The Telegraph
Since 1st March, 1999
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Plane price panel set up
- BOEING bargain

New Delhi, Dec. 15: The cabinet today set up an empowered committee to renegotiate the price of 68 Boeings being bought for the state-run Air-India.

An in-principle agreement is in place to buy the planes, earlier estimated to cost around Rs 40,000 crore.

In the case of Indian Airlines, now renamed Indian, a similar empowered committee had negotiated the final prices with Airbus, reducing the amount to be paid and arranging for a barter deal for 30 per cent of the value of the contract.

Several MPs had written to the Prime Minister, pointing out that prices being negotiated were far higher than those charged from rival airlines by the same aircraft maker.

Air-India needs to buy 50 aircraft for itself and another 18 for its low-cost subsidiary, Air-India Express.

Civil aviation minister Praful Patel told reporters after a meeting of the cabinet committee on economic affairs that “we hope to complete the process at the earliest”.

The fleet acquisition plan, which was approved by Air-India earlier this year, seeks to buy eight Boeing 777-200s (long range), 15 B777-300s (extended range) and 27 B787s at an estimated cost of Rs 30,000 crore. Another 18 B737-800s will be bought for Rs 10,000 crore for the low-cost airline.

Petroleum board

The cabinet also cleared the petroleum and natural gas regulatory board bill that will allow the government to set up a petro-market regulator. The board is expected to ensure uninterrupted and adequate supply of petroleum products and natural gas across the country.

The redrafted bill provides for a common appellate tribunal for the electricity, petroleum and natural gas sectors.

The petroleum market regulator will administer downstream oil refining, natural gas and fuel marketing.

The statutory board will also look into issues like fair price, competition, common carrier access on non-discriminatory basis and protection of consumer interest and enforce service obligations for marketing firms and retail sellers.

The board will have a chairperson, four members and a secretary.

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