Government’s flagship Udan scheme reeks of favouritism

Prateek Goyal
Friday, 3 November 2017

Pune: The Ministry of Civil Aviation (MOCA) seems to have done an unjustified favour to two non-scheduled operators Air Deccan and Air Odisha under the Central government’s regional connectivity scheme (RCS), which is known as UDAN (Ude Desh ka Aam Naagrik), by allotting them a maximum number of routes across the country despite them not having signed the selected operator agreement with the MOCA.

Pune: The Ministry of Civil Aviation (MOCA) seems to have done an unjustified favour to two non-scheduled operators Air Deccan and Air Odisha under the Central government’s regional connectivity scheme (RCS), which is known as UDAN (Ude Desh ka Aam Naagrik), by allotting them a maximum number of routes across the country despite them not having signed the selected operator agreement with the MOCA.

According to an RTI reply given by the Airport Authrority of India (AAI) (dated October 18, 2017) accessed by Sakal Times, Air Deccan and Air Odisha have been allotted 34 and 50 flight routes, respectively, across the country operating from cities such as Delhi, Kolkata. Mumbai, Chennai, Ahmedabad, Pune, Bengaluru to the two and three-tier cities/towns such as Gwalior, Lucknow, Varanasi, Kanpur, Raipur, Shimla, Kullu, Agra, Shillong, Aurangabad, Jalgaon, Solapur, Jamshedpur and others. These two airlines have not signed the selected airline operator agreement with the AAI, the nodal agency for UDAN airports on behalf of the MOCA.

The routes were allotted to both operators in March but they have not signed the agreement yet. According to the ‘Letter of Award’ sent by the AAI to both the airlines, it was mandatory to sign the agreement as per the rules of NIP (Notice inviting proposal) of the MOCA as well as to pay the performance and additional performance guarantee (Bank Guarantee) within 15 days of the date of the allotment of routes (i.e. March 30, 2017). However, an official document of the AAI states that Air Deccan and Air Odisha have not signed any agreement yet with them. They have also not paid the guarantee amount of Rs 6,04,82,817 and Rs 9,77,85,296, respectively.

It is significant to note that the two airlines have been awarded maximum number of routes in the first bidding of RCS, which ended in March. The three other airlines, which were allotted routes under the RCS were SpiceJet, Alliance Air (Air-India) and Truejet, which have already started their operations on their allotted routes. But Air Deccan and Air Odisha are still not operational.

According to sources from the aviation ministry, both airlines have not even purchased or leased any aircraft yet. They initially planned to purchase an 18-seater M-28 aircraft of Sikorsky Company. However, both companies together are now planning to lease 10 Beechcraft 1900-D, also an 18-seater aircraft.

It is important to note that Air Odisha, a Bhubaneshwar-based operator, already has a controversial past. The CMD of the airline, Santosh Pani, was arrested in June 2016 for cheating the investors invested in his airline. Air Odisha, which then used to fly from Bhubneshwar to four regional destinations in Orissa, was grounded by the state government for cheating the investors of over Rs 4 crore.

Sakal Times made repeated attempts to contact Santosh Pani as well as the office of Air Odisha in Bhubhneshwar, but they refused to comment on the issue.

When questioned, Pradeep Kumar, General Manager, Regional Connectivity Scheme, Delhi, who also signed the letter of award to both the airlines, said, “The airlines don’t have to sign the agreement before they start operating the flights. Air Deccan and Air Odisha have sent us proposals, which have been accepted and routes have been allotted to them. We are not being partial to anybody.”

On being questioned why the airlines are not operating on the routes allotted to them, Kumar said, “These airlines are not getting slots at busy airports like Mumbai, Delhi, Kolkata and Chennai, where as many airports of their destination are not operational. But soon they will get slots and airports will be operational.”

However, it is significant to note that the same letter signed by Kumar states that under the terms of Notice Inviting Proposals, a selected airline has to submit the selected airline operator agreement (SAOA) as well as the guarantee amount within 15 days of the route allotment date.
A source from the MOCA said as per RCS, it was mandatory for all five airlines who were allotted routes to operate by the end of September. In case, they cross the deadline, their licences may be cancelled on the allotted routes.

When contacted regarding the issue, Capt Gopinath, the owner of Air Deccan, said, “Air Deccan has signed all necessary agreements 15 days ago with the Airports Authority Of India (AAI) for all routes that Air Deccan has won under UDAN, including the routes from Mumbai and Delhi. We have also given all bank guarantees. There was some delay due to the infrastructure-related problems with a few remote airports to be brought under air connectivity through the RCS initiative but the biggest road block were the privately managed airports of Mumbai and Delhi who were and are still working at cross purposes to the Prime Minister’s UDAN scheme to connect unconnected regional towns. They are refusing to give parking and landing slots to Air Deccan and Air Odisha for the routes. They have now grudgingly agreed to give two or three slots under pressure from the ministry officials.

Chennai-based Capt Mohan Rangnathan, an aviation expert and former member of Civil Aviation Safety Advisory Council, said, “Airlines have been flouting mandatory regulations regarding flights to northeast India and small cities/ towns,, the government never took action. If you have connections, you can get away scot free. Indian Aviation is corrupt and this is another example of rules being flouted and largesse dished out by the MOCA.”

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