Sindhu Bhattacharya in First Post.Business
Who killed Air India? Jitender Bhargava, who spent more than two decades with the airline in several executive positions, has spared no one in his book ‘Descent of Air India’. The ministry of civil aviation, successive Air India chairmen, employees and of course the various ministers who have held sway over the airline – everyone has been in the line of Bhargava’s fire. He has leveled serious charges against at least one Chairman of the airline and one minister who held charge of the Ministry of Civil Aviation for long years. But in this long narrative of what ails the airline, what led to its decline and what should be done to improve its fortunes, Bhargava has also managed to regale his readers with some rather interesting anecdotes.
The one about former Chairman V Thulasidas resorting to vaastu shastra when the airline’s financial health was fast declining shows how instead of tackling the situation, Thulasidas allegedly waited for divine intervention. This is the same chairman who allegedly doubled the aircraft order for Air India which subsequently pushed the airline into deep losses. Bhargava says vaastu expert Raj Shekhar Chawla from Hyderabad was appointed to guide the chairman on “where to place his desk, where to conduct his meetings with colleagues and which doors to the conference room to keep shut or open”. He also narrates Thulasidas’ alleged penchant for having an AI employee accompany him from his house to work and back every day, with a peon being instructed to keep the lift doors open when the chairman’s car was nearing the office!
In this long narrative of what ails the airline, what led to its decline and what should be done to improve its fortunes, Bhargava has also managed to regale his readers with some rather interesting anecdotes.
What is ‘shortfall allowance’? It’s the money that senior pilots were paid even if they did not fly as many hours and junior pilots flew by 1994. Because earnings of a senior pilot cannot be below those of a junior one, never mind how many hours of flying the senior did. This scheme, which replaced fixed daily allowances for pilots till then, led to an increase in expenditure of Rs 307.2 crore during 1995-1999 says Bhargava. It also meant that often, senior pilots were indeed being paid for not flying. Ludicrous, isn’t it?
Even Naresh Goyal and his legendary powers of persuasion find a mention in the book. Bhargava has alleged that since 1970s, Jordan’s ALIA group wanted air traffic rights to India despite there not being enough air traffic between the two countries. This request was refused once, then a second time in 1979. But in 1981, ALIA was granted full traffic rights. “The local manager of the airline representing ALIA was none other than the current chairman of Jet Airways – Naresh Goyal”.
But the most unctuous reference is made to Kerala oil massages which the then minister Shahnawaz Hussain wanted on board Air India flights. Bhargava says the minister announced this decision to the media first and then asked the airline to implement it. Never mind if some passengers object to the smell of the oil, if the aircraft’s upholstery would get spoiled, even if there is no space really to accord anyone having a massage some privacy. “The minister suggested that we provide some curtained enclosure within the aircraft.” The author says though the massage was feasible in a separate enclosure, it would also warrant a bath on board! This is when the proposal was finally buried. To assuage the minister’s wish however, a Delhi-based company was persuaded to introduce the Kerala massage at Delhi airport and the service continued till Shahnawaz was minister.
The author speaks of new uniforms for cabin crew and ground staff and how Ritu Beri went one up on designers such as J J Valaya and Tarun Tahiliani in 2007, when new aircraft induction meant new uniforms. Bharagava alleges that Beri was rejected in the first round of approvals for uniform designing but she offered to waive the designing fee and the tendering process was shelved mid way. “How Ms Beri was compensated for her efforts makes for an even more interesting story. Thulasidas deputed a team of Air India officials to her farmhouse on the outskirts of Delhi. …….Initially she offered to supply the sarees at Rs 4000 each but that was way more than the amount we were paying the existing vendor – Rs 1600 per saree. When the team brought that to her notice, she agreed to drop the price to Rs 3600. She sourced the uniforms from one of our existing vendors and we ended up paying an additional amount Rs 2000 per saree…… J J Valaya and Tarun Tahiliani took AI to court for wasting their time and effort and were reimbursed all costs in an out-of-court settlement”.
Did you know that earlier, officials from the Air India’s Commercial Department would visit large corporate houses with a flight timetable and a small gift – a clay model of the Maharajah or grey overnight bag – to promote airline’s sales? Bhargava says he suggested that this practice be restarted sometime in 2002 and that airline’s senior managers should personally meet Ratan Tata, Ambanis, Birlas, Mahindras and the Godrej family members to hardsell Air India’s First and Business Class offerings. Of course, the airline never took up this suggestion.
6:45AM BST 15 Oct 2012
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For the British people, the Royal British Legion’s Festival of Remembrance is a chance to honour the men and women killed and maimed in our name. For the Legion’s president, Lieutenant-General Sir John Kiszely, however, it is also “a tremendous networking opportunity” which “commercial people can get in on”.
The general’s tongue had been loosened by a £110,000 offer from South Korean arms dealers, who wanted his help selling their products to the Ministry of Defence. His Legion role, he told them, was “extremely useful for all these contacts”. As he explained: “If I tried to book in… to have a meeting on behalf of a company, I probably wouldn’t get past the door.” But “with Andrew Robathan [the Armed Forces minister], I would get into his office by saying, 'As president of the British Legion, you know, it’s time’… and that’s when you sow the seed.”
To the same generous Koreans, Admiral Sir Trevor Soar, ex-Commander-in-Chief Fleet and self-proclaimed “MoD warrior”, offered to “target” his former subordinates and “get them interested”. Sir Trevor, who only left the Navy this year, is still covered by the two-year lobbying ban commonly imposed on retired officers, but told his would-be clients that the restriction had “no legality” and he would “just basically ignore it”.
