Reportage

Tailspin

By PRAVEEN DONTHI | 1 December 2011

I

AT AROUND NOON on 28 July 2007, Air India’s newest plane descended from the silver cotton clouds of a pale monsoon sky, escorted by a pair of Indian Air Force fighter jets. In the Technical Area at Delhi’s Indira Gandhi International Airport, where dignitaries usually gather to greet visiting heads of state, the roar from the engines of the Boeing 777-200LR was met with euphoria by the assembled VIPs, including Prime Minister Manmohan Singh. “I take pride in the fact that our government has taken steps to bring to an end a long period of neglect of our national carriers,” Singh announced proudly. “I compliment my colleague Shri Praful Patel and the present leadership of Air India and Indian Airlines for their important forward looking and innovative role.” For Patel, the minister of state for civil aviation, it was a moment of triumph, and he stood beaming in a pearl-white kurta-pyjama, feeling every bit like the tallest man on the dais.

Designed for long-haul intercontinental travel, the Boeing 777-200LR is an imposing sight, 209 feet long and 212 feet from wingtip to wingtip. The arrival of this particular aircraft, which had flown nonstop to Delhi from the Boeing plant in Seattle, was rich with symbolic significance for Patel’s tenure, reflecting two of his major initiatives for Air India. It was among the first of the Boeing jetliners that had been ordered under Patel, part of an enormous purchase of 111 aircraft placed in 2005 at a total cost of `450 billion. It was also sporting the brand new logo and livery designed to reflect the planned merger of Air India and Indian (formerly Indian Airlines), which had been initiated by Patel in 2006 and cleared by the cabinet in March 2007: a red flying swan morphed from Air India’s “Centaur” logo, incorporating the stylised Konark Temple Sun Chakra of Indian. Within a few days, the 777 would be flying nonstop routes to the United States, making Air India the first domestic operator to do so—another one of Patel’s priorities for the national carrier.

Flanked by his party colleague Sharad Pawar—the chief of the Nationalist Congress Party (NCP) and the minister for agriculture—and the deputy chairman of the Planning Commission, Montek Singh Ahluwalia, Patel used his speech at the ceremony to ask the prime minister to support another large aircraft purchase. “If we have to look ahead for growth, we will have to revisit the entire fleet requirement. I will urge the government and the prime minister to look into this aspect,” Patel said, exuding the confidence of a man who saw himself as a reformer of the skies—who opened up India’s cosseted aviation sector 15 years after Manmohan Singh had done the same for the Indian economy. He announced that he would soon submit a request to buy another 60 planes—for about `280 billion—and declared that the aviation sector would create two million new jobs in the next decade.

In 2007, Air India was celebrating its 75th anniversary, and the arrival of new aircraft was cause for further celebration—the first upgrade of the airline’s antique fleet in more than a decade. The only damper on the festivities was the absence of the eight unions representing the employees of Indian, who boycotted the ceremony to protest the decision to merge with Air India. But Patel, always adept in his dealings with the media, waved the issue aside with a blanket assurance that “the interest of the employees” would be protected. He liked to think of himself as a real doer—a quick and efficient man of action, a sharp and successful businessman in his own right—and he had unquestionably shaken up the national carriers and the aviation sector in a few short years on the job. In his own speech, the prime minister lavished praise on Patel’s achievements: “The aviation environment in our country has recorded a sea change over the last three to four years and I complement my colleague Praful Patel for this contribution to this happy outcome.”

THE SENSE OF JUBILIATION would prove to be short-lived. By 2009, Air India had plunged into a dire financial crisis, caused in large part by the two initiatives celebrated on that July afternoon: the oversized purchase of new aircraft and the merger of the two national carriers. The company formed by the merger of Air India and Indian, NACIL (National Aviation Company of India Limited), had posted losses of `22 billion in 2008 and `55 billion in 2009, along with a debt burden of `160 billion. Staff salaries for June 2009 had been delayed, and the airline’s chairman and managing director (CMD), Arvind Jadhav, requested in August 2009 that senior officials forgo their salaries while the airline sought government aid.

Various employees’ unions had begun to write angry letters to the prime minister, pointing the finger at the aviation ministry for the calamitous state of Air India. In a letter dated 13 July 2009, the All-India Airlines Retired Personnel Association accused Patel of having “single-handedly and systematically stripped the two national carriers—AI and IA—and brought them to brink of bankruptcy by a series of well planned out maneuvers, which we have only now been able to comprehend and unravel. All along, all these actions have been cloaked under the garb of unleashing India’s civil aviation potential, even as they struck at the very root of AI’s and IA’s existence.” That same month, the government formed the first of what would be many such committees, this one headed by the Cabinet secretary, to devise a plan for restructuring the airline within 30 days.

In his August 2009 Independence Day address from the ramparts of the Red Fort, on a day when history and symbolism fly high along with the tricolour, Singh attempted to assure the country that the government would not abandon the flag carrier it had nationalised in 1953. “We are giving careful attention to the problems of Air India and will resolve them soon,” he said. Patel, for his part, remained unfazed. When journalists contacted him seeking a reaction to Singh’s Independence Day speech, his response was calm and detached, as would remain the case for the duration of his tenure at the aviation ministry: “I am happy that Air India has found mention in the prime minister’s Independence Day address, which shows the priority being accorded to Air India by the government.”

A month earlier, Patel had been cornered in the Rajya Sabha by a battery of non-Congress parliamentarians, who used the time allotted for “calling attention” to launch a series of allegations against the ministry: that the merger had been misguided, mismanaged and not approved by Parliament; that the 2005 aircraft purchase order had been conducted hastily and without due diligence; that the airlines—which had both posted profits in 2003, 2004 and 2005—had begun making enormous losses even before the onset of the global recession; that private domestic and international carriers had received preferential treatment from the ministry; and, most damning, that “middlemen” and corruption had influenced the making of aviation policy.

Amid the welter of what he called “insinuations flying here and there”, Patel emerged more or less unscathed. He calmly ignored some of the more fervid accusations, and concentrated on what has since become a well-worn narrative to explain the airline’s declining fortunes: the government had rightly “liberalised the aviation sector keeping in view the rapid increase in the demand for both domestic and international air services”. The advent of increased competition, Patel argued, had naturally diminished the market share of the national carriers; the decision to upgrade the fleet was long overdue, and necessary to meet the challenges of increased competition. The global economic downturn, he said, had damaged the fortunes of airlines around the world, and Air India was no exception. The massive order of planes had been necessary (“how can you operate an airline with older aircraft which are 15 or 20 years old”) and based on projections made by the management of Air India and Indian Airlines. (“There is a well laid down process in government for acquisition. It does not happen overnight just because a few people in Air India decided it, or, a file came to the minister and he was in a rush to buy aircraft.”) The same was true of the merger: “A world-class consultant was appointed,” Patel said, “and presentations were made to the management as well as to the ministry.” Besides, Patel suggested, there was no evidence that the airlines would have fared better unmerged: “Do you mean to say that a stand-alone Indian Airlines or a stand-alone Air India would have been able to compete in the global air space?”

This brief dust-up in the Rajya Sabha would not be the last time that Praful Patel faced criticism over his tenure as aviation minister and confronted accusations that he had failed to protect—or even harmed—the national carrier. His defence would remain much the same, buttressed by the undeniable reality that competition had benefited the consumer (according to government figures, domestic passenger traffic rose from 11 million in 2003 to 51 million in 2010), and the unquestioned implication that the very same competition would inevitably reveal the weakness of the aging state-owned airlines. As he put it in the Rajya Sabha: “If every issue of connectivity or people’s aspiration cannot be met only by the national carrier, this role will have to be performed by others also. This is a fundamental decision taken by the government. Everybody has accepted it since 1993 onwards. This is the process of liberalisation.”

As Patel surely knew, in the new India, eager to shed its socialist past, the proverbial inefficiency of a public-sector enterprise was a reliable running joke, sure to keep the country in good humour. Apart from the employees’ unions and a handful of politicians eager to score points against the ruling coalition, there was precious little sympathy for Air India; the link between the modernisation of the economy and the erosion of traditional loyalties is not a faint one. As Patel himself had observed during the Rajya Sabha debate, Air India and Indian Airlines had always made money for the government rather than taking money from it, but with the losses mounting higher and higher, pundits and television anchors began to ask why the government was still in the aviation business. The former Hindustan Times editor Vir Sanghvi posed this very question to Patel on CNBC in April 2010: “Why don’t you just privatise it?” Referring to himself in the third person, as he often does, Patel laughed and replied: “You lived long enough in Delhi and you know Praful Patel alone can’t take that decision.”

II

AFTER THE 2004 GENERAL ELECTIONS, Patel was named minister of state for civil aviation—one of three ministers from the NCP, then the fourth-largest member of the ruling United Progressive Alliance (UPA) coalition. He took to the ministry like a fish to water: confident, comfortable and knowledgeable from day one, unlike some of his predecessors at Rajiv Gandhi Bhawan. The NCP had lobbied to place Patel atop the aviation ministry, and he knew he’d landed the portfolio before the cabinet was announced. “He had even told the media before it was official,” a former aviation ministry official told me.

