invitation for dry lease of used fifteen (15) …mmd.airindia.co.in/aimmd/tender/tender for...

HMM/16/A320 USED//LEASE/ENQ-003 DT.08.01.2016

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INVITATION FOR DRY LEASE OF

USED

FIFTEEN (15) AIRBUS A320-214 AIRCRAFT

Maximum Upto 6 Years Age

FITTED WITH

CFM56-5B4/3 ENGINES

NEW DELHI

JANUARY 2016


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INTRODUCTION

1. AIR INDIA LIMITED

Air India Limited (AI) is a scheduled operator, fully owned by the Government of India.

AI was one of the launch operators of A320 aircraft and purchased 31 aircraft during the years 1989 to 1993 fitted with IAE V2500-A1 Engines. Again, during 2006 to 2010 AI purchased 43 A320 family aircraft including 4 A320 aircraft fitted with CFM 56-5B Engines.

Subsequently, as part of its fleet replacement, AI has inducted 5 new A320 aircraft on dry lease in 2015 and has firmed up the induction of 14 A320 NEO aircraft fitted with CFM LEAP 1A26 engines – for deliveries commencing from 2017 upto 2019.

AI’s present fleet of 120+ aircraft has a mix of Boeing and Airbus aircraft in its fleet. Majority of the aircraft maintenance, engine overhaul and components’ repair is performed by its 100% subsidiary, Air India Engineering Services Ltd (AIESL) in-house. AI’s maintenance facilities are approved by the Director General of Civil Aviation (DGCA) of India, the civil aviation regulatory authority of India. Its engine overhaul facilities and ATEC facility, and many other component overhaul shops are also approved by FAA / EASA.

2. PURPOSE

AI intends to dry lease upto 15 (FIFTEEN) used A320 aircraft –- with or without sharklets powered by CFM56-5B4/3 engines, with an all economy seating of 180 seats. The aircraft should be zero to six years of age and the lease term would be for a period till the aircraft attains the age of 12 years.

Delivery schedule is indicated in the Indicative Delivery Schedule at Annexure-II (T1). Early deliveries, if any, may be accepted.

Note: To fulfill the requirement of inducting 15 A320s on dry lease in 2016-2017, AI is seeking

aircraft in either the used or new aircraft (CEO or NEO) category, or combination of both, through separate simultaneous tenders.

AI is seeking bids separately for dry lease of upto 15 NEW A320 CEO/NEO aircraft with Sharklets powered by CFM56-5B4/3 (for CEO) or CFM LEAP 1A26 (for NEO) Engines.

With the two separate tenders for used aircraft and new aircraft, respectively, AI plans to fulfill its total requirement of 15 A320 aircraft.

AI reserves the right to select either USED aircraft or NEW aircraft or a combination of both or reject fully or partly any bid submitted pursuant to this tender.

3. STRUCTURE OF THE DOCUMENT

1 Annexure I General Terms and Conditions

2 Annexure II (Comprising of T1,T2, T3, T4, T5, T6, T7, T8, T9, T10) Technical Bid Requirements

3 Annexure III (Comprising of F1, F2, F3, F4, F4A, F5) Financial Bid Requirements

4 Annexure IV Integrity Pact


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Please complete the Annexures as provided in this tender with the required information and submit as a part of the bid.

4. SUBMISSION

Bidders are required to submit their bids in HARD COPIES in two separate sealed envelopes consisting Technical Bid and Financial Bid duly super-scribing “Tender No. HMM/16/A320 USED//LEASE/ENQ-003

(Technical Bid)” and “Tender No. HMM/16/A320 USED//LEASE/ENQ-003

a. (Financial Bid)” respectively.

NOTE: The bids should be submitted duly filled in the bid formats specified in this tender. b. The envelope containing Technical Bid must also contain the Integrity Pact duly signed as per details

in tender document. Additionally, scanned copy of the technical bid in PDF format may be provided in CD / SD (Secure Digital) Card inside the envelope marked “Soft Copy of Technical Bid”.

c. There should be no indication whatsoever, of any pricing information in the Technical Bid. d. The envelope containing Financial Bid may also contain, scanned copy of the Financial Bid in PDF

format CD / SD (Secure Digital) Card inside the envelope marked “Soft Copy of Commercial Bid”. These two separate sealed envelopes containing the Technical Bid and Financial Bid, shall further be sealed in another master envelope, duly super-scribed with the tender reference No. HMM/16/A320

USED//LEASE/ENQ-003

e. , due for opening on 08.02.2016 and should be submitted in the tender box placed at the address given below. Last date of receipt of bids is 08.02.2016 latest by 1430 hours IST.

Office of Executive Director (Materials Management) Materials Management Department Air India Limited Safdarjung Airport, New Delhi – 110 003 INDIA

Attn: Mr. M.L. Krishnamoorthi Dy. General Manager (MM) Phone: +91 11 2462 6579

f. Bids should be submitted on Company’s letterhead, duly signed and stamped on every page by

authorized signatory of Bidder’s company. g. After downloading this document, please communicate your intention to participate in this Tender-

with your name, telephone number, postal and email address to the following email IDs:- [email protected]; and [email protected]

h. AI is not responsible for the quotation lost in transit or not received in time including postal delay.

mailto:[email protected]



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IMPORTANT INFORMATION TO BIDDERS: a. Last date for receipt of quotation at the address below, is 08.02.2016 at 1430 Hrs. IST. b. Technical quotes will be opened on 08.02.2016 at 1500 Hrs. IST in the office of:

Office of Executive Director (Materials Management) Materials Management Department, Air India Limited, Safdarjung Airport, New Delhi – 110 003, INDIA Attn: Mr. M.L. Krishnamoorthi Dy. General Manager (MM) Phone: +91 11 2462 6579

c. Any queries with regard to this tender may be addressed to:

d. Any amendments to tender document/ extension of closing / opening date will be displayed on our website, www.airindia.in and no separate communication will be sent in this regard.

e. If bidders so desire, duly authorized representative of their Company can remain present at the time

of the opening of the tenders. The representative must carry an authority letter from company’s authorized signatory for participation in the tender opening.

f. The opening date of financial bids will be intimated later after evaluation of technical bids.

For Technical Information Mr. T. C. SHARMA

General Manager (Engg.)

Air India Engineering Services Ltd

201, G 5 Building, opp. IGI Airport (T1)

New Delhi – 1100037, INDIA

Phone: +91 11 25673417

E-mail: [email protected]

For Terms & Conditions of this Tender Mr. M. L. KRISHNAMOORTHI Dy. General Manager (MMD) Materials Management Dept., Air India Ltd. Safdarjung Airport, New Delhi – 110 003, INDIA

Phone: +91 11 24626579

E Mail :[email protected]




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ANNEXURE - I

GENERAL TERMS AND CONDITIONS

(Clause Nos. 1 to 14: Mandatory requirements) 1. Bids received through fax and email (in encrypted or any other form) will not be considered and

summarily rejected (only sealed tender will be accepted), only Hard Copies will be acceptable. 2. Offers shall be acceptable only from Manufacturers / Airlines / Operators / Lessors of International

standing and repute owning or leasing aircraft. The offers from Agents / Brokers would not be entertained.

3. The offers should be accompanied by proof of ownership, if owner, otherwise documentary proof

that Lessor has assignment rights on the aircraft offered for lease. In case the offer is from the company or firm managing the lease, the same should be accompanied by documentary proof specifying the Authority for each aircraft offered to manage the lease of aircraft offered.

4. Financial Bids of only such Bidders shall be considered whose Technical Bids are found to be

qualifying by Air India after completion of Technical Bids’ evaluation. 5. The Lessee should be permitted to sub-lease the aircraft to its subsidiaries and /or Associate entities

as also allow charters without requiring prior approvals from Lessor. The Lessee should also be permitted to lease to outside parties with the permission of the Lessor, such permission being not unreasonably withheld.

6. Special Purpose Company (SPC) a. The aircraft should be leased through Ireland based Lessor, for which the bidder to use/set up

such a SPC at its own costs. b. The bidder shall also agree to provide a Parents’ Support Guarantee letter in respect of such SPC

formed as a Lessor.

7. Indian PAN (Permanent Account Number) of the Lessor, issued by Indian Income Tax authorities, under the Indian Income Tax Act of 1961, would be mandatorily required to be provided by the successful Bidder with whom Lease Agreements are finalized.

8. Tax Residency Certificates from the local authorities where Lessor is resident and assessed for

income and other required forms/ declarations / certificates (such as Form 10(F) as per Indian Income tax rules, No Permanent Establishment Declaration Certificate etc) would be required to be provided by the successful Bidder with whom Lease Agreements are finalized to Air India annually / such other periodicity as may be prescribed under Indian Income Tax Law.

9. Contract

a. After evaluation of the offers, AI after approval of its Board of Directors, will enter into contract with the successful Lessor(s) for agreed lease period as per terms and conditions of this tender and the negotiated terms with option to renew for a mutually agreed period and term.

b. Offered Aircraft and related documents shall be made available by the selected lessor(s) to the representatives of AI for inspection:

i. Prior to signing of LOI.


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ii. Before the aircraft is/are accepted. The aircraft will be taken on lease only after it is inspected and accepted by AI.

c. The Bidder to confirm that it has obtained their required approvals to offer the subject aircraft under this tender.

10. Integrity Pact

The parties are required to sign and submit the enclosed Integrity pact (Annexure-IV) along with the offer. It will be noted that the contents of this Integrity Pact is as per the regulatory requirements and hence, no changes to the contents are permissible. Also, refer attached brief on Integrity Pact and Independent External Monitor (IEM). Shri Pratyush Sinha is the IEM and his contact details are as under:

Mobile : +91 9868116811

E-mail : [email protected] 11. Price

a. Price refers to the offered Fixed Monthly Aircraft Lease Rentals and the performance based (Flight hour and cycles) Maintenance Reserves, if applicable, towards Restorations & Heavy Maintenance Charges more appropriately explained in the Financial Bid formats at Annexure-III (F1 and F2).

b. All amounts to be quoted in US Dollars only. c. In the event of any Bid being received in a currency other than US Dollars, the conversion rate (TC

Selling Rate) published by the State Bank of India on the date of opening of the Financial Bid will be used for evaluation of Bids.

12. Regulatory Agency Clearances

The agreement when executed will be subject to AI and its related Government Approvals such as Reserve Bank of India, Ministry of Finance, Export / Import approvals and DGCA, India.

13. Warranty

All available warranties and guarantees from the OEMs / others – for airframe, engines, APU and components – have to be assigned to AI. A list of all such warranties and guarantees to be provided in the bid. The warranties and guarantees applicable/available including the guarantee levels/parameters, compensation amounts for exceeding the guarantee levels, attached conditionality’s etc needs to be disclosed to Air India in the technical bid.

