ltd, Rural Electrification Corporation and National Hydro Power Corporation.

Obviously, the target seems unattainable; considering the government still needs to raise Rs. 12,368 crore and even if the NDMC shares are sold at the highest end of price bracket i.e. Rs.350, the Government will still fall short of Rs. 738 crore.

Plus, a sale on the higher end of price bracket is highly unlikely and if the Government is forced to sell its stake on Rs. 300 per share, then only Rs 10,000 crore will be raised. In other words, government will miss its disinvestment target by Rs. 2367 crore. Here, it is necessary to remember that the OIL and NHPC got great response from the investors when their issues were offered to public. Some experts think that the aggressive pricing of NTPC’s share is the main reason for lack of interest by investors. Per share cost of NTPC issue was Rs. 201, even though the prevailing price of such shares in secondary market was around Rs 207.

NTPC shares were subscribed by just 1.2 times on the purchase orders from national institutions, such as LIC. Rural Electrification issue has also received a lukewarm response and its shares were subscribed by just three times.

Disinvestment is showing good signs and the disinvestment department has announced that in the year 2010-2011, it will raise around Rs. 40000 crore from this process. The department is optimistic that it will be able to meet the target set by the Finance Ministry of India.

Sumit Bose, the disinvestment secretary, said, “Those Rs 40,000 crore are estimates and we will certainly meet them.” He was talking to journalists and gave theses estimates in response to a question about the possibility of the accomplishment of the target set by the government in this issue.

Finance Minister Pranab Mukherjee has increased the target of income to be raised from disinvestment in CPSUs by Rs. 15,000 crore for the year ending on 31st March, 2011.

According to Sumit Bose, the department will be reviewing its situation. They plan to take each of the disinvestment case individually. When inquired about the roadmap of the department in the next 12 months, he said, “Can we have a roadmap for the entire year? No. And why should the government comment about something 12 months ahead?”

In the last fiscal year, the department has done disinvestment of companies like Oil India and NHPC. The disinvestment of Rural Electrification Corporation and NTPS was completed in February 2010. The follow-on issue on NDMC is opening on 10th March, 2010. There were plans for the disinvestment of Satluj Jal Vidyut Nigam in this fiscal year, but it has now been postponed till next fiscal year. There are also plans for the disinvestment of Engineers India which has got the approval from the Cabinet.

The Cabinet has decided that all public sector units which are listed and profitable should have a public holding of a minimum of 10% and all the unlisted CPSUs shall be listed in the coming years. This decision has brought about 60 government-owned units under the criteria of disinvestment.

Few days ago, Sunil Mitra who is presently the revenue secretary and ex-disinvestment secretary, said that CPSUs such as BSNL, SAIL and Coal India are expected to be disinvested in the coming year.