India's Enforcement Directorate (ED), the federal law enforcement agency will summon ministers from the former government over a deal with Airbus on behalf of Air India (AI, Delhi International), CNN News 18 has reported.
The ED alleges that forty-three Airbus jets for the flag carrier were purchased at inflated prices. In addition, the European manufacturer never opened a maintenance, repair, and overhaul (MRO) facility in India despite a contractural obligation to do so. As a result, Airbus allegedly pocketed USD175 million in undue gains.
It is unclear how many and which ministers will be summoned for questioning.
The investigation relates to the time when leftist coalition UPA ruled India between 2004 and 2009.
Hindi-language newspaper Amar Ujala further reported that the larger investigation covers a purchase of 111 aircraft for Air India and Indian Airlines (Delhi International), which merged in 2011. In total, the state-owned carriers spent INR700 billion rupees (USD9.7 billion) on the new equipment.
Separately, Air India is still struggling to secure much-needed funding. The carrier is currently trying to solicit commercial short-term loans from banks totalling INR5 billion rupees (USD70 million), using its remaining sovereign guarantees for 2018. The government guaranteed INR20 billion rupees (USD280 million) worth of loans for the carrier in the current year, but Air India already used three quarters of the guarantees for a loan from Bank of Baroda in August 2018.
Air India said that if it fails to secure the INR5 billion rupee loan, it would turn to the government for another bailout to the same tune.
The carrier's debt currently stands at INR550 billion rupees (USD7.6 billion).