14. Security Deposit

a. Any Security Deposit required by the Lessor will be given by AI on signing of the Lease Agreement in the form of Standby Letter of Credit (SBLC) to be issued / confirmed by international bank of repute acceptable to Lessor since payment of advance deposits are restricted as per the regulations of Reserve Bank of India.

b. No other guarantee will be offered, other than the SBLCs towards security deposit. c. In case the bidder requires Security Deposit in Cash on or after signing of the Lease Agreement,

the bidder should be agreeable to provide a Counter-bank guarantee to be issued / confirmed by International Bank acceptable to Lessee, valid till the delivery of aircraft to AI, commensurate to such amount subject to such guarantee being enforceable in India.


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d. At the time of execution of LOI, if required, AI will give initial deposit by way of SBLC or Cash upto maximum of US $ 50,000 per aircraft. Such initial deposit shall be adjusted against the Security Deposit payable to the Lessor at the time of Lease Agreement. If for any reason the Lease Agreement is not concluded, such initial deposit shall forthwith be refunded unconditionally in full to AI. Wherever initial deposit is given in Cash, the same shall either be substituted with SBLC on signing of the Lease Agreement or should be covered by a Counter-bank guarantee to be issued / confirmed by International Bank acceptable to Lessee, valid till the delivery of aircraft to AI, commensurate to such amount subject to such guarantee being enforceable in India.

e. All Security deposits would be refundable in full upon termination or at the lease expiry. f. For the Initial deposit / Security Deposits requirement for dates earlier than the Aircraft Delivery

dates, in case cash security deposit is required, the selected bidder(s) would be agreeable to provide enforceable Undertaking/Indemnity/Guarantee valid for the said period against such deposit requirements till the Delivery of aircraft.

15. Manufacturer’s Credits All the Manufacturers Credits against purchase of aircraft by the Manufacturer to be passed onto/assigned to Air India. The details of such credits/concessions and the value of such concessions/credits needs to be given in the Financial bid only.

16. MSN of the Offered aircraft

The Bidder should provide MSNs of the aircraft offered for lease in the Annexure-II (T5), forming a part of the Technical Bid.

17. Tender Acceptance

a. The bidder should be agreeable to AI opting to lease less number of aircraft than the number of aircraft offered by the bidder, without changing the rate, terms & conditions.

b. The acceptance of the tender bids is subject to AI receiving approvals from Regulatory/Government authorities and its Board.

c. AI reserves its right to terminate the process of tendering at any stage, and not to proceed further at its discretion, without assigning any reason thereof.

d. AI reserves the right to accept or reject any quotation partially or in its entirety without assigning any reasons whatsoever.

e. AI reserves the right to finally accept the bids so as to achieve its aim of leasing upto Fifteen (15) A320 aircraft. AI would require to lease a minimum of at least three (3) aircraft, with identical configuration, from one Lessor. Accordingly, AI reserves the right to award the contract to one or more Bidders subject to the evaluated terms being acceptable to AI. The decision of AI to lease or not to lease aircraft from the bidders would be at its sole discretion and final.

18. Lease Agreement - draft It is desired that the Bidder submits a copy of their DRAFT lease agreement along with the Technical Bid, without the commercial details filled in.

19. Insurance

a. The aircraft will be insured by Lessee, with total liabilities not to exceed USD750 million and with deductible limit of USD 750,000.

b. Bidder is required to indicate Insurance Value of each aircraft in USD at Annexure-III (F2). c. The bidder has to provide annual reduction in insurance value in the Annexure-III (F2) Financial

Bid.


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20. Notification Any liquidation/merger/take over/amalgamation of Head Lessor/Owner/Lessor in the case of successful bidder should be intimated to AI. In such an eventuality, AI reserves the right to continue/discontinue the contract including treating such change as Termination Event in terms of Point no.23 of this Tender.

21. Jurisdiction

All disputes and differences arising out of this tender shall be subject to the jurisdiction of Courts of New Delhi, India. However, if required by bidder, this can be considered at Courts of London, UK.

22. Arbitration

Any dispute arising between the parties in respect of the construction, interpretation, application, meaning, scope, operation or effect of this document or the validity or breach thereof, shall first be settled by mutual consultation. If the dispute remains unresolved after a period of 90 days from the date when the mutual consultation has started, the matter shall be referred for settlement to "SCOPE FORUM OF CONCILIATION AND ARBITRATION", Government of India and the award made in pursuance thereof shall be binding on the parties.(http://www.scopeonline.in/about.htm). However, if required by bidder, this can be considered at Singapore.

23. Termination

The Lease Agreement would be terminated under the following conditions: a. By giving six months’ notice on either side. b. In the event of Lessor’s failure to meet the contractual obligations, including delayed deliveries,

AI will be at liberty to terminate the contract with a notice of three months. c. Early exit offer be provided in the financial bid for exit beyond certain minimum lease period,

indication to such offer having been made without values can be given in the technical bid itself. A buy-out option for early exit/end of lease be also offered in the financial bid.

24. Validity of Offers Offers should be valid for a period of at least 180 days from the closing date of tender to be mutually extended by both parties in case the need arises. NOTE:- In certain cases, the acceptance of the offer would be subject to AI obtaining prior approvals of the Govt., in which case, the extended validity of bid for obtaining such additional approvals could be required by AI.

25. Terms that are not covered in this tender or terms offered, which are at variance with the terms of the tender must be clearly specified in Annexure: II (T8): Variance – General and Technical Terms & Conditions and Annexure-III (F3) : Variance-General and Financial Terms & Conditions.

IMPORTANT:

1. Bidders are requested to confirm their acceptance of the above terms and conditions in Annexure

II - (T10), and Annexure-III (F5) (covering letters from bidder to Air India Limited for submitting Technical and Financial bids).

2. Non-compliance to any one of the Mandatory conditions (Clause no. 1 through 14) stipulated above would lead to disqualification of the bid.

http://www.scopeonline.in/about.htm


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ANNEXURE - II (T1)

TECHNICAL BID REQUIREMENTS

A. REQUIREMENT FOR LEASE-IN OF A320 AIRCRAFT

SR. NO.

ITEM AI REQUIREMENTS

BIDDER’s OFFER (Specify information in

individual rows - please do not leave blank)

01. Aircraft for Dry Lease Used A320-214 aircraft: Upto Fifteen (15)

(Please also refer to Note under Para 2 of Introduction on the first page)

Max. age at Delivery: Six (6) yrs.

Note: Bidder to mention the number of aircraft offered with individual MSN Nos. and proposed dates of delivery.

02. Lease Period The aircraft should be zero to six years of age and the lease term would be for a period till the aircraft attains the age of 12 years.

Note: Bidder to indicate manufacturing date for each aircraft offered.

03. Indicative Delivery Schedule

NOTES:

1. AI seeks to induct 15 aircraft with deliveries commencing from Q3 of 2016 with an indicative maximum of upto 3 aircraft units per quarter and the delivery of all 15 units to be completed not later than Q4 of 2017.

2. Response should indicate the no. of aircraft offered month-wise in each quarter. Offers for deliveries deviating from the indicative schedule would be subject to specific acceptance by AI against its requirements.

3. Earlier deliveries, if offered, are acceptable.

4. Aircraft deliveries offered beyond 31st December 2017 will not be considered.

5. In case of any delay in deliveries, the bidder offer to compensate for such

Indicate Number of offered A320 aircraft with delivery month

In 2016 Q3 Q4

In 2017 Q1 Q2 Q3 Q4


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delayed delivery. Such compensation amounts should be indicated in the sealed financial bid.

B. A320 AIRCRAFT TECHNICAL REQUIREMENTS

SN ITEM DESCRIPTION CATEGORY Specify YES/NO

01. Engine type CFM56-5B4/3 MANDATORY

02. APU Type Honeywell Model No. 131-9A MANDATORY

03. SBs/ADs compliance Must have complied with all Airworthiness Directives (ADs) issued by FAA, EASA or State of Design and Mandatory Service Bulletins issued by OEMs as applicable to the aircraft, Engine, APU and installed Equipment, falling due as on delivery and within 6 months of the date of delivery.

MANDATORY

04. Cabin Configuration a. All Economy Configuration of 180 identical seats from same manufacturer with seat pitch around 29-28 inches.

b. AI being full service airline, Two ATLAS standard Galleys i.e. G1 (FWD) & G5 (AFT) with Standard Inserts like Convection Ovens (Qty 6), Hot Cups (Qty 2), Beverage Makers (Qty 4), Water heater (Qty 1) and with 11 (eleven) Full size Meal Trolleys. (Note: Specify qty. of each galley insert on offered aircraft in the column)

c. Lavatories: 3 (three). d. No In-Flight Entertainment system

MANDATORY

Galleys G1+G5

Convection Ovens

06

Hot Cups 02

Beverage Makers

04

Water Heater

01

Full Meal Trolleys

11

05. MTOW 77 Tons MANDATORY

06. Metric Units Aircraft Instrumentation and Technical documents like AFM etc., in Metric units (Fuel, Aircraft weights, Fluids).

MANDATORY

07. External Painting Aircraft to be painted in Air India’s livery MANDATORY

08. Cockpit Door Enhanced Security Measures

(i) At delivery, the aircraft must meet FAA Phase–II modification requirement to install a reinforced and bulletproof cockpit door that meets the new FAR 25-795

MANDATORY


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requirements (or its equivalent requirement)

(ii) Cockpit Door Surveillance System Modification must be complied with.

09. Sharklets DESIRABLE

10. Automatic fixed ELT

Impact activated ELT is an additional requirement for aircraft operating in India. This is a fixed ELT meeting TSO C91a requirements. The ELT shall have an external fixed antenna and capable of transmitting on 121.5, 243 & 406 MHz with remote control panel installed in the cockpit.

MANDATORY

11. Survival ELT Qty 2 MANDATORY

12. ETOPS / EDTO 120 minutes ETOPS / EDTO Approval MANDATORY

13. Usage of PMA and DER Repairs

There should be no history of usage of PMA parts and DER repairs on the offered aircraft, engines and components.

MANDATORY

14.

SCN and BFE Lists on the Offered Aircraft

Bidders are required to indicate variance at ANNEXURE II (T8) in the SCNs and BFEs lists of the offered aircraft as compared to the attached SCN and BFE lists Note: SCN and BFE Lists are appended as Appendix-1 (SCN list) & Appendix-2 (BFE list)

DESIRABLE

15. Cabin & Cockpit Emergency Equipment

Note 1: Part No. of the equipment may be at variance. And may be indicated at ANNEXURE II (T8). Note 2: AI’s current A320 aircraft Emergency Equipment list is provided as Appendix-3 for reference.

