The Economic Times
12,248.2567.9
Stock Analysis, IPO, Mutual Funds, Bonds & More

Govt may privatise Indira Gandhi Udan Academy soon

Indira Gandhi Rashtriya Udan Academy (IGRUA), the pilot training institute that was the brainchild of former Prime Minister Rajiv Gandhi, will soon be in private hands with the Modi government deciding to privatise it.

, ET Bureau|
Jan 14, 2020, 11.42 AM IST
0Comments
BCCL
Aeroplane-bccl

The institute is making losses averaging around Rs 6 crore annually, and the government does not see any merit in funding its losses.

Indira Gandhi Rashtriya Udan Academy (IGRUA), the pilot training institute that was the brainchild of former Prime Minister Rajiv Gandhi, will soon be in private hands with the Modi government deciding to privatise it.

“The view is that the government should not be in this business of running a pilot training institute and a decision has been taken to give it to private players for a period of 50 years,” said a senior government official on condition of anonymity.

A cabinet note on this is being prepared and will be sent for approval soon, the official added.

The move has the approval of the Prime Minister’s Office, people in the know said. The PMO’s view is that the government should “facilitate private companies to start pilot training institutes at airports and airstrips that are lying idle” instead of operating those, said one of them.

The institute is located at Amethi, the constituency that Rajiv Gandhi, a former Indian Airlines pilot, had represented in the Lok Sabha. His wife Sonia and son Rahul too had represented the constituency, which was considered to be a Gandhi family bastion, before BJP’s Smriti Irani won it in 2019.

The institute is making losses averaging around Rs 6 crore annually, and the government does not see any merit in funding its losses.

IGRUA, founded in 1985, is the largest pilot training institute in the country with over 150 students undergoing training at present and a fleet of 24 planes. Other institutes in India average around twothree planes.

One of the key reasons for the institute to post losses is the aircraft, which are expensive to operate, a government official said. “The aircraft operate on aviation gas, which costs double of jet fuel, and is the biggest reason for the high cost of operations at IGRUA,” he added.

This person said replacing the engines on these planes would require about Rs 8-9 crore each, which the institute did not have and the government was not willing to lend.

Of the two dozen planes at the aviation training academy, about 19 are operating and the rest are on ground for maintenance. Of the 19, about nine are old (over 20 years) and need to be replaced immediately. The cost on this will be borne by the entity that wins the contract to run the institute, the official added.

Meanwhile, the aviation ministry is also internally working on the finances of the institute to wipe out its losses. “The idea is not to make profits from the institute but to reduce losses to zero by the next fiscal,” said another official, who also did not want to be named.
Comments
Add Your Comments
Commenting feature is disabled in your country/region.

Other useful Links


Copyright © 2020 Bennett, Coleman & Co. Ltd. All rights reserved. For reprint rights: Times Syndication Service