“I have seen this sector from close enough,” Patel told the Business Standard in an interview two weeks into his tenure. “Besides, my business and corporate background help me understand what the private sector wants. These will be my assets here.” Patel was undoubtedly familiar with the aviation sector: he had served on almost every Parliamentary Consultative Committee on Civil Aviation for the past 16 years. At a press conference on 2 June, eight days after arriving at the ministry, he announced a raft of initiatives, including the launch of a low-cost subsidiary of Air India, the leasing of new aircraft and the creation of a new civil aviation policy by the end of the year. Noting that India had only 150 civil aircraft—compared to 650 in China—he declared, “We need to expand and quickly.” The Air India and Indian Airlines boards had each already approved proposals for a long-delayed aircraft purchase, but Patel indicated that he planned to take “another look” at the acquisition plans. “I will talk to them and if their decisions are right, let them go ahead with their proposals,” he said. “My main aim is to strengthen both the airlines.” He looked every bit like a man in a hurry.

Air India and Indian Airlines were certainly in need of new planes: the last major purchase had been made under Rajiv Gandhi in 1986—the notorious $952 million “Airbus 320 deal”, which blew up into a scandal in 1990 after it was alleged that the PM and aviation ministry had pressured the Indian Airlines board to cancel an agreement to purchase 12 jetliners from Boeing, for which an advance had already been paid, in favour of Airbus. The Central Bureau of Investigation (CBI) pursued the case for more than a decade, alleging that kickbacks, commissions or bribes had tilted the deal, but no convictions have been secured. The fear of a similar scandal had given successive governments cold feet when it came to upgrading the fleet, as Patel was well aware: A Mumbai-based senior Air India official told me that during Patel’s time on the Parliamentary Consultative Committee, he had jokingly told the previous two aviation ministers to stop being so scared of the CBI and place aircraft orders. When it was his turn to pull the trigger, he leapt at the chance.

The acquisition plans that Patel wanted to have “another look” at had been underway for several years. In November 2003, the Air India board had approved a proposal to purchase 28 planes (10 medium-capacity long-range aircraft from Airbus and 18 small-capacity short-range aircraft from Boeing), which had been sent to the Ministry of Civil Aviation for approval in January 2004. The Indian Airlines proposal, for 43 aircraft, was at an even more advanced stage: it had been approved by the IA board in March 2002 and passed by two pre-Public Investment Board (PIB) meetings.

In spite of Patel’s later assurances that the acquisition plans had been driven by the managements of the airlines on the basis of their own projections, the twists and turns in the revision of the purchase deal tell a more complicated story.

On 3 March 2004, two months before the general elections, the ministry sent a note to the Prime Minister’s Office (PMO) conveying the decision of the Air India board to purchase 10 long-range A340-300 aircraft from Airbus, indicating that a larger order of long-range planes would not be economically viable. But by 29 June—a little less than two months after the UPA government triumphantly took office and Patel arrived at the aviation ministry—the outgoing aviation secretary, K Roy Paul, submitted another note to the PMO, explaining that “important developments” would require Air India to reconsider its Airbus purchase: namely increased competition on direct routes to North America and the A340-300 going out of production in the near future. (In fact, the aircraft would be produced in large numbers for seven more years.) According to the note, Patel himself had “impressed upon AIL [Air India Limited] in a meeting at Mumbai to examine the feasibility of direct India-US / Canada flights”.

After announcing in early June that he would like “another look” at the fleet acquisition plan in light of “the changed global scenario”, Patel now wanted both Air India and Indian Airlines to revise their plans, according to accounts provided by two former high-ranking aviation ministry officials.

The Indian Airlines board, which was awaiting clearance from the PIB, insisted on retaining their existing proposal.

On 2 August 2004, Patel chaired a meeting with three secretaries from the ministry and two top Air India officials to discuss the revision of the acquisition proposal. According to the minutes, the CMD of Air India, V Thulasidas, was of the view that any “additional requirement” for aircraft beyond the existing proposal “could be projected separately through a supplementary proposal after due evaluation”. In the end, however, it was decided that Air India “should revisit the proposal for purchase of aircraft and submit a fresh product proposal to the government”. Thulasidas, according to a former senior ministry official, was “more than willing to please the minister” by agreeing to revise the aircraft order.

By the time the Air India board next convened on 13 September 2004, according to a note from Thulasidas to the ministry, the board members decided that “in view of the Ministry of Civil Aviation’s advice, the fleet acquisition programme needed to be revisited in its entirety.” Two months later, the Air India board approved a revised plan to purchase 50 aircraft for AI, in addition to the existing proposal of 18 aircraft for Air India Express.

According to the former senior ministry official, the only objection came from V Subramanian, then an additional secretary and financial adviser to the ministry, as well as a member of the Air India and Indian Airlines boards, who protested that no business plan had been presented to justify increasing the size of the order. His objections were not recorded in the minutes of the meeting, and he was soon removed from his post and transferred to the rural development ministry.

After I contacted Subramanian several times, he reluctantly agreed to meet me at his personal office in Delhi. He’s a mild-mannered and soft-spoken man, and when I asked him to relate the details of his departure, his face betrayed no more than a hint of anguish, and that only for a moment. “I opposed the plan to revisit the proposal and increase the order,” he said. “They never recorded any of my objections and I got a letter from PMO in four days shunting me out.”

“It was pushed through without any business plan,” he continued calmly. “Which destinations will you go to? What are the rights available? Is there survey done on load factors? They had no answers for these questions. Even if you decide to run a bus between Dwarka and Old Delhi you will see the number of passengers and the frequencies.”

When I prodded Subramanian for more information, however, he declined to offer any further comments. “It’s not a personal battle,” he said. “I am just a civil servant. I am retired now, and Air India today is only of an academic interest to me.”

The other parties to the making of the airplane deal have declined to speak publicly about the decision to revise the size of the order—or the subsequent and equally controversial decision to give the entire purchase order to Boeing. “The original order was 10 Airbus aircraft for AI and 18 Boeing for AI Express,” a former senior airline official told me. “The 10 [for Air India] was increased to 50, but it was all given to Boeing.”

“Airbus felt cheated,” the former senior official continued. “But Dinesh Keskar of Boeing was a very happy man.” The August 2011 issue of Cruising Heights, an aviation magazine, carried a story on Air India by an anonymous civil servant, who claimed the terms of the deal had indeed been altered to benefit a specific manufacturer: “I know well the manner in which the business plans were modified to suit the purchase orders (number, type, manufacturer, etc) that were pre-decided. The board was reduced to being a hand maiden of the minister in the recent past.”

According to the former senior airline official, the specifications for seats and configuration were changed “at the last minute” to favour Boeing, which led to an outraged response from Airbus. After the Air India board decided to place its order with Boeing on 26 April 2005, Airbus executives demanded an investigation, pointing to the revised seat configuration and the fact that the purchase order included 27 Boeing 787 Dreamliner aircraft, which had not yet entered production. Some of the objections raised by Airbus were apparently echoed inside the airline: according to the former official, an Air India board member, Sunil Arora, dispatched a “damning” letter in May 2005 to the Cabinet secretary, alleging multiple irregularities in the process of revising the airplane order and awarding the contract to Boeing, citing the shift in seat configuration and the expected delay in delivery of the 787s. “That haunted Arora for a long time,” the senior official told me. “The government put serious pressure on him, which may be why he now refuses to talk.”

Arora did not respond to several requests for an interview, but his name surfaced repeatedly in discussion with other former ministry officials—perhaps because his clash with Patel became very public in 2010, when Arora’s voice featured in several leaked conversations with the publicist-lobbyist Niira Radia. One former official described Arora as “on a collision course with Patel”, and the taped conversations confirm that impression: on one call, Arora describes the above-mentioned “damning” letter (suggesting that he can provide it to Radia for the benefit of Ratan Tata, but only if he “destroys it after reading it”). In another conversation, Radia tells The Times of India editor Jaideep Bose that “they removed Sunil Arora ... because Sunil had actually exposed them and sent a huge dossier to the Cabinet secretary and the prime minister as to what had actually gone wrong in the airline deal.”

A Rajasthan cadre Indian Administrative Service officer on deputation to the Centre, Arora served as a joint secretary in the aviation ministry and CMD of Indian Airlines from 2002 until June 2005. He was removed from the aviation ministry and returned to Rajasthan, where he is principal secretary to the state government. A former Indian Airlines board member described Arora as “like an autocrat. He ruled the airlines the way he wanted. One man management. Hardworking, tough taskmaster and arrogant. He could never take a team along with him.” Arora was credited with engineering a turnaround at Indian Airlines during his tenure as CMD, reversing losses and posting a profit in 2004 and 2005. It is said in aviation circles that he still hopes to become managing director of Air India, but the former senior ministry official told me that was unlikely—not least because of his efforts, documented on the Radia tapes, to pass information to the government about problems inside Air India.

“He understands aviation inside out but is sitting on a lot of damaging information against Patel,” the former senior ministry official said. “Forget about making him the CMD—he is not even being considered, though he is empaneled for an additional secretary post at the Centre. Not just Patel but TKA Nair [the adviser to the prime minister] is also his enemy. The government is scared of him.”

