Saturday, December 24 2005 18:29 Hrs (IST) - World Time -

New Delhi: The empowered Group of Ministers today (Dec 24, 2005) gave its approval to Air-India's proposal to purchase 68 aircraft after completing final round of price negotiations with US manufacturer Boeing, which has offered massive discounts on the total value of the deal.

Besides a huge discount on the total price of around Rs 35,000 crore, Boeing has also offered to set up MRO (maintenance, repair, overhaul) and training facilities in India at a cost of around USD 205 million.

After a five-hour long meeting that eGoM and AI officials held with Boeing representatives, Civil Aviation Minister Praful Patel told reporters that the documents would now be sent to Prime Minister Manmohan Singh for final approval.

Patel had earlier informed Parliament that the deal would cost Rs 38,900 crore.

The eGoM, headed by Finance Minister P Chidambaram, has Law Minister H R Bhardwaj and Programme Implementation Minister Oscar Fernandes and Patel as members.

Official sources said AI has converted its options to buy 16 aircraft into a firm order, taking the total number of firm orders to 50. It is also acquiring 18 more aircraft for its subsidiary Air-India Express.

The fleet would comprise eight Boeing 777-200 (Long Range), 15 B777-300 (Extended Range) and 27 B787s, besides 18 Boeing 737-800s for Air-India Express.

The AI Board has selected engines for all the 68 aircraft from the CFM International, a 50:50 joint venture between Snecma of France and General Electric Aviation of the US.

The two proposals were cleared by the Public Investment Board on October 13.