The national carrier defaulted on concessional late fees/penalties for the period July 2016 to December 2019.
According to the CAG, Air India imposed an “avoidable” penalty of ₹43.85 crore on Boeing for non-compliance with the stipulated timeline of the contract under the agreement for an aircraft component service programme.
The amount of fine was paid in August last year for the period July 2016 to December 2019.
The Comptroller and Auditor General (CAG) mentioned about the fine in a report tabled in Parliament on Tuesday which said there was “avoidable payment of penalty due to delay in return of scrapped components” by Air India.
In December 2015, the airline entered into an agreement with Boeing for a rotatable exchange program related to the servicing of 787 aircraft components and this agreement came into force from July 2016.
As per the agreement, Air India was required to return the removed component along with the component information within 10 calendar days after the serviceable exchange component is delivered to Boeing and in case of failure to do so, a delayed return fee would be payable to the aircraft. Is. the creator
The national carrier defaulted on a discounted late fee/penalty for the period July 2016 to December 2019, following which Boeing sent a letter in July 2020 notifying the suspension of the program if payment was not received by July 31, 2020 Was. Thereafter, Boeing gave six months’ notice of termination and withdrew the exemption previously granted.
During the period July 2016 to December 2019, the CAG observed that there have been several instances of return of components removed by Air India beyond the stipulated time limit of 10 days and delayed return.
Citing audit analysis, the CAG stated that during the initial period (July 2016 to December 2017), there were 170 cases of delayed returns and in 88 instances, there were delays of more than 30 days with a maximum of 214 days.
The report stated, “…For non-adherence to the timeline for return of removed parts as stipulated in the agreement, Air India Limited paid a fine of $5.87 million (₹43.85 crore) to M/s Boeing. Did.”
The findings of the apex auditor are part of the report ‘Central Government (Commercial) (Compliance Audit Overview)’ for the year ended March 31, 2020.
,