AFTER THESE FUTILE OBJECTIONS that had been raised, the deal raced forward at a speed that defied all known norms of government inertia—a fact that has attracted criticism from several bodies investigating the deal in the wake of Air India’s financial collapse. A 2009 report from the Parliamentary Standing Committee on Transport, Tourism and Culture concluded that “the entire aircraft acquisition programme lacked the required transparency. Reasons for going ahead with huge purchases by the Ministry of Civil Aviation despite Air India and Indian Airlines not having the capacity to support it, remains unknown to the committee.” A more recent performance audit, conducted by the Comptroller and Auditor General (CAG) and released in September 2011, devotes considerable attention to the lightning pace at which decisions were taken. After moving to revisit the initial purchase proposal in August 2004, it took only four months for the Air India board and the ministry to agree to the revised fleet plan stipulating a purchase of 50 rather than 10 aircraft for Air India. From that point onward, things moved even faster: as the CAG report notes, “From the approval for the constitution of EGoM (Empowered Group of Ministers) by the CCEA (Cabinet Committee on Economic Affairs), for final round of negotiation with lowest bidder, to the signing of purchase agreement, it just took 16 days.”

In the space of one day—30 December 2005, when the deal was signed—all of the following steps were completed: the prime minister saw the note on the final acquisition proposal from the EGoM, headed by Finance Minister P Chidambaram, and granted his approval; the PMO forwarded the note, with his approval, to the aviation ministry; the ministry conveyed the government’s approval to Air India; and Air India signed the purchase agreements with Boeing.

When I met Ajay Prasad, then the secretary for civil aviation, he had a simple and disarming explanation for the astonishing speed with which the deal had sailed through a series of committees and ministers: “Everybody in the government agreed that the fleet needs to be modernised.” The recent CAG report, however, pointed to concerns raised by the Planning Commission and the Department of Expenditure: the former noted that the optimistic projections of future traffic and increased market share that had been used to justify the larger order appeared to be “risky”; the latter questioned the assumption that “increased capacity” (more planes, in other words) could automatically lead to higher market share in the absence of a massive increase in consumer demand. These objections were presented at a pre-Public Investment Board (PIB) meeting in August 2005, but not considered—citing “shortage of time”—and the deal passed the PIB in October. The ministry had already signaled it was in a hurry by convening a Price Negotiation Committee to discuss terms with Boeing—and an Overseeing Committee to guide and supervise the negotiations—months before the PIB had actually approved the purchase.

In the face of recent scrutiny, Patel has sought to downplay the ministry’s role in accelerating or influencing the acquisition process, but several former ministry officials pointed to Prasad’s critical role maneuvering the deal through the bureaucracy. When I asked Prasad about the concerns raised by the Planning Commission and the Department of Expenditure over the inflated traffic projections used to justify the purchase, he pointed the finger back at Air India: “After all, what is PIB and all supposed to do? Airline made its assumptions and said it’s economically viable. All those assumptions couldn’t be real. Many of them are management issues really.”

Patel had taken a similar line in his interactions with journalists, opposition politicians and parliamentary committees seeking to assign blame for the perilous state of Air India. In the wake of the September 2011 CAG report, he pointed to the participation of other government bodies in the decision process, telling one news channel: “What are the other agencies doing? Why is onus being put only on the minister of civil aviation?” In other interviews, he explained that he had merely executed a policy set by the cabinet, telling one reporter, “Whatever the government did in its wisdom was to make the airline commercially viable. We had to decide immediately as to whether new planes should be bought, otherwise the airline would have closed down.”

That the purchase of far too many new aircraft might also close down the airline seems not to have raised any alarm: as an editor at the Business Standard put it while interviewing Patel in 2009, “It seems bizarre that a business with a top line of `16,000 crore [`160 billion] should go in for capex of `40,000 crore to buy planes.... On the surface, it would look like a recipe for disaster.” In that same interview, Patel presented his best, most honest and most reliable answer to all such complaints: “I have been saying since 2004 that the airline should be sold, but I have been asked to keep it going.”

For the businessman-minister and many of his defenders, the notion that a state-run airline must inevitably fail was a trump card, an impregnable ideological defence to any allegations of mismanagement or neglect. Though the UPA coalition was headed by an economist who had cut India loose from its ostensibly socialist past, the government he led had decided to retain Air India as a public-sector enterprise, reversing the previous administration’s attempts to sell it off. The airline seemed like a hopeless relic from the past, an idea that had overstayed its welcome. Nobody had a clue what to do with Air India, and Praful Patel was well aware of that fact.

III

IN AN INTERVIEW in April 2004, during the course of a losing race for the Lok Sabha in his constituency of Bhandara, Maharashtra, Patel described himself to a reporter from The Telegraph as “100 percent businessman and 100 percent politician”. Though he’s retired this particular formulation—in November he told me, “I am a politician now, that’s it”—his background in business is inseparable from his political identity. Patel’s detractors see his success in the private sector, and his immense wealth, as a shorthand to denounce him; the minister himself likes to flaunt his accomplishments outside of politics, brandishing his success as a certificate of character and a demonstration of his talents. Either way, it seems safe to say that with Patel, it is difficult to say where business ends and politics begins—the two are intertwined in his character like DNA.

Praful Patel was born in 1957, the only child of Manoharbhai Patel, a Gujarati businessman-turned-Congress politician, and his third wife, Shantaben. The hagiographical accounts of Manoharbhai’s life (which are essentially the only accounts that exist) depict him as a philanthropist and a supporter of Gandhi. According to a brochure produced by the Gondia Education Society that Manoharbhai later founded, he left his home—a village in Gujarat called Nadiad—at age 12 to work as a manual labourer. By 1922, when he was 16, he had made his way to Gondia, situated on the Bombay-Howrah rail route about 170 km from Nagpur, where he took up a job with the Chhotabhai Jethabhai Patel Tobacco Products Company, a beedi manufacturer. He became a partner in the company in 1935, and by 1953, he was a figure of sufficient local prominence that he played host to the first president of independent India, Rajendra Prasad, when he passed through Gondia.

When I visited Praful Patel’s palatial home in Ram Nagar, Gondia, in October, a framed thank-you note to Manoharbhai from the military secretary to the president commemorating his 1953 visit was prominently displayed in a large glass trophy case on the ground floor. Neither Patel nor his wife was in Gondia, and a few of the servants graciously gave me a quick tour through the enormous and elegantly decorated house. Several large photographs of Manoharbhai—some also featuring his business partners—hang in one corridor; similar photographs are ubiquitous at schools and colleges run by the Gondia Education Society.

By the time of Praful’s birth in 1957, his father was one of the most successful businessmen in Maharashtra. Riding the support of Gondia’s large population of beedi workers, Manoharbhai was elected three times to the state assembly from Bhandara, located about 100 km east of Gondia, representing the Congress, and became a kind of kingmaker in Maharashtra politics and a dominant political figure in the all-important Vidharbha region.

Patel was sent off to study at the Campion School in Bombay, though he did not live in the student hostel: instead he stayed in a building on Marine Drive, along with the son of one of his father’s friends, Harish Jotwani, and had a cook and a driver to take him around. I met Jotwani, who is 17 years older than Patel, and now a lawyer in Gondia, at his office; he recalled that Patel’s mother visited him often in Bombay, that the young Praful loved to watch films (which may explain his fondness today for the company of filmstars), and that he was “naughty” but popular in the building where they lived. “He had everything,” Jotwani said. “His father was a powerful man, but he was not like any other Gujarati seth: he wanted Praful to study.” A year after Praful was born, Manoharbhai founded the Gondia Education Society, which now runs 40 schools and colleges scattered across the Gondia and Bhandara districts. I asked Jotwani if he saw any similarities between the son and his father, who died of a heart attack when Praful was only 13 years old. “Like his father, he knows how to placate and win over people who are upset,” Jotwani said. “But I never thought he would get into politics.

Patel has devoted himself to keeping his father’s memory and legacy alive: he accords a special place in his life for the families of his father’s friends, and throws a grand celebration to commemorate his father’s birthday every February. For the centenary of Manoharbhai’s birth in 2006, Patel summoned a number of his friends from Bollywood to perform in Gondia, where local crowds were delighted to find themselves watching Shahrukh Khan, Sanjay Dutt and Preity Zinta. In 2008, a local cricket tournament named in memory of Manoharbhai was graced with an appearance by MS Dhoni, Zaheer Khan and RP Singh—who had just played the first match of a one-day series against England in Rajkot, Gujarat. The cricket journalist Sharda Ugra wrote, scathingly, that the three “were frog-marched on a little detour” that involved a private flight from Rajkot to Gondia and a helicopter journey to Bhandara, where they “fooled around in the middle of the field” for “no more than half an hour” before departing again by helicopter to Gondia and catching another private plane to Indore for their next one-day match against England.

Patel was inducted into the family business at age 16, and married at 20, soon after he completed his commerce degree at Bombay’s Sydenham College. Harshabhai Patel, his father’s business partner, arranged Patel’s marriage to Varsha, originally from Anand in Gujarat. In the last few years, Patel’s wife has become politically active in Gondia, and now visits the area more often than he does. Earlier this year, she was appointed president of the Gondia Education Society, a move seen by local observers as a prelude to a probable run for office. In spite of his overwhelming visibility in the district, Patel lost two consecutive Lok Sabha races here, in 1999 and 2004, after winning three in a row in the 1990s. He returned to the Lok Sabha in 2009, but hasn’t quite managed to turn the constituency into a reliable pocket borough—although not for lack of effort.