MANDATORY

16. Cargo Ventilation & Heating System

For Aft Cargo hold MANDATORY

17. RNAV / RNP 1, 5 & 10 Offered aircraft to be Certified for the required RNAV/RNP levels

MANDATORY

18. RNP 0.3 AR

Offered aircraft to be Certified for required RNP level

MANDATORY

19. CAT III B Compliance MANDATORY

20. Commonality with AI fleet aircraft in respect of specific

Part No. of the specific items

DESIRABLE


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Items as below

Note: Commonality of following items is desirable on the offered aircraft for their interchangeability.

a. Main Wheels

P/N: C20195162 (MESSIER) If Lessor’s P/N are different then Lessor to provide AI’s P/N along with retrofit SB from AIRBUS.

b. Nose Wheel

P/N: 3-1531-3 (GOODRICH)

c. Brakes

P/N: C20225510 (MESSIER)

d. Cooling Fan

P/N: RU1502U01 (Technofan)

e. Escape Slides

P/N as per Emergency Items List given at Appendix 3

21. High Altitude, Runway Slope, Tailwinds Certification

Offered Aircraft must have: (i) Certification for operation to Leh

Airport (up to 12,000 ft) (ii) Certification for operation to Leh

Airport (Runway slope between 2 and 3%)

(iii) 15 Knots Tail winds certification for Landing and Take- off Operation

DESIRABLE

22. Toilets, cabin crew and passengers Oxygen system

Oxygen supply to be sufficient for 22 minutes. Note: Above is required for operation to LEH airport.

DESIRABLE

C. OTHER MADATORY EQUIPMENT / FEATURES :

01. SSCVR Bulk Erase Facility Deactivated

MANDATORY

02. TCAS 7.1 With Elementary and Enhanced

Surveillance functions

03. SSFDR Complying with ICAO Annex 6

parameter recording capability

04. EGPWS Capable of GPS Lateral position

05. MMR (Multi-Mode Receivers)

Providing ILS (FM immunity) and GPS C1 functions

06. ACARS Must be activated (Preferably with

Honeywell AOC)

07. ADS-B Must be validated and certified

08. Triple VHF

09. WQAR

10. Single HF Communication System

Preferably with Data link capability

11. Escape path marking (EEPMS) & Exit Signs

EEPMS - preferably from LUFTHANSA TECHNIK - 900

IMPORTANT: ‘NO’ to even one of the MANDATORY requirements shall lead to disqualification of the bid.


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ANNEXURE - II (T2)


MAJOR DELIVERY REQUIREMENTS:

1. Airframe: a. The Aircraft shall be clean by international airline standards; b. Be fresh from Block C check (or equalized) and all lower checks

due per the then current Airbus’ MPD will be completed. c. 6-Yearly inspection will be required to be complied at the

Lessor’s costs, if falling due in 12 months from delivery date. d. The delivery check will be completed by an EASA or FAA

approved MRO. Any deficiencies, including, without limitation, routine items, non-routine items and all corrosions, known prior to or revealed during such inspection will be corrected in accordance with manufacturer’s limits, guidelines and specifications and no deferred or carryover items shall exist.

e. The Aircraft shall be in a condition permitting commercial revenue service under the applicable operating regulations of the DGCA of India from the first day of lease.

2. Engines: a. Each of the engines shall be in serviceable condition, shall have

done no more than 2,000 Flight Cycles since last Performance Restoration Shop Visit, and shall be having EGT margin not less than 400 C.

b. No Engine shall be ‘on watch’ for SB compliance or AMM limit including oil consumption/leak limits or reduced inspection interval based on the last Borescope inspection including HPC and HPT harsh Environment limitation for reduced borescope limit as per SB 72-849( If applicable).

c. Full video Borescope inspection in accordance with AMM by an approved person with a copy of video. Additionally, written Borescope report with appropriate maintenance release to be provided at Lessor’s cost. Trend monitoring data of engines for last one year should be provide

3. Engine LLPs:

No less than 7,500 Flt. Cycles remaining until the next removal.

4. Other Life Limited Components:

All Other Life Limited Parts (excluding the Engine LLPs) shall have a minimum of 5,000 Flt Cycles or 8,000 Flt Hours or 24 months remaining to the next removal.

5. Landing Gear: No less than 48 months or 10,000 Flt Cycles life remaining until the next Overhaul (per Airbus’s MPD limitations).

6. APU: a. In serviceable condition.

b. No more than 2,000 APU Hours since last APU Basic Shop Visit; each life limited part will have not less than 2,500 APU Cycles


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remaining life per manufacture’s life limits.

7. Hard Time Component:

a. Each hard time component shall have no less than 8,000 Flight Hours or 5,000 Flight Cycles or 24 months remaining to the next removal, per the Airbus MPD.

b. Hard time, on condition/condition monitoring components installed on the Aircraft at delivery, shall have FAA8130-3 Form or EASA Form 1.

c. No component shall have accumulated more flying hours/cycles than the airframe flying hours/cycles.

8. Other Conditions:

9. Inspection of offered aircraft and documents

10. Demonstration Flight

Mandatory MPD tasks having compliance date falling within 12 months or equalized period after the Delivery Date shall be complied by the Lessor before delivery.

The Lessee or its representatives should be allowed for physical

inspection of the Aircraft so as to conduct the following:

(a) Inspection of the Manuals and Technical Records; (b) Inspection of the Aircraft Structure and Parts at the time of

the Heavy Maintenance check (C Check / 6Y HMV) prior to Delivery;

(c) Inspection of the Engines & APU including without limitation:

- A Video Borescope inspection as per AMM - Engine Max Performance Assurance Run

Lessor will provide a 2-hours demonstration flight with Air India’s representatives on board as observers, on lessor’s expenses including post demonstration test borescope of engine at lessor’s cost at lessor site.


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ANNEXURE - II (T3)


A. AIRCRAFT DOCUMENTS / DATA

Following aircraft documents/data are required at the time of delivery of the aircraft: 1. Standard package of technical data for normal airline flight operations and maintenance planning

(hard & electronic copies). The electronic format of the data should either be in sgml/xml format. Access to download manuals through Airbus World Portal should be provided. / CFM should be provided for Air India and AIESEL.

2. Components lists: (i) List of all Life controlled components-- with back to birth history (ii) List of all serialized components

3. Updated list of SBs and ADs incorporated in the aircraft and engines 4. AD Compliance Records 5. SB Compliance Records 6. Maintenance Program followed 7. Maintenance Program Compliance Record 8. Snag / Defect Rectification Record for last 12 months 9. Engine Health monitoring records for last 6 months, Shop visit reports including LLP list and video

borescope report etc. 10. A320 flight data parameter library document 11. MPD, MEL, CDL, Weight & Balance Manual 12. CMMs of BFE equipment such as Galleys, Passenger Seats, Impact & two Water activated ELTs. 13. Emergency Equipment List, their description and layout diagrams 14. Power Plant IPC – 2 copies and a CD 15. Power Plant Shop Manual – 1 copy 16. LOPA 17. Database for DFDR recorded parameters, etc. 18. Certificates required:

i. C of A ii. Export C of A

iii. Certificate of Release to Service (CRS) iv. Noise Certificate v. Aircraft Emergency and Safety Equipment List

vi. Valid Radio Station license vii. RVSM Capability

viii. CAT-II / IIIA / IIIB operational Capability ix. Weight Schedule x. RNP 0.3 AR, 1, 5 & 10 Capability

xi. RNAV 1, 5 &10 Capability xii. EDTO Capability (120 minutes)

19. At the time of delivery of the aircraft, Lessor will provide - at their cost- at least two complete sets (hard copies and CDs) of Aircraft and Engine Manuals. Four sets of Flight Manual and three sets of FCOM & QRH will also be provided with each aircraft.


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B. AIRCRAFT ACCEPTANCE AT DELIVERY: Aircraft will be accepted after finding all airworthiness records and other requirements as mentioned in the Annexure – II (T2), satisfactory to AI’s requirement.

C. AIRCRAFT DELIVERY LOCATION

AI prefers to take aircraft delivery at MRO located in Asia or Europe. However, the cost of ferry flight from the offered delivery location to New Delhi, India would be loaded in the financial evaluation.


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ANNEXURE - II (T4)


A. MAINTENANCE DURING LEASE PERIOD

Complete maintenance repair, overhaul, modifications, refurbishments and testing of Aircraft, Engines, APU, aircraft / Engine components including passenger seats, carpet, seat covers, hard time components, OC/CM components, etc. during the lease term will be carried out by AI or its subsidiary MRO under DGCA, India CAR 145 approvals and as per DGCA approved maintenance programme. Note: AI’s engine overhaul facilities and ATEC facility, and many other component overhaul shops are approved by FAA / EASA.

B. MAINTENANCE RESERVES

i. Lessor shall carry forward the cash reserves accumulated in respect of various MR heads from the previous lease to AI. Itemized listing for the MR Contributions with amounts available to AI should be indicated in the financial bid.

ii. MR rates to be quoted in the financial bid format only with economic conditions of 2016.

iii. Maintenance reserves shall be quoted separately for each Maintenance Reserve head (e.g. 6Y Check,

12Y Check, Landing Gears, Engine usage, Engine LLPs and APU) on per aircraft basis and draw down procedure for the same may be listed especially for engines.

iv. % escalation factor (non-compounded) on MRs to be applied based on indices with a formula to be

mutually agreed subject to a maximum cap. The financials be indicated in the financial bid format.

v. The maintenance reserves will be either payable monthly in arrears or through Standby Letter of Credit (SBLCs) renewable annually to be placed by AI towards such agreed MR contributions with mechanism for mutual annual MR reconciliation. Bidder to indicate their offer towards acceptance of SBLC in lieu of MR payments, in the technical bid itself.

vi. Where applicable, the Maintenance Reserves rates should be quoted for 1:1 to 2.5:1 flight-

hour/cycle ratio in increments of 0.25:1 (Table for various combinations of Flight hours/Flight cycles ratio to be provided). The evaluation will be done on the basis of a Hour to Cycle ratio of 1.5:1

vii. MRs accumulated in respect of Airframe, Landing Gear, Engine, Engine LLP & APU will be available

for drawdown & utilized for 6-Year/12-Year Checks, L/G Overhaul, Engine Refurbishment/Overhaul, Engine LLP change & APU Refurbishment/Overhaul respectively.

viii. Lessor shall be liable to release Maintenance Reserves to AI in case of the bids which require MR

contributions to be paid by AI periodically, for performing airframe, engine maintenance, engine LLPs, landing gear & APU maintenance after performance of relevant work. In case any maintenance during lease period is determined as not a qualifying event for reasons such as FOD etc, the rectification of which also entails performance restoration activities otherwise undertaken in qualifying event, the corresponding MRs for such activities shall be refunded to AI. For aircraft


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incident resulting in insurance settlement by way of total loss to Lessor, the balance in MR reserves paid by AI shall be refunded to AI. Further, MR drawdown shall not be reduced by the quantum of guarantee / warranty claims received by AI from the equipment manufacturers

ix. The same should be reimbursed by Lessor on claims/invoices by lessee within 30 days in full to AI

without any deduction, abatement, disallowances on accomplishment of relevant maintenance events claims sent to Lessor. Lessor should also agree to annual reconciliation for MRs.

x. Lessor should also agree to park the funds in a separate Escrow bank account of the funds collected

from theses MRs, in case of cash payments of MRs.

xi. Lessor should agree to allow usage of Engines, APU and components on Air India current fleet and required MRs as applicable and due will be paid. Air India Engines, APU and components usage on lessor’s fleet including lease engine and components.

C. AIRBUS CUSTOMER SUPPORT / CFM CUSTOMER SUPPORT

Manufacturer’s granted customer support shall be extended to Air India, details of which should be

provided in the Technical bid documentation.


