However, the state-run operator will only be able to exercise its powers of autonomy in terms of investment in projects and forming joint ventures after its board is restructured by inducting at least three non-official directors. According to sources, the restructuring of the AAI board has been pending for a year.
The status was conveyed to the Ministry of Civil Aviation yesterday by the Department of Public Enterprises (DPE) and the Ministry of Heavy Industries.
According to DPE's guidelines, a category-I mini-ratna company is allowed to incur capital expenditure on new projects, modernisation, purchase of equipment without government approval up to Rs 300 crore (Rs 3 billion), or equal to its net worth, whichever is lower. Currently, AAI has to seek government approval for any project exceeding Rs 150 crore (Rs 1.5 billion).
This apart, the operator will be allowed to establish joint ventures (JVs) and subsidiaries in the country, with the stipulation that its equity investment in the JV should be limited to Rs 100 crore (Rs 1 billion) in any one project, should not exceed 5 per cent of the net worth of the public sector enterprise (PSE) in any one project, or 15 per cent of the net worth of the PSE in all JVs or subsidiaries put together.
It, however, has to be finalised with the concurrence of the civil aviation ministry. It will also be allowed to enter into technology JVs, strategic alliances and to obtain technology and know-how by purchase or other arrangements, subject to government guidelines.
According to the civil aviation ministry's statement, AAI fulfils the criteria laid down for granting the mini-ratna category-I status relating to continuous profit for last three years and positive net worth.
AAI earned a profit of around Rs 1,000 crore (Rs 10 billion) for the financial year 2007-08, out of which it paid a total dividend of Rs 216 crore to the government.
AAI has been provided with budgetary support only to implement government-sponsored projects of national interest and research and development projects which do not disqualify it from the status. However, in such projects, investment decision will be taken by the Government and not by AAI.