Patel first contested Lok Sabha elections in 1984, at age 27, with the backing of Vasantdada Patil, the longtime Congress strongman in Maharashtra and the mentor to Patel’s mentor Sharad Pawar. After losing that race, he won municipal elections in Gondia, and served as mayor for seven years before entering the Lok Sabha for the first time in 1991. When Pawar split with the Congress in 1999 over the issue of Sonia Gandhi’s Italian birth, Patel followed, and Pawar nominated him to the Rajya Sabha and placed him in the aviation ministry in 2004.

LIKE A BIG CAT marking its territory to keep the other big cats away, Patel has managed to establish his presence all over the constituency; in addition to the schools and colleges run by the education society, he has worked to bring investment to the area using his business connections. The most prominent of these projects is the thermal power plant being built in Tiroda village by the Adani Group, whose chairman, Gautam Adani, is India’s sixth-richest man. When I visited Patel’s Gondia office, located in the Chhotabhai Jethabhai Patel Tobacco Products Company complex in Rail Toli, I noticed a memo tacked to the wall of the reception area, informing visitors that “Recommendation letters for Adani power project in Tiroda are not being given anymore.” In May 2008, Patel paid a visit to the Special Economic Zone run by the Adani Group at Mundra Port in Gujarat, amid reports the Adanis were seeking permission from the government to upgrade the 1,900-metre Mundra airstrip into India’s first private international airport.

The 2009 parliamentary elections were a crucial test for Patel, who was under pressure to demonstrate he could pull in voters. The Gondia-Bhandara area has long been a BJP stronghold, and the little-known BJP candidate, Shishupal Patle, bested him in 2004 without deploying much money or muscle. Patle belongs to the Powar community, which has about 250,000 voters in the constituency, whereas Patel is in the Gujarati-migrant minority. Local journalists in Gondia insist that Patel owes his 2009 victory to the assistance of a rebel Congress candidate who split the caste vote, as well as the relative silence of the most powerful local BJP leader, who declined to come to the district and campaign against Patel. His opponent, Patle, lodged a complaint with the Mumbai High Court accusing Patel of violating the election commission spending limits, claiming that his campaign had spent more than `4 million on hired buses, helicopters and advertisements, among other expenditures. Patle lost the case.

During my visit to Bhandara, I saw Patel appear at an NCP membership drive in the district, and his discomfort with the crowds was apparent. Flaunting his influence in the capital, he told the party workers, “Praful Patel will get his work done in Delhi anyhow. But you as members have to work for the party and empower yourselves.” It was easy to see why he is not a mass leader.

Shortly after becoming aviation minister, Patel moved a proposal to establish a National Flying Training Institute and airport on the site of a small airstrip built by the British in 1940 at Birsi, 16 km from Gondia. “It is not because Gondia is where I come from,” he explained to reporters after the project was approved. “It is in the centre of the country, has fair weather throughout the year. Plus, there’s a functional airstrip and the Maharashtra government is providing land for free.”

Workers at the airport, which is run by the Airports Authority of India, told me that Patel’s frequent visits used to provide most of the incoming traffic—hardly a surprise, given that this is a sparsely populated and mostly poor rural area—but his trips have apparently diminished since he left the aviation ministry. “The government did a lot to bring an airport here,” one sleepy employee told me. “But it’s tough to be in a remote area like this—it is a punishment posting for us.” On the road from Gondia to the airport, small houses in villages and fields sport advertisements from aviation schools, targeted at trainee pilots coming and going from the training complex. When I went to the airport, one of Patel’s employees travelling with us made a few phone calls to obtain permission, and the guards waved us through when we arrived in a jeep with the NCP symbol on the side. The airport was almost entirely silent but for the activity at the National Flying Training Institute next door. Here and there throughout the district, trainee pilots in tiny double-seater planes hovered in the skies above the sleepy villages—like hummingbirds reminding the people below they are part of Patel’s territory.

On another morning, I went to see Manoharbhai Patel Institute of Engineering and Technology (MIET), the showpiece of Patel’s education society. The college has two entry gates: one opens only when VIPs come visiting, which happens with surprising frequency. A statue of a smiling Manoharbhai Patel, in dhoti and kurta with a walking stick in his hand, welcomes visitors. There was something extremely orderly about the campus—almost a designer touch to the finely manicured lawns and pebbled pathways. Professor Devendra Pandey, who has been working at the college since its inception in 1984, showed me around the grounds, pointing with pride to various amenities, like the “CCTV with nightvision cameras” installed on the campus. After Pandey told me that his job interview at the college was conducted by Patel, I asked Pandey if the cabinet minister still had time for such intimate involvement. “His interest is only increasing by the day,” Pandey said. “You see this pebbled road?” he asked, pointing to the track we were walking on. “It was his idea.”

In Patel’s absence, however, the everyday affairs of the college, and much else in Gondia, are supervised by Rajendra Jain—known to all as Raju bhai. Jain is Patel’s trusted lieutenant, and the caretaker of his business and political interests in Gondia, a dual role that seems to be a natural fit for someone working for Patel. (Jain also represents Gondia in the Maharashtra Legislative Council.) “When the college lawns were being prepared,” Pandey said of Jain, “he used to stay here day and night—he even drove the tractor.” Pandey listed for me some of the celebrities and VIPs who have visited the college; the photo gallery on the school’s website, packed with politicians, filmstars and cricketers, resembles the guest list to a particularly exclusive party: Pratibha Patil, Farooq Abdullah, Murli Deora, Lalu Yadav, Kamal Nath, Najma Heptullah, Vijay Mallya, MS Dhoni, Zaheer Khan, Yusuf Pathan, Salman Khan, Jagjit Singh, Mahima Choudhury, Celina Jaitley, Dia Mirza and on and on.

At the end of our tour, Pandey gave me two pamphlets of the college. The first was an older prospectus, printed in black and white, and listed a bevy of Gujarati names on boards and committees; Patel is described inside as a member of parliament. In the newer pamphlet, in glossy colour against a gold background, Praful Patel signs off as “Minister for Civil Aviation, Govt. of India”—and the board of directors has become a veritable who’s who of corporate titans: Mukesh Ambani of Reliance, Rajya Sahba MP Rajiv Chandrasekhar, Venugopal Dhoot of Videocon, Uday Kotak of Kotak Mahindra. Among the names listed are the two biggest private players in the Indian aviation sector: Naresh Goyal, the chairman of Jet Airways, and Vijay Mallya, of Kingfisher Airlines.

IV

FEW THINGS HAVE INFURIATED PATEL'S CRITICS more than his friendly relationships with Naresh Goyal and Vijay Mallya. Among union members—air crew and workers alike—and Air India loyalists, the idea that Patel “killed” the airline to benefit Jet Airways, Kingfisher and other private carriers is an article of faith. A few days after I started interviewing Air India employees for this story, one of them sent me a forwarded joke email that had evidently made the rounds among the airline unions, containing a photograph of Patel and Mallya shaking hands, with comic strip-style speech bubbles above each man’s head: “I have done the job... Air India is dead,” Patel says, to which Mallya replies “The money will be delivered to your house.”

To say that the substance of these allegations remains unproven would be an understatement, and Patel has easily brushed them aside. The sight of Goyal and Mallya at the 2008 wedding of Patel’s daughter, or pictures from any of the other high-powered VIP soirees at which the three men tend to appear, may boil the blood of angry Air India employees, but it’s hardly incriminating stuff. (Patel’s sharp response to a question on this matter in 2005 from India Today was “Is it a crime to know people?”)

More broadly, Patel has defended himself against accusations of favoritism toward the private sector in political terms: saying that “I am also the Minister for Civil Aviation, not just the Minister for Air India”, and pointing to the undeniable growth in the aviation sector that followed the “opening” of the skies. But behind the easy rhetoric about liberalisation lays a more complicated reality: even the “open skies” are invariably subject to considerable government intervention. This is particularly true when it comes to the negotiation of air traffic rights between Indian and foreign airlines.

The management of these arrangements—known as “Air Service Agreements” or “bilaterals”—has been among the more controversial elements of Patel’s tenure, and the process by which rights were granted to foreign and domestic carriers has come under severe criticism from multiple official inquiries, with particular attention to the sizable increase in capacity granted to foreign airlines to operate in India without securing reciprocal terms. The 2011 CAG report notes that “foreign airlines derived disproportionate economic advantage out of the traffic rights” negotiated in these agreements.

By 2010, Emirates, Dubai’s state-owned carrier, was operating 185 international flights into and out of India each week, more than any Indian airline—reflecting what the CAG report calls “the one-sided nature of benefits to Emirates/Dubai” in negotiations between Dubai and Indian aviation authorities, even after there had been “repeated protestations of Air India on the lack of reciprocity”. The CAG report highlights a sequence of negotiations between May 2007 and March 2010 in which the ministry approved additional rights for Emirates in India in spite of Dubai’s failure to agree to requested reciprocal arrangements for Air India, concluding that “while the Dubai CAA [Civil Aviation Authority] actively protected the commercial interests of its airlines, MoCA [Ministry of Civil Aviation] failed to obtain appropriate quid pro quo.” A senior official at the  Directorate General of Civil Aviation (DGCA), which monitors bilateral agreements, told me with a smirk that “they say Emirates is India’s national carrier these days.”