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ANNEXURE - II (T5)

TECHNICAL BID (TECHNICAL DETAILS)

A. Bidders are required to provide Basic Technical Details as per format given under TABLE I with regard to

each offered Aircraft. TABLE I

01. Manufacturer Serial No.

02. Date of Manufacture

03.

MTOW MLW MZFW OEW Fuel Tank Capacity

04. Name & address of current operator

05. Current registration details

06. Current location & area of operation

07.

AIRCRAFT Total aircraft flying hours/cycles logged

Reference date: 1ST Jan 2016

Since New

Since last Major Check (Specify the check)

08.

ENGINE Engine Serial Nos. & Date of manufacture

No.1

No.2

Cycles/hours logged by each engine/engine module


Since new No.1

No.2

Since last shop visit No.1

No.2

Type of Shop Visit (Refurbishment/Overhaul/Rectification/Refurbishment) Note: Usage of PMA parts & DER repairs should not have been carried out.

No.1

No.2

09.

APU APU Serial No.

Hours/cycles logged by APU


since new

since last shop visit

10. LANDING GEAR Hours/cycles done by Landing gear


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Reference Date: 1ST Jan 2016

since new

since overhauled

Next scheduled removal due at

11. Details of maintenance program followed and approved by the airworthiness authority of country of registration

12. Details of accidents/major incidents, if any since new

13. Details of major repairs carried out. Note: Only flush repairs as per SRM are acceptable.

14. Lists of all major inspections carried out like CPCP, Structural inspections, etc.

15. ETOPS status

16. ILS Cat. II/III certification status

17.

CABIN DETAILS

(i) Seat configuration

(ii) No. of cabin crew seats

(iii) No. of bassinet location

(iv) No. of Toilets

B. Bidders are required to ensure that the following documents under TABLE II have been enclosed along

with the bids. TABLE II – Checklist for DOCUMENTS to be attached

SN ITEM CONFIRM

01. Enclosed Pre Signed Integrity Pact Yes No

02. Enclosed Documentary proof for ownership/Authority to offer the Aircraft (if not owned)

Yes No

03. Audited Summarised Financial Statements of the company for the last three years

Yes No

04. Last three years Annual Report with Directors Reports Yes No

05. SCN, BFE, Emergency Equipment lists in respect of offered Aircraft

Yes No

06. Statement declaring Mandatory Compliances for individual terms of the Requirements stated at Sr.no. 1 to 14 of the Annexure-I containing General Terms and conditions.

Yes No

Signature:

Name:

Designation:

Company Stamp:


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ANNEXURE - II (T6)

TECHNICAL BID (REDELIVERY CONDITIONS)

AI would redeliver the aircraft as per the following redelivery conditions. At the time of return of the Aircraft to the Lessor as provided for in the Lease Agreement, the Aircraft shall be in the same configuration, or in such a configuration as approved by Indian DGCA, with all on-board equipment as delivered by the Lessor to the Lessee, subject to normal wear and tear, and to meet the following conditions: 1. GENERAL CONDITIONS

The Aircraft shall be redelivered in India. The Aircraft shall have been maintained and repaired in accordance with the Maintenance Program, approved and authorized by Indian DGCA, as if such Aircraft were to be kept in further commercial service by the Lessee and shall meet the following requirements:

i. The Aircraft shall be clean by airline standards;

ii. The Aircraft shall be in a condition permitting commercial revenue service under the applicable

operating regulations of the DGCA of India;

iii. The Aircraft shall have in existence a valid and existing certificate of airworthiness issued by the DGCA of India and an export certificate of airworthiness issued by the Aviation Authority to a country specified by the Lessor. The cost of any unique requirements imposed by the Aviation Authority of the importing country will be borne by the Lessor;

iv. The Lessee shall comply with the Manufacturer’s specifications as amended from time to time by

mandatory service bulletins;

v. The Aircraft shall be returned with the fuselage and fin repainted in neutral white and with no airline markings, identities or logos visible at redelivery with AI Certification;

vi. Redelivery conditions will be predetermined between the selected Lessor and AI and will be finalized at

the time of entering into Lease Agreement;

vii. In case of delay in redelivery of the aircraft, – ascribable on account of the lessee only, lease rental would apply on pro-rata per diem basis till the actual redelivery of the aircraft, at the lease rate which would be agreed in the final lease agreement. No penal lease rental should apply for such delays in re-deliveries.

viii. At the time of redelivery of aircraft, AI may compensate with a negotiated financial amount against

the non-compliance of any or all of the redelivery conditions based on the then applicable rates as at the end of lease. Upon technical acceptance of such compensation for buy-outs/End of Lease compensation, the bidder should be agreeable for waiver of lease rentals from the date of such acceptance. Pending settlement of compensations for deficiencies between the parties, aircraft to be taken back by lessor immediately upon being offered by AI.


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ix. As an option, six months prior to the expiry date of the Lease, the aircraft shall be made available for each of the Lessor and AI to perform a preliminary inspection of the aircraft, engines and records to determine the redelivery work-package. The condition of the aircraft (including APU, engines and records) shall be documented as a reference for any deviations at the end of the Lease Term. The aircraft (including APU, engines and records) shall be made available for such preliminary inspection. Selected Bidder and AI may mutually agree on the buyout amount in lieu of any stipulated redelivery conditions not being met.

x. Lessor should accept the redelivery maintenance check of the aircraft being performed at AI’s in-

house facility under the Indian DGCA approved system vide CAR 145.

xi. Lessor should accept engine refurbishment/Performance-Restoration Shop Visit at AI’s in-house facility. AI presently has FAA and EASA approval for CFM56-5B engines.

xii. Lessor should accept APU refurbishment/overhaul at AI’s in-house facility, as and when it becomes

FAA/EASA compliant for Honeywell Model No. 131-9A APU.

xiii. AI has in-house facility for servicing of large number of Airframe & Engine components (hard time, OC/CM) while the rest are serviced abroad at OEM, or FAA/EASA approved facilities. The lessor should accept components serviced at in-house facility with release certificate issued under the Indian DGCA approved system.

xiv. Mandatory MPD tasks/SBs/ADs received during the redelivery checks/shop visits having compliance

date falling after redelivery date but within the stipulated period in the lease agreement, shall be complied by AI on account of the lessor. Also, if this compliance results in extension of the lease period, no lease rental shall be payable by AI.

xv. Compliance/acceptance of all the above items should be expressly indicated in the offer. The

conditions which are not acceptable should be clearly spelt out in Annexure- II (T8) i.e. Variance – General and Technical Terms & Conditions, failing which it shall be presumed that the requirements listed above are accepted.

2. ENGINES Each of the engines shall be returned in serviceable condition. Further Engine LLPs will have a minimum

balance life of 1,500 Flight Cycles and EGT margin of 400 C. No Engine will be ‘on watch’ for any AMM limits or reduced inspection interval based on the last borescope inspection. [In the event that the engines do not meet this specification, the Lessee shall compensate the Lessor after averaging between both the engines at the then current manufacturer’s/Lessor’s advised hourly or cyclic MR rate.].

3. LANDING GEARS

Each of the Landing Gear shall be returned in airworthy condition with a minimum of 2,000 cycles/12 months remaining to the next overhaul. In the event that the landing gears do not meet these return conditions, the lessee shall compensate the Lessor at the then current Landing Gears overhaul costs divided by the Landing Gear overhaul life expressed as a cost per cycle or per month.

4. Cockpit and Cabin (a) All decals shall be clean, secure and legible; (b) All fairing panels shall be free of cracks, shall be clean, secure and repainted as necessary; (c) Floor coverings shall be clean and effectively sealed;


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(d) Seat covers shall be in good condition, clean and shall conform to the Aviation Authority fire resistance regulations;

(e) Seats shall be fully serviceable and shall be repaired as necessary. 5. Cargo Compartments (a) All panels shall be in good condition; (b) All nets shall be in good condition.

6. Documentation (a) At the time of any such return of the Aircraft, the Lessee shall deliver to the Lessor one (1) copy of each

of the Manuals and Technical Records. (Including current revisions thereto). (b) The information described in the Aircraft Documentation shall be provided to the Lessor at time of

such return of the Aircraft in the form and manner under which the Lessee maintains such information and shall include data peculiar to the Aircraft. The Lessee shall provide the Aircraft Documentation in English. All Aircraft Documentation provided at the time of such return of the aircraft shall be listed and described by the Lessee’s title or description. The Lessee shall ensure that all Aircraft documentation shall be in good condition, readable and capable of being reproduced using standard reproduction processes, complete and up to date in accordance with industry standards.

7. Inspection

The period allowed for inspection of the return condition of the Aircraft shall have such duration as to permit the conduct by the Lessor or its representatives of the following:

(a) Inspection of the Manuals and Technical Records; (b) Inspection of the Aircraft Structure and Parts at the time of the Heavy Maintenance check; (c) Inspection of the Engines including without limitation:

i. A Borescope inspection as per AMM ii. Engine Max Performance Assurance Run

(d) A two hour (or as otherwise agreed between the Lessor and the Lessee) flight carried out by and at the expense of the Lessee to the Lessor’s requirements with Lessor’s representatives as observers.

NOTE: For evaluating the bids having variation in the Redelivery Conditions in respect of hours/cycles for each of the above-mentioned items, the difference in quantifiable conditions will be evaluated based on the deviation from the specified redelivery conditions in terms of hours/cycles. Further, impact of such loading/unloading based on the quoted MR rates for the technically qualified bids will be carried out during Financial Bid for determining overall financial evaluation.


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ANNEXURE - II (T7)

BIDDER’S PROFILE (Required For Due Diligence Process)

Note: Give complete information here itself, if additional information is submitted, please refer to the same in these columns, DO NOT LEAVE BLANK.

SN ITEM DESCRIPTION

1.

Name of Company : Nature of entity : Complete Postal Address : Country of incorporation :

2. State specifically whether the Bidder is Owner/Airline/Operator/Lessor Provide definitive documentary proofs in this regard as given below.

3.

Name and address of the Owner of the aircraft, if different from the bidder Also please indicate Ownership/financing arrangement of the aircraft on offer, giving names and addresses of Lessor, Head Lessor, Security Trustee, and Mortgagee, etc.

4.

Contact Details Name : Designation : Tel : Fax : Email :

5.

Details of Proof of ownership/assignment rights/lease manager of the aircraft (Please mention Document details here and attach Copy). NOTE: If bidder is not the owner, please provide documentary evidence of authority to offer the aircraft. AI may verify the above details from Manufacturer/Other sources independently for which Lessor is expected to agree.

6. Bidders’ Fleet Size and Type of fleet details Mention the Numbers, type and values of Aircraft purchased and Leased out with Regional distribution

7.

If the Lessor or its parent company is listed on any stock exchange, identify such stock exchange or exchanges. If neither the Lessor nor its parent company is listed on any stock exchange, provide a list of all shareholders holding more than 5% of the issued share capital of the Lessor or its parent company, as the case may be, and specify their respective shareholdings. (In case of any offer submitted by a Manager of aircraft, similar financial information must be provided in relation to such Manager).


