CAG RAPS AIR INDIA FOR RS.15 CRORE 'WASTEFUL' EXPENDITURE
Image : Outlook India
New Delhi,India : Air India today came in for severe criticism from CAG for "wasteful expenditure" of over Rs.15 crore on several counts, including its failure to surrender leased premises at London Heathrow airport which remained unused for nine years.
The airline had leased a 0.58 acre plot from the British Airport Authority (BAA) in 1968 for over 50 years till 2019 for use as a warehouse to handle its cargo at the airport.
The cargo handling was being done by Menzies Aviation Limited (MAL) since 1998, but due to poor working conditions at the warehouse, MAL started doing the job from its own facility in 2004, the Comptroller and Auditor General (CAG) said in its report tabled in Parliament today.
MAL also agreed to refurbish the warehouse at its own cost and pay minimum royalty of 30,000 pounds or 0.24 crore per annum, besides paying half of the electricity, water and heating costs, it said, adding that MAL did not pay 45,000 pounds (Rs 0.35 crore) worth of royalty.
Subsequently, MAL's regulated status was withdrawn by UK's Department of Transport owing to security lapses and it could not use the warehouse for cargo handling, CAG said.
However, "despite receiving an offer from BAA in 2003 for early termination of lease at a market value of 3.35 million pounds (Rs 26.23 crore), the Company (Air India) inexplicably preferred to hold the asset idle over the years," it said.
04/09/2012 : PTI / Business Standard.
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