In the short run, the expansion of bilateral capacity provided collateral benefits to Indian private carriers with international services—Jet and Kingfisher, in other words—who were able to take up the granted increases in capacity that were not being utilised by Air India. But in February 2011, Jet and Kingfisher joined with Air India to protest the expansion of capacity entitlements; representatives of the three airlines argued in a joint position paper that the domestic aviation industry had been damaged by the ministry’s bilateral policies and that “entitlements should be rolled back” or restricted from further expansion.

In her leaked phone conversation with Jaideep Bose of the Times of India, from July 2009, Niira Radia accused Patel of having profited personally from the expansion in capacity:

 

Radia:
He’s destroyed it. He sold those bilaterals for 28 dollars a seat to Emirates...

Bose:
I’ve heard 3,500 dollars. How much have you heard?

Radia:
No, no. You know, whenever you do a bilateral, you know, how the kickbacks are done, is that you pay per seat.

Bose:
Yeah, per seat, I heard 3,500 dollars per seat.

Radia:
No, no, no, no. Actual rate is about 25 dollars per seat. Seven to 28 dollars, so they did the deal with um, who’s this guy in Delhi, he’s one of his henchmen in Delhi who did that deal.

Bose:
Ramesh Nambiar.

Radia:
Yeah. And also Deepak Talwar was involved in that... He did the Emirates deal. And these guys raked in about three to four hundred million dollars in bilaterals. And that’s only on Gulf flights.

 

Radia is referring to Deepak Talwar, a successful lobbyist and tobacco consultant whose clients have included Coca-Cola, McDonald’s and General Motors—and who was, according to the All India Airlines Retired Personnel Association, the general sales agent in India for the Sharjah-based low-cost carrier Air Arabia, whose entry into Air India Express’s lucrative South India-Gulf route, ratified by the Ministry of Civil Aviation, critically ate into AIE’s earnings.

Talwar, who has described himself as a good friend of Patel, runs a consulting firm whose website boasts of having “pioneered the entry of some of the world’s largest corporations into the country and assisted many in enhancing their business in India.” Many of the letters written by Air India employees’ unions to the PM include accusations against Talwar, to the effect that airlines he represented received preferential allotment in access to routes. The senior official I interviewed at the DGCA said that Talwar had been so effective in securing bilateral entitlements, “it was like he had an office running out of the aviation ministry.” Talwar is also a partner in the joint venture firm that won a bid in August 2010 to operate duty-free stores at Delhi airport, a contract that has since come under scrutiny from the CAG.

Patel, for his part, called Radia “an economic terrorist”, who had “vested interests and a personal agenda”. This much is undoubtedly true: Radia had served as a consultant and lobbyist for various aviation companies, including Singapore Airlines and Sahara as well as manufacturers like Airbus. She had twice attempted unsuccessfully to launch an airline in India, and close relations with Tata and Singapore Airlines, who had tried and failed to enter the Indian aviation sector together. After Tata and Singapore floated a proposal for a new domestic airline in 1995, the civil aviation policy was changed in 1997 to disallow foreign carriers to own stakes in Indian airlines, a decision that was widely believed to have been influenced by Naresh Goyal—who had to buy back the 40 percent of Jet then owned by Gulf Air and Kuwait Airlines to protect Jet against new competition from Tata and Singapore.

Goyal has long been renowned for his success in what lobbyists euphemistically call “government relations”. Captain GR Gopinath, who launched India’s first low-cost airline, Air Deccan, paid a kind of backhanded tribute to Goyal’s success under Praful Patel in an October 2011 Indian Express article, writing that Goyal had “built a robust international network and secured good international routes that are controlled by the government in bilateral agreements.” In July 2004, Jet acquired landing rights at Heathrow Airport in London, though Indian domestic carriers were not then permitted to operate outside of ASEAN countries. By November 2004, Patel had cleared one section of an existing draft aviation policy, the Naresh Chandra Committee report—concerning the right of Indian carriers to operation internationally—and Jet was flying to London by January 2005. Dinesh Trivedi, who is now Union Railways Minister but was then an MP, sent a letter of complaint to the prime minister. “I said it should be called the Naresh Goyal report,” Trivedi told me recently.

The change in policy also allowed Indian Airlines to bid on routes to Europe, but the former senior airline official told me that Patel had attempted to interfere in the process. “Just before the bidding was to take place,” the official said, “Patel called up Sunil Arora [then CMD of Indian Airlines] and told him not to apply for London but only to places like Birmingham and Manchester. As the conversation was going on, Arora put the phone on loud speaker. There were other senior colleagues sitting in the room.”

“Arora wrote an official letter explaining that ‘as per the instruction of the minister on phone’ the airline had not bid for London and sent it to the ministry,” the official said. “It created serious problems for him.” Out of the 33 available flights to London, 18 were already being operated by Air India. Jet got seven and Sahara only two.

AMONG PATEL'S CRITICS the loudest voices have come from the erstwhile Indian Airlines unions, who first stood up in opposition to the ministry at the start of the ill-fated merger with Air India. In a letter to the prime minister in June 2009, the Air Corporation Employees Union (ACEU), the largest of the IA unions, attacked the merger as “the final step in the destruction of Air India and Indian Airlines,” and accused the ministry of having initiated the merger for the benefit of Jet and Kingfisher. No evidence exists to substantiate that allegation, though the disastrous results of the merger have been widely dissected in a series of reports: a March 2010 report by the Parliament’s Committee on Public Undertakings, chaired by Congress MP Kishore Chandra Deo, described it as “an ill-conceived and erroneous decision neither arrived at by the two Airlines on their own accord nor mutually considered by them to be in their best interests,” and noted the loss of brand equity and market share to private competitors. Patel has consistently pushed back against accusations that the merger was a mistake, insisting there was a “well-laid down process” led by “a world-class consultant”. But as the former civil aviation secretary Ajay Prasad told me, the consultants were only asked to elaborate existing plans for the merger: “To be fair to them, we said ‘we are considering a merger, will you give us a roadmap.’ We didn’t ask them if a merger is possible.”

Though the erstwhile Air India unions have joined the chorus of ministry critics, their opposition was muted prior to the financial woes that hit the airline in 2009 and delayed their salaries. In aviation circles, the Mumbai-based Air India unions are considered to be less aggressive than their Delhi-based Indian Airlines counterparts. The Air India unions supported the merger: according to a former member of the Aviation Industry Employees Guild (AIEG), which represents about 8,000 Air India employees, then-CMD V Thulasidas had personally enlisted the support of AIEG General Secretary George Abraham. “Thulasidas told George, ‘I will be the the CMD of the merged entity so I will take care of you’,” the former union member said. When I went to meet Abraham in Mumbai, he passed me to the AIEG treasurer, Kailash Bidhalan, who explained their support for the merger. “The privatisation of airports couldn’t be stopped though the unions are affiliated to the Left, which was part of the government then, and were very strong,” Bidhalan said. “So we thought it is better to support the merger and get some benefits instead. Thulasidas called us only after 80 percent of the work was done.” Abraham has since become a harsh critic of the merger: “After the merger, the two airlines had to share [route] entitlements while the balance was given away to private carriers,” he told Business Today in October. “It was a clever move to gift the market away.”

The Air India and former Indian Airlines unions came together in late 2008 to protest the ministry’s proposal to transfer ground-handling services to a new joint venture between Air India and SATS, a subsidiary of Singapore Airlines. A series of agitations and threatened strikes over the ground-handling JV stayed the government’s hand for a time, and the implementation was delayed for more than a year. According to the former ministry official, Raghu Menon, a secretary in the aviation ministry who succeeded Thulasidas as CMD in April 2008, resisted giving his approval to the project, for which he was sacked by Patel less than a year into his three-year contract. “Menon used to be Patel’s loyalist when he was in the ministry and never questioned his decisions. But when he had to clear the AI-SATS proposal, he couldn’t do it. Ground-handling brought a lot of money to AI and it was going to be his name on the dotted line,” the former ministry official said.

“Patel wanted to replace Menon with someone who could be controlled, and who could control the trouble-making unions,” the former aviation ministry official said. That man was Arvind Jadhav, an IAS officer who had been considered for the CMD post a year earlier but passed over by the search committee on account of his lack of experience in the aviation sector. “Jadhav’s appointment file was flown in a hurry to P Chidambaram, who was in Chennai at that moment, to get the requisite clearance,” said an Air India director, and Jadhav assumed charge on 4 May 2009 . The SATS ground-handling joint venture was subsequently approved, and Jadhav made his best effort to rein in the belligerent unions, who escalated their agitations in response.