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8.

Please provide :- a. Signed Additional Write up/Summary brief profile of the Company b. Key details of Top Management and Directors c. Audited Summarized Financial Statements of the company for the last

three years duly authenticated by Management of the bidder. d. Last three years Annual Report with Directors Reports.

9. Name of the Main Bank and country of location

10. Contact details of persons at the main bank who will be able to provide reference on request.

Signature:

Name: Designation: Company Stamp:


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ANNEXURE - II (T8)

VARIANCE – GENERAL TERMS & CONDITIONS AND TECHNICAL REQUIREMENTS

The table below lists the summary of exclusions of the General Terms & Conditions and Technical Requirements, Terms & Conditions of this Tender, which are not acceptable in totality. The terms & conditions, which we offer instead, will be as follows:

SN Annexure: ____ Para No. ____ Subject ___________ Our Terms & Conditions

Note: 1. This Annexure is mandatory and in case no variance is to be reported, ‘NIL’ statement must be

submitted in the above format. General Terms & Conditions and Technical Requirements, Terms & Conditions spelt out in Annexures I & II, not detailed above shall deem to have been accepted by the Bidder.

2. SINCE NO VARIATION IS ACCEPTABLE FOR MANDATORY CONDITIONS, THIS VARIANCE

STATEMENT SHOULD NOT BE USED FOR DEVIATIONS/VARIANCES FOR MANDATORY CLAUSES.

Signature: Name: Designation: Company Stamp:


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ANNEXURE - II (T9)

TECHNICAL BID EVALUATION CRITERIA

Subject to Technical Bid meeting all the mandatory conditions as provided in the Annexures I & II, further evaluation of the Bids for this tender will be carried out based on the following :- 1. Annexure-I : Compliance status of General Terms and Conditions by the Bidder 2. Annexure-II : Compliance status of Technical Requirements, Terms and Conditions by the

Bidder In the event any bid is found to be not meeting any one of the Technical Bid Mandatory requirements as mentioned in Annexure I and Annexure II (T1) such bid will be disqualified. NOTE:

For evaluating the bids having variations in the Delivery and/or Redelivery Conditions in respect of hours/cycles for each of the above-mentioned items, the difference in quantifiable conditions will be evaluated based on extent of deviation from the specified Delivery and/or Redelivery conditions in terms of hours/cycles.


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ANNEXURE - II (T10)

To Office of Executive Director (Materials Management) Materials Management Department Air India Limited Safdarjung Airport, New Delhi – 110 003 INDIA Attn: Mr. M.L. Krishnamoorthi Dy. General Manager (MM) Phone: +91 11 2462 6579 Ref: Date: _____________

Dear Sir, Sub: Technical Bid as per AI Tender No HMM/16/A320 USED//LEASE/ENQ-003

With reference to AI Tender No HMM/16/A320 USED//LEASE/ENQ-003 dt.08.01.2016

for Dry Lease of 15 USED A320 aircraft, we hereby submit our offer for the same, towards which, our technical quote consisting of the Annexure I, Annexure II (T1 to T8), and Annexure IV (Integrity Pact) in sealed envelope are enclosed. We hereby confirm that we shall fully abide by the provisions of the General Terms & Conditions, Technical Bids Requirements, and the Integrity Pact duly executed by us and attached. However, a few exclusions to the requirements, terms & conditions of the tender are reflected in Annexure II (T8) (in case there is no variance in the terms & conditions of the tender, please submit ‘NIL’ statement).

Signature: Name: Designation:

Company Stamp: Encl: As Above


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ANNEXURE - III (F1)

FINANCIAL BID REQUIREMENTS

1. Airlines/operators/owners of aircraft/leasing companies having aircraft of its own/have authority

to offer aircraft on lease can only participate in the Tender. AI will not deal with any agents/brokers during the process of evaluation and finalization of the lease contract.

2 (i) Lessor shall contribute on a pro rata basis towards the portion of the documented total cost (including labour and material cost) exceeding USD 10,000 per aircraft for complying, by means of a terminating action, with each Airworthiness Directive (AD) or similar mandatory modification issued by either the DGCA of India or the FAA and being mandatory during the Lease Term to enable continued certification of airworthiness of the aircraft. If the aircraft have to be grounded beyond the normal scheduled maintenance period for complying with the ADs, Lessor shall provide rent holiday for such additional grounding.

(ii) Lessor shall pay to the lessee for the compliance of optional or recommendatory SBs required by the Lessor. Lessor shall reimburse the out-of-pocket expenses incurred by the lessee and also for the downtime of the aircraft.

3. The aircraft shall be delivered to AI in AI livery at the time of induction. 4. Impact of applicable Indian Tax Liabilities would be factored for evaluation of the bid as indicated

in Annexure – III (F4). 5. Quotations for dry lease shall be in US Dollars. 6. AI reserves the right to accept or reject any offer or part thereof without assigning any reasons

thereof. 7. The lease arrangement is subject to receiving approvals from DGCA – India, AI’s Board and the

Government of India. 8. LEASE RENTAL

The lease rental shall be specified in terms of fixed amount per aircraft per month in US Dollars.


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Annexure - III (F2)

FINANCIAL BID

(A) LEASE RENTAL AND MAINTENANCE RESERVES (USD) (TO BE PROVIDED IN FINANCIAL BID ONLY)

S/N Cost Elements

Offer in USD (To be indicated for each offered aircraft)

RATES (BID) REMARKS

01. Lease Rentals per month per aircraft

02.

Restoration / Heavy maintenance Charges

a) Airframe ‘6Y’ check

b) Airframe ‘12Y’ check

c) Landing Gears

d) APU

e) Engine

f) Engine LLPs

g) Escalation Rate, if any

03. Security Deposit –

04.

Any other expenses to be borne by the Lessee /Credits offered (please specify each) such as :- - Manufacturers Credits (please specify) - OEM’s Warranties and Guarantees - Any other

(B) INSURANCE VALUE (IN USD) to be indicated for each aircraft, the %/amount of reduction offered

annually for the Hull insurance value be indicated in the bid.

(C) START UP RESERVES TOWARDS MAINTENANCE (HEAD-WISE) FROM THE PREVIOUS LEASE

Qualified Maintenance Events Current rate per

FH/APU H /EH/FC Aggregated

amounts

a) Airframe ‘6Y’ check

b) Airframe ‘12Y’ check

c) Landing Gears Overhaul (for all Landing Gears)

d) APU Heavy Maintenance

LH RH

e) Engine Performance Restoration (for each Engine)

f) Engine LLPs (for each Engine)

Note: If no information / data is provided in the above table at (C), the figures for the Startup Reserves will be computed based on respective offered MR rates to be-descalated at the indicated escalation factor and the indicated usage levels since the last shop visit/new for delivery condition for each offered aircraft. In the event of such evaluated bid selected, AI would require the applicable Maintenance Contribution for qualifying events from the lessor.


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(D) DELAYED DELIVERY COMPENSATION OFFERED, IF ANY Important Notes:

(i) Maintenance Reserve (MR) rates should be quoted for flight-hour/cycle ratio of 1:1 to 2.5:1 in

increments of 0.25:1 (table for various combinations of flight-hours/cycle ratio to be provided). In case Lessor agrees for SBLC to be placed by AI towards such MR contribution, year wise amount of SBLC required should be indicated. The MRs if required to be paid in cash would be payable monthly based on actual reported hours and cycles.

(ii) Escalation rate % p.a. for MRs be also quoted to be indices based subject to maximum cap. Indicate the indices formula offered for such escalation. Indicate specifically whether such escalation would be on straight line OR on compounded basis. This additional cost will get added up in the bid at the time of evaluation.

(iii) The lease rental will be payable on fixed basis for the aircraft on monthly basis only from delivery date. For avoidance of doubt, any payment in respect of an accrual period of less than one month shall be made on pro-rata basis.

(iv) The aircraft lease rental rates quoted would be fixed for the contracted delivery dates offered, no escalation shall be applicable for any delay in delivery beyond the offered scheduled delivery dates and would remain fixed for the entire lease period.

(v) Any Security Deposit required by the Lessor will be given by AI on signing of the Lease Agreement in the form of Standby Letter of Credit (SBLC) to be issued/confirmed by international bank of repute acceptable to Lessor since payment of advance deposits are restricted as per the regulations of Reserve Bank of India. No other guarantee will be offered, other than the SBLCs towards security deposit. In case the bidder requires Security Deposit in Cash on or after signing of the Lease Agreement, the bidder should be agreeable to provide a Counter-bank guarantee to be issued/confirmed by International Bank acceptable to Lessee, valid till the delivery of aircraft to AI, commensurate to such amount subject to such guarantee being enforceable in India. At the time of execution of LOI, if required, AI will give initial deposit by way of SBLC or Cash upto maximum of US $50,000 per aircraft. Such initial deposit shall be adjusted against the Security Deposit payable to the Lessor at the time of Lease Agreement. If for any reason the Lease Agreement cannot be concluded, such initial deposit shall forthwith be refunded in full to AI. Wherever initial deposit is given in Cash, the same shall either be substituted with SBLC on signing of the Lease Agreement or should be covered by a Counter-bank guarantee to be issued/confirmed by International Bank acceptable to Lessee, valid till the delivery of aircraft to AI, commensurate to such amount subject to such guarantee being enforceable in India. All Security deposits would be refundable in full upon termination or at the lease expiry. For the Initial deposit/Security Deposits requirement for dates earlier than the Aircraft Delivery dates, the selected bidder(s) would be agreeable to provide enforceable Undertaking/Indemnity/Guarantee valid for the said period against such deposit requirements till the Delivery of aircraft.

(vi) The impact of applicable Indian Taxes, if any, will be considered for financial evaluation. (vii) The non-acceptance of the requirements, terms and conditions of the tender or any variance

therefrom shall be considered for evaluation. (viii) Each party will bear their own legal and documentation costs. (ix) OVERWRITING/ALTERATION/INTERCHANGED RATES IN THE FINANCIAL BID WILL LEAD TO

REJECTION. Signature:

Name: Designation: Company:


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Annexure - III (F3)

VARIANCE – GENERAL AND FINANCIAL TERMS & CONDITIONS

Summary of exclusions of the Terms & Conditions of AI, which are not acceptable in totality, may be provided below. The terms & condition, which we offer, will be as follows:

SN Annexure: __Para No.___Subject ______ Our Terms & Conditions

Note: This Annexure is mandatory and in case there is no variance to be reported, NIL statement must be

submitted in the above format.

Signature: Name: Designation: Company:


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Annexure III (F4)

FINANCIAL BID EVALUATION CRITERIA

The financial evaluation for this tender will be based on the lowest of the total of the evaluated average annualized financial impact to AI for the offered lease period considering impact of variations in terms offered as related to the following aspects covering the lease term: 1. Lease Rental per aircraft per month (as per Point A1 of the Financial Bid format) offered on monthly

basis fixed for the entire lease duration would be evaluated based on the following parameters :-

(a) Lease rental offered for each aircraft incorporating the items indicated in the AI SCNs/BFEs listings.

