When the privatization of Pawan Hans finally looked ready for take-off after three failed attempts in six years, it developed a serious snag. On 29 April, the Cabinet Committee on Economic Affairs approved the sale of the air carrier to Star9 Mobility, a Cayman Islands-based Almas Global Opportunity Fund (with a 49% stake in the venture to go with Big Charter). There is a three-way union in the leadership. 26% and Maharaja Aviation’s 25%). For reasons that remain unclear, the panel ignored an order issued by the Kolkata bench of the National Company Law Tribunal (NCLT) on April 20 against Almas for failing to pay certain creditors of EMC as required. Up for action was a bankrupt power carrier. It was made up for a later acquisition by an earlier deal. Alleging “willful violation of the approved resolution plan”, the eligibility of Almas to acquire Pawan Hans is now in doubt. Sales of India’s state-run helicopter service, halted this week, will have to wait for the air to clear.
This wind is further exacerbated by the fact that only sketchy data is available in the public domain on Almas’ finances, while its partners have some of the best business records. This ambiguity led critics to wonder whether the winning bidder for Pawan Hans had at least taken a cut on the net worth. 300 million. The government’s approval last month shows that it was satisfied with Star9 Mobility’s submission on its financial position at the time. Yet, to the extent that the Cabinet panel’s oversight of the NCLT decision was erroneous, it was reckless in such circumstances. At the very least, it reveals the failure of due diligence that our disinvestment program can often face in the face of political opposition. Since civil aviation remains a somewhat ‘sensitive zone’ from the point of view of security, private operators cannot be allowed to enter our skies without adequate scrutiny of their antecedents. Now that Almas’s credibility is tainted by insolvency code violations, unless it is proven wrong on appeal, the ideal way would be to restart the process and invite fresh bids.
Jointly owned by the government and state-owned Oil and Natural Gas Corporation (ONGC), Pawan Hans has fared poorly as a monopoly operator of civilian choppers. Hence, the delayed sale will be a blow to the revival hopes of the market. With over 40 helicopters, it provides flights to various tourist destinations and pilgrimage sites in the Himalayas, apart from manning ONGC personnel. Its service network has hardly expanded since its 1985 inception. While regulatory constraints are partly to blame, its sluggishness may explain why Indian demand for short air hops has remained unfulfilled for a long time. Across the world, business travelers who are under time pressure can rely on urban helicopter rides from airports to rooftop helipads, but our cities offer no escape from traffic jams. Decades ago, as we began to open up our economy, GE chief Jack Welch complained about valuable time lost in transit on a trip to India. It’s a sad commentary on our disregard for short-haul convection that nothing has changed on this score. To ensure this, our latest drone policy envisions a pilotless two-seater Sky Cab. If all efficient security checks are completed and fares are kept affordable for more than just the wealthy, these could transform air mobility. Even though air cabs are less than a decade away, we must not allow helicopter services to deteriorate. Just as we need to privatize Pawan Hans, we need to revive this market.