Jadhav’s conflict with the unions went nuclear in May 2010, after the crash of an Air India Express flight in Mangalore that killed 158 passengers. When engineers publicly aired what they characterised as “irregularities” in air safety, Jadhav clamped a “gag order” on the unions, who had already made plans for a strike at the end of that very month to protest delayed salary payments. The ACEU led a “flash strike” of more than 15,000 employees on 25 May, at which point Jadhav sacked 58 employees, including several union leaders, and de-recognised the ACEU.

JB Kadian, the ACEU general secretary who was terminated after the strike, told me that the union’s conflict with the ministry had become heated well before that point. “We kept writing to the PMO [with complaints about Patel] and he never liked us,” Kadian said. He described a confrontation with Patel at a meeting in Mumbai in 2009: “He said, ‘I know you have been writing to the parliamentarians and the PMO.’ I shot back and said I will keep writing,” Kadian recalled. “He became furious, and got up from his chair, and then said, ‘Remember, first you are an employee of the airline and then a union leader. I will fix you’. He got the opportunity when we went on flash strike against the gag order. He fixed me.”

With each further downturn in the financial fortunes of Air India, union members have become increasingly outspoken in their efforts against Patel, writing letters to the prime minister and approaching opposition politicians. During Jadhav’s tenure, a number of retired employees began filing Right to Information (RTI) requests in the hope of unearthing evidence of mismanagement. One of them was Captain SS Panesar, a former director of training and flight safety with Indian Airlines who enjoys the special distinction of having been Rajiv Gandhi’s instructor. “Jadhav wanted me to stop filing RTIs, so he offered to make me the head of training along with Captain NK Beri,” Panesar said in an interview at Airlines House in Delhi. Panesar told me he had even gone to meet Rahul Gandhi along with 11 other retired employees in order to ask him to “save his father’s airline”. Panesar claims that Gandhi told him, “Uncle, we know his interests are in Jet Airways,” and cited “coalition compulsions” as an excuse for keeping Patel in place.

Jadhav was eventually sacked in August 2011, after Patel had departed for the heavy industries ministry. “He was the first CMD who made public the poor and pathetic status of airlines,” Panesar said. “He didn’t know how to pay the salaries. He had no Praful Patel to guide him.”

V

PATEL'S SUPPORTERS AND DETRACTORS agree that he ran the Ministry of Civil Aviation like a businessman, though the two camps take sharply opposing views on the virtues of that approach: for the former group, it suggests efficiency, professionalism, and quick decision-making; among the latter camp, a distinct bias toward private airlines, an indifference to employee welfare, and a preference for self-enrichment. The other point on which all sides seem to agree is Patel’s considerable personal charm. “He is not unpleasant, and he doesn’t shout and scream,” said the former senior aviation ministry official, who was one of Patel’s sharpest critics. “He speaks good English and is very sophisticated, which is important in aviation circles. He is good at remembering names. When the minister says ‘hello’ to a junior officer, one gets very impressed. That’s how he gets things done.”

The former ministry official suggested that Patel’s personal skills had been one key to his success getting things done—and avoiding political fallout. “He will hold parties himself. Air India will spend the money [for the events] and he will invite all the people, including from other ministries, like the finance secretary. He will go around and talk to everybody. If he got away with everything, it is not without any ability, you see,” the former official said with a smile.

Patel’s social graces and his networking abilities have also helped him a great deal in finding friends across party lines, and he has masterfully navigated the dynamics of coalition politics to his advantage. Within the NCP, he is seen as the troubleshooter and chief negotiator, whether with the party’s coalition allies in the Congress or with the BJP opposition. Patel has taken excellent advantage of both present and future “coalition compulsions”: because the NCP could conceivably ally with either party at the Centre, he has enjoyed diminished scrutiny from the Congress and a surprisingly warm relations with BJP leaders, who have repeatedly declined to include Patel in their public attacks on the ruling coalition.

The former aviation ministry official, who worked under Patel and his BJP predecessor, Rajiv Pratap Rudy, pointed me to an August 2011 supplement in the Indian Express called “Reforms 2020”, which contains an admiring assessment of Patel’s tenure written by Rudy along with an equally warm tribute to BJP leader Arun Jaitley authored by Patel.

Rudy has hammered the government’s management of Air India in a series of public statements, from which Patel’s name has been conspicuously absent. At a press conference in August 2011, Rudy denounced the appointment of Arvind Jadhav as CMD but assigned the blame to the PMO, declaring that Jadhav “should be held accountable for the losses” at Air India, and that Manmohan Singh had to answer for the “so-called Air India scam”. Rudy held a similar press conference in September, following the release of the CAG report, demanding an investigation into one very particular aspect of the oversized 2005 aircraft purchase order—the signature approving the deal from then-Finance Minister P Chidambaram—and blaming Manmohan Singh and the PMO for the plight of the airline, without any mention of Patel.

A few days later, I went to meet Rudy at his Shahjahan Road home. He is not merely a former aviation minister, but also a licensed commercial pilot; his wife, Neelam Pratap Rudy, also worked for Indian Airlines until 1989. He takes great pride in his intimate knowledge of the aviation sector, and he was broadly supportive of Patel’s liberalising initiatives, which he described as a continuation of his own policies as minister. “Praful never did anything new,” Rudy told me, though he hastened to add that “the only things he did which we did not want to do were the merger and the uncalled for expansion in the purchase of aircraft.” But he placed the blame for these decisions outside the aviation ministry, arguing that “in one stroke,” Chidambaram had increased the aircraft order to 68 planes. He noted that bilaterals had been “given away”, adding that “those responsible for that, like the planning department, should be questioned.” I asked Rudy why the BJP had not been able to muster more support for a full investigation of what he had called the “Air India scam”, and he replied in an oblique way. “Manipulations are obvious but we don’t know who the beneficiary was,” he said. “We are waiting for something substantial to come up. We can’t investigate.”

The Rajya Sabha MP and BJP spokesman Prakash Javadekar has been less circumspect in his criticism. When the opposition parties moved to “call attention” to Air India’s woes in the Upper House in 2009, Javadekar was particularly severe with Patel, demanding to know why the names of middlemen—including Talwar—had “surfaced in every deal”. When I met him at his house in Delhi one recent evening, he reiterated his complaints: route rationalisation, which had benefited private airlines, was “a Praful Patel scam”; the aircraft acquisition was “the worst kind of corruption”; and the merger was “a man-made disaster”.

“There were touts involved,” he continued. “Talwar’s name emerges on every contract.” I asked Javadekar to tell me more about Deepak Talwar, but he cautioned me not to use the lobbyist’s full name. “You know it’s not appropriate to mention the complete name,” he said earnestly. “There is no concrete evidence against him. Just say Talwar.” Javadekar lamented that the Air India case had been lost between the uproar over the Commonwealth Games scam and the 2G spectrum scam, but promised that the Parliament Public Accounts Committee would soon take up the issue. “Praful Patel is responsible,” he concluded, “but to say that he is the only one is not appropriate. It is not a franchise corruption, it is a coalition corruption. How can a majority party allow it? They are all in it together.”

Among Congress leaders, even those who have been publicly critical of Patel’s record in the past, there is a distinct unwillingness to revisit the issue. Union Minister for Tribal Affairs and Panchayati Raj Kishore Chandra Deo, who chaired the particularly tough Committee on Public Undertakings inquiry into Air India, told me that “it’s been a long time” since his report was submitted. The committee was still waiting for a response from Air India, he said, “but I have become a minister, so I am not in touch.” Dinesh Trivedi, now the railways minister, had written several letters of complaint about Air India to the PM, and told me that “many things have gone wrong.” But he disagreed with the allegations against Patel, whom he described as a friend. “I wouldn’t say Praful would get into monetary things,” he said. “He is a very rich man himself. But I feel he would get involved in a lot of the decisions. He has geared up the aviation, you have to give him the credit.” In closing, Trivedi suggested that the real problems had begun well before the UPA government. “It all started with Sharad Yadav,” he said, pointing to the aviation minister who took office in 1999 under the National Democratic Alliance (NDA) coalition. “If you dig into it, a lot of people will go to jail.”

Patel’s defenders, like the man himself, tend to attribute ideological motivations to those who attack his tenure at the aviation ministry.  Much of the criticism takes as its premise the need to defend and promote a public-sector enterprise in the face of competition from private firms. The critics, of course, allege that Patel tilted the playing field against Air India rather than keeping it level, but Patel is not wrong to suggest that many of them would prefer to have it tilted in Air India’s favour instead. The ideological element of this debate—between the embrace of free market philosophy and the older ways of the mixed economy—has tremendous significance, and not merely because it has served as a useful diversion for Patel and his allies against specific allegations of mismanagement. At a time when the most egregious examples of corruption are invariably found at the points where the government and corporates do business, the terms of this debate repeat themselves over and over again. In each case, the same confusion clouds the air, erasing the distinction between a situation where private firms broadly benefit from liberalisation and cases where specific private firms reap disproportionate benefits from their cosy relations with politicians or bureaucrats—which looks increasingly similar to the terms of the bad old ‘licence raj’.