(b) The Offered Aircraft Lease Rentals per month in USD quoted after incorporating all the above factors/parameters would remain fixed from Delivery date for entire duration of agreed lease period.

(c) The Maintenance Contributions i.e. MRs brought forward, quoted by the Lessor in their bid as

available from the previous leases for drawdown during the lease period, subject to similar Delivery conditions, would be aggregated and if indicated in terms of MR rates, multiplied by the factor equivalent to the quoted utilization (hours/cycles/months) of the respective items. If no information / data is provided for the Maintenance Contributions, the figures will be computed based on respective offered MR rates, escalation factor and delivery conditions for offered aircraft as indicated at Footnote below Table (C) at Annexure - III (F2) above. In the event of such evaluated bid selected, AI would require the applicable Maintenance Contribution for qualifying events from the lessor.

2. Maintenance Reserves (as per Point A2 of the Financial Bid format)

(a) MRs quoted for individual items based on economic conditions of 2016 considered on the basis of

aircraft utilization at the rate of 4,000 Block Hours / 2,600 Cycles per annum, averaged on a monthly basis.

(b) In the cases, where Lessors insist on monthly cash MR payments, cost of financing, in such cases

shall be considered at 11% per annum. 3. Cost assessed by AI for compliance of such requirements, terms and conditions which are either not

accepted by the bidder or are at variance with the terms and conditions detailed in the tender, including financial impact of applicable Indian tax liabilities, would be loaded in the price quoted by the bidder

4. Cost of financing, wherever applicable in case of variance with tender terms, shall be considered at

11% per annum including towards Security Deposits. 5. Delivery Costs such as (i) cost of ferry flight from the delivery location to New Delhi, India (ii)

Variation in delivery conditions from those indicated in Annexure-II (T2) calculated on the various quoted MR rates for the technically qualified bids would be loaded/unloaded in the evaluation.


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6. Redelivery Costs will be suitably loaded/unloaded for redelivery conditions in variance from those indicated in Annexure-II (T6) based on the quoted MR rates for the technically qualified bids.

7. Value of definitive Manufacturer’s Credits, Warranties and Guarantees etc. offered/extended to AI. 8. Un-conditional Discounts offered, if any. 9. Any parameter having additional cost implication to AI such as Insurance values and the offered

annual reduction thereupon required by Lessor shall be evaluated based on the present aircraft insurance costs.

10. Other Costs. No conditional offers or discounts would be accepted. The Lowest of the aggregated annualized costs of all the above elements will be followed for shortlisting the bidders.


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Annexure - III (F4A)

FINANCIAL BID EVALUATION FORMAT – TO BE FILLED UP BY THE BIDDER

SN DESCRIPTION QUOTED AMOUNT

(USD)

EVALUATED AMOUNT TO BE ANNUALIZED (USD)

TO BE WORKED OUT BY AI

01. Aircraft Monthly Lease rental in respect of each aircraft offered

02.

MR (itemized quoted rates to be evaluated for the applicable FH/FC/Months as per tender)

MR Rates x (applicable FH/FC/Months)

Annual Escalation rate (%) To be factored in for MR costs for the offered lease period

03. Delivery Cost Difference in tender conditions x quoted MR rates + Estimated Ferry Cost

04. Redelivery Cost (Differential) Difference in tender conditions x quoted MR rates

05.

Security Deposit (based on rentals per month) AND / OR Security Deposit (SBLC in lieu of cash MRs, based on annualized MRs and net financing costs)

No. of months rentals x Financing cost at n % per annum AND / OR No. of months MR equivalent Security Deposit x Financing cost at n% per annum (where n = 11% if Security Deposit / MR required in cash and 6% if Security Deposit / MR required by way of SBLC)

06.

Insurance Cost (Hull values and annual reduction offered to be evaluated based on premium rate of 0.25% per annum - annualized)

Total Hull Value offered over lease period x 0.25%

07. Manufacturer Credits, if any

08.

Maintenance Contributions available / credited from previous lease (to be credited and available for use during lease)

09. Unconditional discounts / other expenses, if any (to be specified)

10. TOTAL (Net of Credits / Discounts 1 to 9)

11. Average Annualized Costs (Total / Offered Lease period)


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Lowest of the aggregated annualized costs of all the above elements will be followed for shortlisting the bidders

Annexure - III (F5)

To: Office of Executive Director (Materials Management) Materials Management Department Air India Limited Safdarjung Airport, New Delhi – 110 003 INDIA Attn: Mr. M.L. Krishnamoorthi Dy. General Manager (MM) Phone : +91 11 2462 6579 Ref: Dated: ………….. Dear Sir, Subject: Financial Quotation as per your Tender No HMM/16/A320 USED//LEASE/ENQ-003

With reference to your Tender No HMM/16/A320 USED//LEASE/ENQ-003

dated 08.01.2016 for Dry Lease of 15 USED A320 aircraft, we hereby submit our best quotes in the Annexure-III (F2 & F4A) along with other Parts of Annexure III, which are enclosed, as desired. We also agree to the General and Financial Terms & Conditions of your tender. However, a few exclusions to your terms & conditions are reflected in Annexure-III (F3) (In case there is no variance in the terms & conditions of our tender, submit ‘NIL’ statement). It is confirmed that no payment in any form, like commission etc. shall be made to anyone whether in India or aboard, in respect of business generated by the company from AI Limited. Thanking you, Signature: Name: Designation: Company: Encl: As above


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INTEGRITY PACT BEING A MANDATORY REQUIREMENT IS REQUIRED TO BE SUBMITTED AND SIGNED WITHOUT MAKING ANY ALTERATION TO THE DOCUMENT

Annexure - IV INTEGRITY PACT

Between Air India Limited (AIL), hereinafter referred to as “The Principal”,

and hereinafter referred to as “The Bidder/ Contractor”

PREAMBLE

The Principal intends to award, under laid down organizational procedures, contract(s) for dry lease up to 15 (FIFTEEN) used A320 aircraft

. The Principal values full compliance with all relevant laws of the land, rules, regulations, economic use of resources and of fairness/transparency in its relations with its Bidder(s) and/or Contractor(s). In order to achieve these goals, the Principal will appoint an Independent External Monitor (IEM), who will monitor the tender process and the execution of the contract for compliance with the principles mentioned above. Section 1 – Commitments of the Principal 1. The Principal commits itself to take all measures necessary to prevent corruption and to observe the

following principles:-

a. No employee of the Principal, personally or through family members, will in connection with the tender for, or the execution of a contract, demand, take a promise for or accept, for self or third person, any material or immaterial benefit which the person is not legally entitled to. The word ‘take’ shall also include the past and future.

b. The Principal will, during the tender process treat all Bidder(s) with equity and reason. The Principal will in particular, before and during the tender process, provide to all Bidder(s) the same information and will not provide to any Bidder(s) confidential/additional information through which the Bidder(s) could obtain an advantage in relation to the tender process or the contract execution.

c. The Principal will exclude from the process all known prejudiced persons and persons who would be known to have a connection or nexus with the prospective bidder.

2. If the Principal obtains information on the conduct of any of its employees which is a criminal offence under the IPC/PC Act or the conduct rules of the Principal, or if there be a substantive suspicion in this regard, the Principal will inform the Chief Vigilance Officer and in addition can initiate disciplinary actions.


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Section 2 – Commitments of the Bidder(s)/ contractor(s) 1. The Bidder(s)/ Contractor(s) commit themselves to take all measures necessary to prevent corruption

in their dealings with AIL. He commits himself to observe the following principles during his participation in the tender process and during the contract execution.

a. The Bidder(s)/ Contractor(s) will not, directly or through any other person or firm, offer, promise

or give to any of the Principal’s employees involved in the tender process or the execution of the contract or to any third person any material or other benefit which he/she is not legally entitled to, in order to obtain in exchange any advantage of any kind whatsoever during the tender process or during the execution of the contract.

b. The Bidder(s)/Contractor(s) will not enter with other Bidders into any undisclosed agreement or understanding, whether formal or informal. This applies in particular to prices, specifications, certifications, subsidiary contracts, submission or non-submission of bids or any other actions to restrict competitiveness or to introduce cartelization in the bidding process.

c. The Bidder(s)/Contractor(s) will not commit any offence under the relevant IPC/PC Act; further the Bidder(s)/ Contractor(s) will not use improperly, for purposes of competition or personal gain, or pass on to others, any information or document provided by the Principal as part of the business relationship, regarding plans, technical proposals and business details, including information contained or transmitted electronically.

d. The Bidder(s)/Contractors(s) of foreign origin shall disclose the name and address of the Agents/representatives in India, if any. Similarly the Bidder(s)/Contractors(s) of Indian Nationality shall furnish the name and address of the foreign principals, if any. Further details as mentioned in the “Guidelines on Indian Agents of Foreign Suppliers” shall be disclosed by the Bidder(s)/Contractor(s).Further, as mentioned in the Guidelines all the payments made to the Indian agent/representative have to be in Indian Rupees only. Copy of the “Guidelines on Indian Agents of Foreign Suppliers” is placed at (Page nos. 6-7)

e. The Bidder(s)/Contractor(s) will, when presenting his bid, disclose any and all payments he has made, is committed to or intends to make to agents, brokers or any other intermediaries in connection with the award of the contract.

f. This integrity pact shall override the confidentiality clause, if any, in the offer submitted by the Contractor/Bidder and in the agreement entered into by the Principal with the Contractor/Bidder.

2. The Bidder(s)/Contractor(s) will not instigate third persons to commit offences or acts outlined above or be an accessory to such offences.

Section 3 - Disqualification from tender process and exclusion from future contracts If the Bidder(s)/Contractor(s), before award or during execution has committed a transgression through a violation of Section 2, above or in any other form such as to put his reliability or credibility in question, the Principal is entitled to disqualify the Bidder(s)/Contractor(s) from the tender process or take action as per the procedure mentioned in the “Guidelines on Banning of business dealings”. Copy of the “Guidelines on Banning of business dealings” is placed at Page nos. 8-16. Section 4 – Compensation for Damages 1. If the Principal has disqualified the Bidder(s) from the tender process prior to the award according to

Section 3, the Principal is entitled to demand and recover the damages equivalent to Earnest Money Deposit/Bid Security and other actual damages due to the consequential delay.


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2. If the Principal has terminated the contract according to Section 3, or if the Principal is entitled to terminate the contract according to Section 3, the Principal shall be entitled to demand and recover from the Contractor liquidated damages of the Contract value or the amount equivalent to Performance Bank Guarantee.

3. The Contractor/Bidder shall not be entitled to claim from the Principal any amounts either as damages or otherwise, on account of termination.

Section 5 – Previous transgression 1. The Bidder declares that no previous transgressions occurred in the last 3 years with any other

Company in any country conforming to the corruption approach or with any other Public Sector Enterprise in India that could justify his exclusion from the tender process.

2. If the Bidder makes incorrect statement on this subject, he can be disqualified from the tender process or action can be taken as per the procedure mentioned in “Guidelines on Banning of business dealings”.