General Sir Mike Jackson, head of the Army during the Iraq War, offered to “dangle a fly in the waters” on the Koreans’ behalf. General Lord Dannatt, another ex-chief of the general staff and former adviser to David Cameron, boasted about how he’d avoid anti-lobbying rules by “targeting” an old school contemporary who happens to be the MoD’s permanent secretary. For a “reasonable” £100,000 for 24 days’ work a year, he’d set up lunch with the chief of defence procurement, Bernard Gray. Air Chief Marshal Lord Stirrup, former chief of the defence staff, told the South Koreans he would “grill” former colleagues and ministers on their behalf over private dinners at his house in London. “When do we start?” he asked.
This morning, amid the ashes of several distinguished reputations, the question is: where will it end? The chequebook-ready Koreans were, of course, undercover reporters from The Sunday Times. Of the eight senior former officers they approached, only two refused their blandishments completely. And for the Ministry of Defence, the implications are particularly seismic. The department is notorious throughout Whitehall for signing colossally expensive contracts that deliver poor value for taxpayers. Can there possibly be any connection between this and the fact that so many of its people go on to work for defence contractors?
One of the most heavily criticised recent contracts is for the Royal Navy’s two new aircraft carriers. These will cost taxpayers more than £6 billion, even though one will be immediately mothballed and the other will carry no aircraft until 2020. At least four top officers and ministers involved – including the heads of the Navy and the RAF, the vice-chief of the defence staff, and the defence procurement minister, Baroness Taylor – went on to join companies involved.
Then there is the contract dubbed the “worst deal in history”: to give the Air Force 14 new Airbus A330 transport/tanker aircraft. Bought by a civilian airline, A330s cost as little as £85 million each, or £1.2 billion for 14. But the MoD is paying £10.5 billion – for aircraft it will not even own, but lease. Nor did the price include standard military fitments such as flight-deck armour, meaning that the jets were unable to fly into any war zone.
Roughly half the price, according to the National Audit Office, comprises financing costs and profits for AirTanker, the PFI consortium that actually owns the planes. Over the last few years, more than 30 MoD officials, including some directly involved in negotiating the deal, have moved from the ministry to the companies concerned. As Paul Flynn, a Labour MP who has campaigned on the issue of defence procurement, told me: “I am not suggesting misconduct by any individual here, but the prospect of retirement work is potentially corrupting.”
All this is known as the “revolving door”. In 2009/10, the latest year for which full figures are available, 326 officers or MoD officials were cleared to join the private sector. Of these, 240 went to defence companies. Fully 20 were generals, admirals or air marshals.
The problem is not confined to the MoD. At the Cabinet Office, John Suffolk has moved from the highly sensitive post of chief information officer to become global cybersecurity officer at Huawei, a Chinese company accused by the Pentagon of having “close ties” to Beijing’s military. Lord Hunt, the former Labour health minister, joined Cumberledge Connections, a health lobbyist run by a former Tory health minister. Baroness Smith of Basildon, once the minister responsible for information technology, has joined Vertex Data Science, a computer outsourcing firm.
The body supposed to regulate all this is called Acoba, the Advisory Committee on Business Appointments, part of the Cabinet Office. When they leave public service, ministers and senior officials must ask the committee to approve any jobs they’re offered (more junior staff, including the vast majority within the MoD, are dealt with at departmental level). But Acoba seems extremely reluctant to place its foot in the revolving door. In fact, over the past 15 years, it has not vetoed a single application. According to its annual reports, it considered 944 applications between 1996 and 2011. Of these, 412 were approved with conditions and 532 unconditionally. None was rejected.
Even where conditions were imposed – typically a ban on lobbying former colleagues – none has ever lasted for more than two years. Acoba’s chairman, the former minister Lord Lang, told MPs that longer prohibitions would be a “restraint of trade” and against applicants’ human rights. And, as Sir Trevor told the undercover reporters, even the existing bans have no legal or contractual standing. Acoba itself has no powers to police them: Mr Suffolk, the Huawei employee, has been told he must not “draw on any privileged information” from his time at the Cabinet Office, but that condition seems almost impossible to enforce. Last year, 13 former ministers, officials and military officers – including the former Cabinet Secretary, Lord O’Donnell – did not even bother to approach Acoba before taking new jobs.
Lord Lang has insisted that the committee “works extraordinarily well”. But in 2010, rather more extraordinarily, he was himself filmed by undercover reporters – this time from Channel 4’s Dispatches – offering his services to a fake lobbying company, though he told them he would do no lobbying personally. Mr Flynn says that the Commons’ public administration committee wanted to veto Lord Lang’s appointment to Acoba, but could not do so because it had already been announced. Instead, it has this year published a report calling for the entire organisation to be scrapped.
This week’s scandal seems sure to hasten that event. But replacing Acoba will be complicated. Those exposed yesterday have enjoyed careers for life and lavish pensions – one more reason why their conduct is so questionable. But younger civil servants and officers no longer have such luxuries. If they are to be able to support themselves, any new system must allow them to transfer between employers without penalising them for their periods of public service.
More broadly, yesterday’s disclosures might trigger a wider reappraisal of Britain’s reverence for its top military officers. The brass are among the few senior public servants still relatively immune from public criticism, with the monumental failures of Iraq and Afghanistan customarily blamed on dishonest politicians or cheese-paring officials. In fact, many of the most pig-headed mistakes were made by Britain’s military leadership.
Yet old generals can also be a vital check and balance in the system: protesting against defence cuts, criticising the Government when it strays off course. Ministers will love it if they are banned from the MoD’s precincts, as the current Defence Secretary, Philip Hammond, suggested yesterday, but the Forces may well come to regret it. Still, should that happen, the generals really will have no one to blame but themselves.