The Hindu Business Line : Air India, Indian merger may be delayed

At the time of awarding the contract to consultants Accenture, to draw out a roadmap for the merger, it was decided that pre-Cabinet work would be completed in 10 weeks while all post-Cabinet approvals would be obtained within 16 weeks.

In addition, Accenture was to handhold the new merged entity for 52 weeks to ensure that the entire process would be completed by March 2008.

With the Union Cabinet yet to give its nod for the proposed merger, there is a feeling that there could be some delay.

The deadline for the merger process to start from April 1 was based on the assumption that the Cabinet would accord clearance to the proposal by the middle or end of this month.

The Committee of Secretaries, to whom the matter was referred by the Group of Ministers (GoM), has already come out in favour of the merger.

But the GoM and the Cabinet are yet to consider the proposal.

"There could be some delay but not an inordinate delay and this could be on account of meeting the statutory timeframe," a senior Government official said.

"For example, we will have to give notice to the creditors and lenders about the process going forward. The process, however, is on track and will be completed."

However, there are sections that are of the opinion that the timeline laid down could be compressed, especially since Accenture has already begun work on a number of issues including integrating the workforce from the various units of the two airlines.

According to the original schedule, this should have been taken up only after Cabinet approval.

It is also felt that once the GoM gives the nod, Cabinet approval may not take much time.

Sources said that there are various routes the merger can take, including through legislation or through an order of the court.

"The fastest way for the merger to go through would be to follow the Ordinance route as was done in 1953 when the Air Corporation Act was repealed to create Air India and Indian Airlines," sources said.