Section 6 – Equal treatment of all Bidders/Contractors/Subcontractors 1. The Bidder(s)/ Contractor(s) undertake(s) to demand from all subcontractors a commitment in

conformity with this Integrity Pact, and to submit it to the Principal before contract signing. 2. The Principal will enter into agreements with identical conditions as this one with all Bidders,

Contractors and Subcontractors. 3. The Principal will disqualify from the tender process all bidders who do not sign this Pact or violate

its provisions. Section 7 – Criminal charges against violating Bidder(s)/Contractor(s)/ Subcontractor(s) If the Principal obtains knowledge of conduct of a Bidder, Contractor or Subcontractor, or of an employee or a representative or an associate of a Bidder, Contractor or Subcontractor which constitutes corruption, or if the Principal has substantive suspicion in this regard, the Principal will inform the same to the Chief Vigilance Officer. Section 8 – Independent External Monitor/Monitors 1. The Principal appoints competent and credible Independent External Monitor for this Pact. The task

of the Monitor is to review independently and objectively, whether and to what extent the parties comply with the obligations under this agreement.

2. The Monitor is not subject to instructions by the representatives of the parties and performs his functions neutrally and independently. He shall report to the Chairman, AIL.

3. The Bidder(s)/Contractor(s) accepts that the Monitor has the right to access without restriction to all Project documentation of the Principal including that provided by the Contractor. The Contractor will also grant the Monitor, upon his request and demonstration of a valid interest, unrestricted and unconditional access to his project documentation. The same is applicable to Subcontractors. The Monitor is under contractual obligation to treat the information and documents of the Bidder(s)/ Contractor(s)/ Subcontractor(s) with confidentiality.

4. The Principal will provide to the Monitor sufficient information about all meetings among the parties related to the Project provided such meetings could have an impact on the contractual relations between the Principal and the Contractor. The parties offer to the Monitor the option to participate in such meetings.


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5. As soon as the Monitor notices, or believes to notice, a violation of this agreement, he will so inform the Management of the Principal and request the Management to discontinue or take corrective action, or to take other relevant action. The monitor can in this regard submit non-binding recommendations. Beyond this, the Monitor has no right to demand from the parties that they act in a specific manner, refrain from action or tolerate action.

6. The Monitor will submit a written report to the Chairman, AIL within 8 to 10 weeks from the date of reference or intimation to him by the Principal and, should the occasion arise, submit proposals for correcting problematic situations.

7. Monitor shall be entitled to compensation on the same terms as being extended to / provided to Independent Directors on the AIL Board.

8. If the Monitor has reported to the Chairman AIL, a substantiated suspicion of an offence under relevant IPC/ PC Act, and the Chairman AIL has not, within the reasonable time taken visible action to proceed against such offence or reported it to the Chief Vigilance Officer, the Monitor may also transmit this information directly to the Central Vigilance Commissioner.

9. The word ‘Monitor’ would include both singular and plural. Section 9 – Pact Duration This Pact begins when both parties have legally signed it. It expires for the Contractor 3 years after the last payment under the contract, and for all other Bidders 12 months after the contract has been awarded. If any claim is made/lodged during this time, the same shall be binding and continue to be valid despite the lapse of this pact as specified above, unless it is discharged / determined by Board of AIL. Section 10 – Other provisions 1. This agreement is subject to Indian Law. Place of performance and jurisdiction is the Registered

Office of the Principal, i.e. New Delhi. 2. Changes and supplements as well as termination notices need to be made in writing. Side

agreements have not been made.


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GUIDELINES FOR INDIAN AGENTS OF FOREIGN SUPPLIERS

1.0 There shall be compulsory registration of agents for all Global (Open) Tender and Limited Tender.

An agent who is not registered with AIL Departments/Stations shall apply for registration in the prescribed Application –Form.

1.1 Registered agents will file an authenticated Photostat copy duly attested by a Notary Public/Original certificate of the principal confirming the agency agreement and giving the status being enjoyed by the agent and the commission/remuneration/salary/ retainer ship being paid by the principal to the agent before the placement of order by AIL Departments/Stations.

1.2 Wherever the Indian representatives have communicated on behalf of their principals and the foreign parties have stated that they are not paying any commission to the Indian agents, and the Indian representative is working on the basis of salary or as retainer, a written declaration to this effect should be submitted by the party (i.e. Principal) before finalizing the order

2.0 DISCLOSURE OF PARTICULARS OF AGENTS/ REPRESENTATIVES IN INDIA. IF ANY. 2.1 Tenderers of Foreign nationality shall furnish the following details in their offer: 2.1.1 The name and address of the agents/representatives in India, if any and the extent of

authorization and authority given to commit the Principals. In case the agent/representative be a foreign Company, it shall be confirmed whether it is real substantial Company and details of the same shall be furnished.

2.1.2 The amount of commission/remuneration included in the quoted price(s) for such agents/representatives in India.

2.1.3 Confirmation of the Tenderer that the commission/ remuneration if any, payable to his agents/representatives in India, may be paid by AIL in Indian Rupees only.

2.2 Tenderers of Indian Nationality shall furnish the following details in their offers: 2.2.1 The name and address of the foreign principals indicating their nationality as well as their status,

i.e, whether manufacturer or agents of manufacturer holding the Letter of Authority of the Principal specifically authorizing the agent to make an offer in India in response to tender either directly or through the agents/representatives.

2.2.2 The amount of commission/remuneration included in the price (s) quoted by the Tenderer for himself.

2.2.3 Confirmation of the foreign principals of the Tenderer that the commission/remuneration, if any, reserved for the Tenderer in the quoted price (s), may be paid by AIL in India in equivalent Indian Rupees on satisfactory completion of the Project or supplies of Stores and Spares in case of operation items .

2.3 In either case, in the event of contract materializing, the terms of payment will provide for payment of the commission /remuneration, if any payable to the agents/representatives in India in Indian Rupees on expiry of 90 days after the discharge of the obligations under the contract.

2.4 Failure to furnish correct and detailed information as called for in paragraph-2.0 above will render the concerned tender liable to rejection or in the event of a contract materializing, the same liable to termination by AIL. Besides this there would be a penalty of banning business dealings with AIL or damage or payment of a named sum.


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GUIDELINES ON BANNING OF BUSINESS DEALINGS

CONTENTS

S.No. Description Page(s)

1. Introduction 40

2. Scope 40

3. Definitions 41

4. Initiation of Banning / Suspension 42

5. Suspension of Business Dealings 42-43

6. Ground on which Banning of Business Dealing can be initiated 44-46

7. Banning of Business Dealings 46

8. Removal from List of Approved Agencies-Suppliers / Contractors, 46

etc.

9. Procedure for issuing Show-cause Notice 46

10. Appeal against the Decision of the Competent Authority 46

11. Review of the Decision by the Competent Authority 47

12. Circulation of the names of Agencies with whom Business 47 Dealings have been banned

1. Introduction 1.1 AI, being a Public Sector Enterprise and ‘State’, within the meaning of Article 12 of the Constitution of

India, has to ensure preservation of rights enshrined in Chapter III of the Constitution. AIL has also to safeguard its commercial interests. AIL deals with Agencies, who have a very high degree of integrity, commitments and sincerity towards the work undertaken. It is not in the interest of AIL to deal with Agencies who commit deception, fraud or exercise of coercion or undue influence or other misconduct in the execution of contracts awarded / orders issued to them. In order to ensure compliance with the constitutional mandate, it is incumbent on AIL to observe principles of natural justice before banning the business dealings with any Agency.

1.2 Since banning of business dealings involves civil consequences for an Agency concerned, it is incumbent that adequate opportunity of hearing is provided and the explanation, if tendered, is considered before passing any order in this regard keeping in view the facts and circumstances of the case.

2. Scope 2.1 The General Conditions of Contract (GCC) of AIL generally provide that AIL reserves its rights to remove

from list of approved suppliers/contractors or to ban business dealings if any Agency has been found to have committed misconduct, violation of any law or any term of the agreement and also to suspend business dealings pending investigation. If such provision does not exist in any GCC, the same may be incorporated.

2.2 Similarly, in case of sale of material there is a clause to deal with the Agencies/customers/buyers, who indulge in lifting of material in unauthorized manner. If such a stipulation does not exist in any Sale Order, the same may be incorporated.

2.3 However, absence of such a clause does not in any way restrict the right of Company (AIL) to take action/decision under these guidelines in appropriate cases.

2.4 The procedure of (i) Removal of Agency from the List of approved suppliers / contractors; (ii) Suspension and (iii) Banning of Business Dealing with Agencies, has been laid down in these guidelines.

2.5 These guidelines apply to all the Departments/Stations and subsidiaries of AIL. 2.6 It is clarified that these guidelines do not deal with the decision of the Management not to entertain

any particular Agency due to its poor/inadequate performance or for any other reason. 2.7 The banning shall be with prospective effect, i.e., future business dealings. 3. Definitions In these Guidelines, unless the context otherwise requires: i) ‘Party/Contractor/Supplier/Purchaser/Customer’ shall mean and include a public limited company or a

private limited company, a firm whether registered or not, an individual, a cooperative society or an association or a group of persons engaged in any commerce, trade, industry, etc. ‘Party/Contractor/Supplier/Purchaser/Customer’ in the context of these guidelines is indicated as ‘Agency’.

ii) ‘Inter-connected Agency’ shall mean two or more companies having any of the following features:

a. If one is a subsidiary of the other. b. If the Director(s), Partner(s), Manager(s) or Representative(s) are common; c. If Management is common; d. If one owns or controls the other in any manner;

iii) ‘Competent Authority’ and ‘Appellate Authority’ shall mean the following:

a. For Company (entire AIL) Wide Banning


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The Executive Director – SBU in charge of Procurement shall be the ‘Competent Authority’ for the purpose of these guidelines. Chairman, AIL shall be the ‘Appellate Authority’ in respect of such cases.

b. In case the foreign supplier is not satisfied by the decision of the First Appellate Authority, it may approach AIL Board as Second Appellate Authority.

c. For Departments / Stations only

Any officer not below the rank of Executive Director appointed or nominated by the Functional Director / SBU Head shall be the ‘Appellate Authority’ in all such cases.

d. For Corporate Office only

For procurement of items / award of contracts, to meet the requirement of Corporate Office only, Head of CMMG shall be the “Competent Authority” and Director (Technical) shall be the “Appellate Authority”.

e. Chairman, AIL shall have overall power to take suo-moto action on any information available or received by him and pass such order(s) as he may think appropriate, including modifying the order(s) passed by any authority under these guidelines.

iv) ‘Investigating Department’ shall mean any Department or Unit investigating into the conduct of the

Agency and shall include the Vigilance Department, Central Bureau of Investigation, the State Police or any other authority or agency set up by the Central or State Government having powers to investigate.

v) ‘List of approved Agencies - Parties/Contractors/Suppliers/ Purchasers/Customers shall mean and include list of approved/registered Agencies – Parties / Contractors / Suppliers / Purchasers / Customers, etc.