When I called Naresh Chandra, the former cabinet secretary and ambassador to the United States, whose 2003 committee report led to opening international routes to private airlines, he rubbished the CAG audit of Air India along these lines. “It is a stupid report,” he told me. “It might as well have been written in the Soviet Union. [Liberalisation] helped the Indian passenger a lot, but the socialist lobby will not take that into account. It is anti-national to keep protecting Air India at the cost of the passenger.” I asked him if it wasn’t also the case that poor decisions had helped lead the airline to its present state. “This is 2G mentality,” he replied firmly. “We want to see thieves everywhere. Even if there was no corruption, nothing could be done to this airline. The report says minister should put Air India on top priority. Stalin and Lenin used to talk like that.” Ajay Prasad, who served as civil aviation secretary under Patel and played a key role in many of the controversial decisions, defended the ministry in a similar manner during our interview. “What is so sacred about Air India?” he asked. “Should it be protected by hurting the consumer? Providing artificial crutches for Air India is old mentality and old baggage.”

In mid-November, I went to see Patel in his new offices at Udyog Bhawan in Delhi. The corridor to his office exudes a sort of class rarely associated with government ministries; I was told that he had it redecorated in preparation for his arrival in January. Once you pass through the glass doors, etched with “Minister for Heavy Industries and Public Enterprises” in English and Hindi, crisp white-painted walls and a row of glass doors in polished wooden frames lead to his cabin, which shares the same elegant, minimal design.

As I waited for Patel in his secretary’s office, a television hanging on the wall was tuned to a news channel, where anchors were discussing the prospect of a government bailout for Kingfisher, which had been canceling flights amidst mounting losses. When I was ushered into his office, Patel was on the phone, and he apologised for having rescheduled our meeting. He sat behind a huge arc-shaped wooden table that dominates the room, dressed in his usual white kurta-pyjama and looking very relaxed. Photographs of President Pratibha Patil and Manmohan Singh were placed on a table near the door, with a vase of long-stemmed roses between them; a huge Samsung flat-screen TV was mounted on the opposite wall. Patel smiled often, except when my questions turned to Air India and his critics, and I caught a few glimpses of his charming social demeanor when he had to answer the phone a few times during our meeting.

Patel was quick to point out his achievements and take credit for reshaping the aviation sector, and he insisted that Air India employees had been unwilling to adapt to the changes that he made, which were intended to strengthen the airline against competition. His weariness with questions about Air India was evident, and his face creased with frustration every time I raised the airline, like a person remembering a particularly unpleasant nightmare.

I asked him why the aviation sector seemed to be in such a mess today. “You see,” he said, as his smile gave way to a serious look, “what we have initiated is competition. It always means that the pressure will be on the existing players.” He quickly added, “Don’t look at Air India. It is different.” He explained further. “I am saying, in the private sector, anywhere in the world, I don’t think our policies are any different, there is a level playing field for everybody, and all the airlines have the same environment and regulations to follow. Aviation industry globally goes through its cycles. It’s not that it’s only happening in India. It is very much influenced by global trends and fuel prices,” he said.

Would he move to bail out Kingfisher if he were still in the aviation ministry? “There is no question of bailing out in private sector,” he replied. “Even in the case of Air India, the word ‘bailout’ is wrong because the government is the owner of the company. What it is doing is infusing equity in a company which is its own. Air India’s problems are different; it has got its own historical legacy.”

When I asked him about what he had envisioned for the national carrier at the beginning of his ministership, he began by saying he had wanted to make it more competitive—to streamline operations so that it could stand up to competition from the private sector. What followed was his explanation for why this plan had not succeeded. “Unfortunately the whole environment within the organisation was not favourable,” he said. “People did not accept change easily and, they were in monopoly and were not ready to take on the heat of the competition, both domestic and international. You can’t have a monopoly in today’s day and age. This is an era of competition.”

“People in Air India said I was helping out private sector but now private sector is itself facing trouble,” he continued, pointing to Kingfisher’s recent troubles and Jet’s continuing losses. “It is about competitive environment,” he said. “Even in America, so many airlines have been sold, closed and merged. It’s not like it’s happening only in India for the first time. With competition, these are expected things to happen,” he said, before adding with a smile, “May the best survive.”

Patel said that his loudest critics were only those people unhappy with the performance of Air India. “By and large, people of India are very happy with the growth in civil aviation,” he said. “It is the first time that a common man also feels that he can fly. They should see what has happened in the last seven years, instead of being critical.” He said that he wanted to be remembered “as the man who made a difference to aviation—and who made it possible for the average person to fly.”

But when I asked him whether he felt anything could have been done differently with Air India, a hint of frustration was evident in his blunt reply: “Nothing.” After pausing for a moment, he added, “For Air India, the government support has always been there and it will continue to be there. I only wish them well and wish they change with circumstances. That’s all.”

We talked for a bit about his career in politics. “You must write that I am somebody who is not parachuted into some position,” he said. “Not many people know that Praful Patel actually started his political career by contesting a ward election in a municipality.” Referring obliquely to critics who have accused him of enriching himself as a minister, he pointed out that “I had everything in life before I joined politics. It’s not like I got these things after I got into politics, though some critics try to insinuate that I have made it after I got into politics. That is true for those who are ignorant.”

When I returned to Air India a few minutes later, asking about when the airline’s financial problems had become visible, his displeasure was evident. “Don’t talk about Air India,” he said. “This interview is not about Air India. I refuse to talk about Air India. Air India’s problems have been historical. NDA was trying to privatise Air India in 2001. Even when I came to the ministry, Air India was not doing very well.”

In that case, I asked, why did the UPA government not privatise it? “The government in its wisdom has taken a policy decision,” Patel replied with a bit of sarcasm, before reiterating his frustration with the subject one last time.

“Please don’t make this an Air India-centric interview,” he said. “I am not interested in talking about Air India.”

Praveen Donthi is a staff writer at The Caravan.

I

AT AROUND NOON on 28 July 2007, Air India’s newest plane descended from the silver cotton clouds of a pale monsoon sky, escorted by a pair of Indian Air Force fighter jets. In the Technical Area at Delhi’s Indira Gandhi International Airport, where dignitaries usually gather to greet visiting heads of state, the roar from the engines of the Boeing 777-200LR was met with euphoria by the assembled VIPs, including Prime Minister Manmohan Singh. “I take pride in the fact that our government has taken steps to bring to an end a long period of neglect of our national carriers,” Singh announced proudly. “I compliment my colleague Shri Praful Patel and the present leadership of Air India and Indian Airlines for their important forward looking and innovative role.” For Patel, the minister of state for civil aviation, it was a moment of triumph, and he stood beaming in a pearl-white kurta-pyjama, feeling every bit like the tallest man on the dais.

Designed for long-haul intercontinental travel, the Boeing 777-200LR is an imposing sight, 209 feet long and 212 feet from wingtip to wingtip. The arrival of this particular aircraft, which had flown nonstop to Delhi from the Boeing plant in Seattle, was rich with symbolic significance for Patel’s tenure, reflecting two of his major initiatives for Air India. It was among the first of the Boeing jetliners that had been ordered under Patel, part of an enormous purchase of 111 aircraft placed in 2005 at a total cost of `450 billion. It was also sporting the brand new logo and livery designed to reflect the planned merger of Air India and Indian (formerly Indian Airlines), which had been initiated by Patel in 2006 and cleared by the cabinet in March 2007: a red flying swan morphed from Air India’s “Centaur” logo, incorporating the stylised Konark Temple Sun Chakra of Indian. Within a few days, the 777 would be flying nonstop routes to the United States, making Air India the first domestic operator to do so—another one of Patel’s priorities for the national carrier.

Flanked by his party colleague Sharad Pawar—the chief of the Nationalist Congress Party (NCP) and the minister for agriculture—and the deputy chairman of the Planning Commission, Montek Singh Ahluwalia, Patel used his speech at the ceremony to ask the prime minister to support another large aircraft purchase. “If we have to look ahead for growth, we will have to revisit the entire fleet requirement. I will urge the government and the prime minister to look into this aspect,” Patel said, exuding the confidence of a man who saw himself as a reformer of the skies—who opened up India’s cosseted aviation sector 15 years after Manmohan Singh had done the same for the Indian economy. He announced that he would soon submit a request to buy another 60 planes—for about `280 billion—and declared that the aviation sector would create two million new jobs in the next decade.

In 2007, Air India was celebrating its 75th anniversary, and the arrival of new aircraft was cause for further celebration—the first upgrade of the airline’s antique fleet in more than a decade. The only damper on the festivities was the absence of the eight unions representing the employees of Indian, who boycotted the ceremony to protest the decision to merge with Air India. But Patel, always adept in his dealings with the media, waved the issue aside with a blanket assurance that “the interest of the employees” would be protected. He liked to think of himself as a real doer—a quick and efficient man of action, a sharp and successful businessman in his own right—and he had unquestionably shaken up the national carriers and the aviation sector in a few short years on the job. In his own speech, the prime minister lavished praise on Patel’s achievements: “The aviation environment in our country has recorded a sea change over the last three to four years and I complement my colleague Praful Patel for this contribution to this happy outcome.”

