Jayant Sinha reiterates Air India sale commitment; Maharaja set to go private in December

Jayant Sinha, Chairman, Finance Standing Committee

The divestment process of the government’s stake in Air India is on track and the state-owned carrier will be in private hands by the end of the current calendar year, Minister of State for Civil Aviation Jayant Sinha said in Hyderabad on Friday. He said the expression of interest (EoI) inviting bids from private companies would be issued once the Arun Jaitley-headed alternative mechanism approved the document.

The alternative mechanism is a group of ministers, which on the advice of transaction advisor EY and other stakeholders like the aviation and finance ministries, is overseeing the Air India stake sale process.

“Our timelines are very clear. We have said this over and over again. Our goal is to award it by the end of June and to have the whole transaction closed and done and the transfer of the airline to the private sector by the end of this calendar year. Those are the DIPAM timelines that have been established and so those are the timelines we are working on. We are absolutely on track,” Sinha said on the sidelines of an event on the aviation sector.

Sinha’s statement is reassuring given that general elections are due next year and one would expect the government to not push ahead with a sensitive divestment that would be the largest in the history of the country’s public sector.

What lends credence to Sinha’s statement is the fact that Prime Minister Narendra Modi has taken charge of the Civil Aviation Ministry after the exit of Telugu Desam Party’s Pusapati Ashok Gajapati Raju from the Cabinet Thursday.

Much as the divestment of any government share in a public sector company is coordinated and supervised by department of investment and public asset management, it’s the Prime Minister’s Office that has been spearheading it in the case of Air India. The PM taking charge of the ministry should accelerate the process.

“There are a number of important issues that we have to sort through and then we have to get approval from the alternative mechanism that is chaired by the Honourable Finance Minister and that is a process that we are going through right now and as soon as we have the go ahead from the alternative mechanism the express of interest will be issued,” Sinha said.

Speaking on Thursday at ‘Wings’, the aviation event, Civil Aviation Secretary R N Choubey had said the EoI would be issued within two weeks.

The airline carries a debt of over Rs 50,000 crores, much of which will have to be absorbed by the government to attract private interest. The EoI will reveal how much stake the government would look to retain in the airline, if at all. It will also detail the number of units it would be split into, before being sold.