THE SENSE OF JUBILIATION would prove to be short-lived. By 2009, Air India had plunged into a dire financial crisis, caused in large part by the two initiatives celebrated on that July afternoon: the oversized purchase of new aircraft and the merger of the two national carriers. The company formed by the merger of Air India and Indian, NACIL (National Aviation Company of India Limited), had posted losses of `22 billion in 2008 and `55 billion in 2009, along with a debt burden of `160 billion. Staff salaries for June 2009 had been delayed, and the airline’s chairman and managing director (CMD), Arvind Jadhav, requested in August 2009 that senior officials forgo their salaries while the airline sought government aid.

Various employees’ unions had begun to write angry letters to the prime minister, pointing the finger at the aviation ministry for the calamitous state of Air India. In a letter dated 13 July 2009, the All-India Airlines Retired Personnel Association accused Patel of having “single-handedly and systematically stripped the two national carriers—AI and IA—and brought them to brink of bankruptcy by a series of well planned out maneuvers, which we have only now been able to comprehend and unravel. All along, all these actions have been cloaked under the garb of unleashing India’s civil aviation potential, even as they struck at the very root of AI’s and IA’s existence.” That same month, the government formed the first of what would be many such committees, this one headed by the Cabinet secretary, to devise a plan for restructuring the airline within 30 days.

In his August 2009 Independence Day address from the ramparts of the Red Fort, on a day when history and symbolism fly high along with the tricolour, Singh attempted to assure the country that the government would not abandon the flag carrier it had nationalised in 1953. “We are giving careful attention to the problems of Air India and will resolve them soon,” he said. Patel, for his part, remained unfazed. When journalists contacted him seeking a reaction to Singh’s Independence Day speech, his response was calm and detached, as would remain the case for the duration of his tenure at the aviation ministry: “I am happy that Air India has found mention in the prime minister’s Independence Day address, which shows the priority being accorded to Air India by the government.”

A month earlier, Patel had been cornered in the Rajya Sabha by a battery of non-Congress parliamentarians, who used the time allotted for “calling attention” to launch a series of allegations against the ministry: that the merger had been misguided, mismanaged and not approved by Parliament; that the 2005 aircraft purchase order had been conducted hastily and without due diligence; that the airlines—which had both posted profits in 2003, 2004 and 2005—had begun making enormous losses even before the onset of the global recession; that private domestic and international carriers had received preferential treatment from the ministry; and, most damning, that “middlemen” and corruption had influenced the making of aviation policy.

Amid the welter of what he called “insinuations flying here and there”, Patel emerged more or less unscathed. He calmly ignored some of the more fervid accusations, and concentrated on what has since become a well-worn narrative to explain the airline’s declining fortunes: the government had rightly “liberalised the aviation sector keeping in view the rapid increase in the demand for both domestic and international air services”. The advent of increased competition, Patel argued, had naturally diminished the market share of the national carriers; the decision to upgrade the fleet was long overdue, and necessary to meet the challenges of increased competition. The global economic downturn, he said, had damaged the fortunes of airlines around the world, and Air India was no exception. The massive order of planes had been necessary (“how can you operate an airline with older aircraft which are 15 or 20 years old”) and based on projections made by the management of Air India and Indian Airlines. (“There is a well laid down process in government for acquisition. It does not happen overnight just because a few people in Air India decided it, or, a file came to the minister and he was in a rush to buy aircraft.”) The same was true of the merger: “A world-class consultant was appointed,” Patel said, “and presentations were made to the management as well as to the ministry.” Besides, Patel suggested, there was no evidence that the airlines would have fared better unmerged: “Do you mean to say that a stand-alone Indian Airlines or a stand-alone Air India would have been able to compete in the global air space?”

READER'S COMMENTS [33]

Interesting Article indeed! No doubt everything claimed against Mr. Patel might indeed be true. But prblems with national carrier(s) did not start in 2004 as it seems to be the cut off date. I am no supporter of Mr. Patel. But beyond a point if you try and milk the cow it will fall down and start writhing in agonising pain! These are days of astronomical numbers ....size of profits, scams, profits and losses everything is big. All problems with Air India have a linkages to its past. I am more saddened by the fact they have picture of JRD on their website! As for bureaucrats (corrupt or those who stood firm!) they always do their job....either ways. All irregularities and instances of favouring private players must be probed. But just think which period should be probed and who all will be probed....But it is not very difficult to guess the outcome. Aadarsh stands tall..kalmadi is let loose on street ...D.Raja was recieved by a 2000 strong crowd. Long live Indian democracy ..watch out for BSNL. It is sweetly and silently bleeding.

Very well researched and articulated. After publication of this , Praful et al should have been behind the bars.

brilliant work Praveen

Fantastic article full of facts, previous CMD , SUNIL ARRORA, was a dynamic person who had managed the airline very well, brought it into profits,well praful patel along with his cabinet colleagues,p.chidamabaram and IAS officer's thulasidas & arvind jadhav should certainly be sent to jail for manipulating the aircraft deal and crippling the airline to the present state.patel cannot disown the responsibility , he has to go to jail along with the other civil aviation bureacrats{ ajay prassad, etc,.}

http://www.theglobeandmail.com/news/politics/canadian-accused-of-bribing-cabinet-minister-in-india/article2323342/page1/ now this thinG shows another little known scam of patel and company and also the man who slept while bombay was burninG

NICE ARTICLE BUT I AM SURPRISED WHY GOVT NOT PUNISH THOSE WHO ARE RESSPONSIBLE OF KILLING AI

Great Story Mr. Praveen, Cant stop appreciating you for the efforts put behind the story. We have the facts now !! Sympathetic to IA Employees !!

good article describing the truth behind air india curtain

My congratulations to Mr D. too !

This would summarize the whole story http://ibnlive.in.com/videos/166458/30-minutes-who-killed-the-maharaja.html

May be worse than 2G scam.Every indian citizen's should know,how Air India was destroyed. Even more worst is the condition of AAI.Its during same tenure,India's largest Airports were sold out.

Praveen, Marry me Praveen. I am an airhostess marry me please!

i've been waiting for someone to catch onto the emirates deals. i knew there was a backstory of kickbacks waiting there, but what gets this guy and his cronies to jail? AND what undoes all the lopsided bilaterals?

make praful patel compensate all Indian Airlines employees from 2003 he is a big crook

great work , but this means nothing to anybody but to air india employees families, only we know what we are going through. and great con job by praful patel , have you or your children earned a single rupee honestly with your sweat

This is too long an article ! Could the Author have summarized it a little bit better ?

excellently put together article, pieces well connected, very objective, hope this reaches the intended people. national carrier has got everything which can take it back to the lost glory and much more ahead, only the will is required from all the stake holders. hope to see it fly high once again.

Article is well researched:excellent read... but it will fall on deaf ears..as always.. its no use, nobody will ever listen.. we have corrupt and inept people leading us

Nice Article. Main stream media has no time to cover Mr. Patel's dark side. This is a big leap. Hope you dont get sold out like other media companies.

CAN YOU MERGE A PERSON SUFFERING FROM CANCER WITH A PERSON SUFFERING FROM T B AND TREAT THEM TOGETHER CERTAINLY NOT THAT IS WHAT PRAFUL PATEL HAS DONE MERGED BOTH AIR INDIA AND INDIAN AIRLINES AND KILLED THEM BOTH

very well written,but wht is the outcome?

Bravo! Excellent and a very objective article that tried to cover all aspects of the story. Please keep up the good work.

great investigative article i am very scared about the future of our country. even you get proof for all of the above and go to court, only manhours will be wasted, money also wasted, patel will come out unscathed becoming more popular due to our friendly TV channels what is the solution to prevent such things?

My congratulations to Mr Donthi. This article was long overdue. The lead picture tells the whole story. I do wish Air India recovers having been deliberately run into the ground and routes (many of them profitable) withdrawn thanks to capital cronyism. Now that Kingfisher has sunk, the truth can be revealed. Krishna

The PM is responsible for all that happened for the civil aviation. May be there is an understanding with the NCP that they can squander any amount of money from the portfolios that were handed over to them. Praful Patel is an Indian and he did what an Indian should do. Congress Zindabad!!!

Excellet article!

Excellent piece of journalism , best 4000 word article i read in a long time, good usage of open sources like "Radia tapes", they have made it as consumer interest vs AI worker welfare, hope Rahul Gandhi sends u angry tweets.

Excellent Article and Praful Patel Killed Air India

Fabulous article , seems to have painstakingly come up with information and not just hashed up something . This is a scam and needs to exposed . I feel for the people of Air India but I feel more for the people of India. The powerful seem to have completely gained in every possible way at the expense of the common man. Inflation at its highest GDP at its lowest ,what ever happened to India shining. Its rogues like Patel that have broken our backs . I hope this is exposed smells of something rotten for sure . Great Journalism !!!

A Very well researched and balanced article. But being neutral doesn't really solves the big issues like Air INDIA. and INDIA as well.

Bravo. Excellent Article. Well Balanced.

A very good read. The biggest disaster was the merger of Indian Airlines and Air India. Typical bureaucratic shortsightedness. Did nobody consider the structural problems and problems of personnel that would arise from the merger? Simple calculations like how to assess seniority of personnel coming from two different organizations? Planning seems easy when it's done on paper, when one has to deal with the human effects of that planning,then it's far more complicated and needs both brains and imagination. Both of which seem lacking in the current Ministry of Civil Aviation circles.

very informative, good read.

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