4. Initiation of Banning/Suspension Action for banning/suspension of business dealings with any Agency should be initiated by the department having business dealings with them after noticing the irregularities or misconduct on their part. The Vigilance Department of AIL shall have the right to recommend banning/suspension and this shall be binding on the Department/SBU and non-compliance of these recommendations/instructions shall be deemed to be a misconduct on the part of the Head of the Department/SBU. 5. Suspension of Business Dealings 5.1 If the conduct of any Agency dealing with AIL is under investigation by any department (except Foreign

Suppliers of imported coal/coke), the Competent Authority may consider whether the allegations under investigation are of a serious nature and whether pending investigation, it would be advisable to continue business dealing with the Agency. If the Competent Authority, after consideration of the matter including the recommendation of the Investigating Department, if any, decides that it would not be in the interest to continue business dealings pending investigation, it may suspend business dealings with the Agency. The order to this effect may indicate a brief of the charges under investigation. If it is decided that inter-connected Agencies would also come within the ambit of the order of suspension, the same should be specifically stated in the order. The order of suspension would operate for a period not more than six months and may be communicated to the Agency as also to the Investigating Department. The Investigating Department may ensure that their investigation is completed and whole process of final order is over within such period.

5.2 The order of suspension shall be communicated to all Departmental Heads within the Departments/Stations. During the period of suspension, no business dealing may be held with the Agency.

5.3 As far as possible, the existing contract(s) with the Agency may continue unless the Competent Authority, having regard to the circumstances of the case, decides otherwise.


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5.4 If the gravity of the misconduct/violation under investigation is very serious and it would not be in the interest of AIL, as a whole, to deal with such an Agency pending investigation, the Competent Authority may send his recommendation to Chief Vigilance Officer (CVO), AIL Corporate Office along with the material available. If Corporate Office considers that depending upon the gravity of the misconduct/violation, it would not be desirable for all the Departments/Stations and Subsidiaries of AIL to have any dealings with the Agency concerned, an order suspending business dealings may be issued to all the Departments/Stations by the Competent Authority of the Corporate Office, copy of which may be endorsed to the Agency concerned. Such an order would operate for a period of six months from the date of issue.

5.5 For suspension of business dealings with Foreign Suppliers, following shall be the procedure :-

i. Suspension of the foreign suppliers shall apply throughout the Company including Subsidiaries. ii. Based on the complaint forwarded by ED-Procurement or received directly by Corporate

Vigilance, if gravity of the misconduct under investigation is found serious and it is felt that it would not be in the interest of AIL to continue to deal with such agency, pending investigation, Corporate Vigilance may send such recommendation on the matter to Executive Director-Procurement to place it before a Committee consisting of the following :

1. Director-Finance/Head of Corporate Finance; 2. SBU Head/Department concerned; 3. ED-Headquarters/Head of Corporate Office; 4. GM-Legal/Head of Corporate Law.

The committee shall expeditiously examine the report, give its comments/recommendations within twenty one days of receipt of the reference by ED-Procurement.

iii. The comments/recommendations of the Committee shall then be placed by ED-Procurement before the Board of AIL and if the Board opines that it is a fit case for suspension, SBU Head may pass necessary orders which shall be communicated to the foreign supplier by ED-Headquarters.

5.6 If the Agency concerned asks for detailed reasons of suspension, the Agency may be informed that its conduct is under investigation. It is not necessary to enter into correspondence or argument with the Agency at this stage.

5.7 It is not necessary to give any show-cause notice or personal hearing to the Agency before issuing the order of suspension. However, if investigations are not complete in six months’ time, the Competent Authority may extend the period of suspension by another three months, during which period the investigations must be completed.

6. Grounds on which Banning of Business Dealings can be initiated 6.1 If the security consideration, including questions of loyalty of the Agency to the State, so warrants; 6.2 If the Director/Owner of the Agency, proprietor or partner of the firm, is convicted by a Court of Law

for offences involving moral turpitude in relation to its business dealings with the Government or any other public sector enterprises or AIL, during the last five years;

6.3 If there is strong justification for believing that the Directors, Proprietors, Partners, owner of the Agency have been guilty of malpractices such as bribery, corruption, fraud, substitution of tenders, interpolations, etc;

6.4 If the Agency continuously refuses to return/refund the dues of AIL without showing adequate reason and this is not due to any reasonable dispute which would attract proceedings in arbitration or Court of Law;

6.5 If the Agency employs a public servant dismissed/removed or employs a person convicted for an offence involving corruption or abetment of such offence;

6.6 If business dealings with the Agency have been banned by the Govt. or any other public sector enterprise;


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6.7 If the Agency has resorted to Corrupt, fraudulent practices, coercion, undue influence and other violations including misrepresentation of facts;

6.8 If the Agency uses intimidation/threatening or brings undue outside pressure on the Company (AIL) or its official in acceptance/ performances of the job under the contract;

6.9 If the Agency indulges in repeated and/or deliberate use of delay tactics in complying with contractual stipulations;

6.10 Wilful indulgence by the Agency in supplying sub-standard material irrespective of whether pre-despatch inspection was carried out by Company (AIL) or not;

6.11 Based on the findings of the investigation report of CBI/Police/internal Vigilance or any other investigative agency including Government Audit against the Agency for malafide/unlawful acts or improper conduct on his part in matters relating to the Company (AIL) or even otherwise;

6.12 Established litigant nature of the Agency to derive undue benefit; 6.13 Continued poor performance of the Agency in several contracts; 6.14 If the Agency misuses the premises or facilities of the Company (AIL), forcefully occupies tampers or

damages the Company’s properties including land, water resources, forests / trees, etc.

(Note: The examples given above are only illustrative and not exhaustive. The Competent Authority may decide to ban business dealing for any good and sufficient reason).

7 Banning of Business Dealings 7.1 Normally, a decision to ban business dealings with any Agency should apply throughout the Company

including Subsidiaries. However, the Competent Authority of the Department/Unit except Corporate Office can impose such ban unit-wise only if in the particular case banning of business dealings by respective Department/Unit will serve the purpose and achieve its objective and banning throughout the Company is not required in view of the local conditions and impact of the misconduct/default to beyond the Department/Unit. Any ban imposed by Corporate Office shall be applicable across all Departments/Stations of the Company including Subsidiaries.

7.2 For Company-wide banning, the proposal should be sent by ACVO of the Department/Unit to the CVO through the Chief Executive of the Department/Unit setting out the facts of the case and the justification of the action proposed along with all the relevant papers and documents except for banning of business dealings with Foreign Suppliers of imported coal/coke.

The Corporate Vigilance shall process the proposal of the Department/Unit for a prima-facie view in the matter by the Competent Authority nominated for Company-wide banning.

The CVO shall get feedback about that agency from all other Departments/Stations. Based on this feedback, a prima-facie decision for banning/or otherwise shall be taken by the Competent Authority.

If the prima-facie decision for Company-wide banning has been taken, the Corporate Vigilance shall issue a show-cause notice to the agency conveying why it should not be banned throughout AIL.

After considering the reply of the Agency and other circumstances and facts of the case, a final decision for Company-wide banning shall be taken by the Competent Authority.

7.3 There will be a Standing Committee in each Department/Unit to be appointed by Chief Executive for

processing the cases of “Banning of Business Dealings” except for banning of business dealings with foreign suppliers of coal/coke. However, for procurement of items/award of contracts, to meet the requirement of Corporate Office only, the committee shall be consisting of Executive Director/General Manager from Finance, Procurement and Legal:


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i) To study the report of the Investigating Agency and decide if a prima-facie case for Company-wide/Local unit wise banning exists, if not, send back the case to the Competent Authority.

ii) To recommend for issue of show-cause notice to the Agency by the concerned department. iii) To examine the reply to show-cause notice and call the Agency for personal hearing, if

required. iv) To submit final recommendation to the Competent Authority for banning or otherwise.

7.4 If the Competent Authority is prima-facie of the view that action for banning business dealings with

the Agency is called for, a show-cause notice may be issued to the Agency as per paragraph 9.1 and an enquiry held accordingly.

8 Removal from List of Approved Agencies - Suppliers/Contractors, etc. 8.1 If the Competent Authority decides that the charge against the Agency is of a minor nature, it may

issue a show-cause notice as to why the name of the Agency should not be removed from the list of approved Agencies - Suppliers/Contractors, etc.

8.2 The effect of such an order would be that the Agency would not be disqualified from competing in Open Tender Enquiries.

8.3 Past performance of the Agency may be taken into account while processing for approval of the Competent Authority for awarding the contract.

9 Show-cause Notice 9.1 In case where the Competent Authority decides that action against an Agency is called for, a show-

cause notice has to be issued to the Agency. Statement containing the imputation of misconduct or misbehavior may be appended to the show-cause notice and the Agency should be asked to submit within 15 days a written statement in its defense.

9.2 If the Agency requests for inspection of any relevant document in possession of AIL, necessary facility for inspection of documents may be provided.

9.3 The Competent Authority may consider and pass an appropriate speaking order:

a. For exonerating the Agency if the charges are not established;

b. For removing the Agency from the list of approved Suppliers/Contactors, etc. c. For banning the business dealing with the Agency.

9.4 If it decides to ban business dealings, the period for which the ban would be operative may be

mentioned. The order may also mention that the ban would extend to the interconnected Agencies of the Agency.

10 Appeal against the Decision of the Competent Authority 10.1 The Agency may file an appeal against the order of the Competent Authority banning business

dealing, etc. The appeal shall be to the Appellate Authority. Such an appeal shall be preferred within one month from the date of receipt of the order banning business dealing, etc.

10.2 Appellate Authority would consider the appeal and pass appropriate order which shall be communicated to the Agency as well as the Competent Authority.

11 Review of the Decision by the Competent Authority

Any petition/application filed by the Agency concerning the review of the banning order passed originally by Chief Executive/Competent Authority under the existing guidelines either before or after filing of appeal before the Appellate Authority or after disposal of appeal by the Appellate Authority,


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the review petition can be decided by the Chief Executive/Competent Authority upon disclosure of new facts/circumstances or subsequent development necessitating such review. The Competent Authority may refer the same petition to the Standing Committee for examination and recommendation.

12 Circulation of the names of Agencies with whom Business Dealings have been banned 12.1 Depending upon the gravity of misconduct established, the Competent Authority of the Corporate

Office may circulate the names of Agency with whom business dealings have been banned, to the Government Departments, other Public Sector Enterprises, etc. for such action as they deem appropriate.

12.2 If Government Departments or a Public Sector Enterprise request for more information about the Agency with whom business dealings have been banned, a copy of the report of Inquiring Authority together with a copy of the order of the Competent Authority/Appellate Authority may be supplied.

12.3 If business dealings with any Agency have been banned by the Central or State Government or any other Public Sector Enterprise, AIL may, without any further enquiry or investigation, issue an order banning business dealing with the Agency and its inter-connected Agencies.

12.4 Based on the above, Departments/Stations may formulate their own procedure for implementation of the Guidelines.


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DATE: 08.01.2016

AIR INDIA LTD.

INTEGRITY PACT PROGRAM

I. INTRODUCTION Air India Limited, (AIL) is a premier Public Sector airline (a wholly owned subsidiary of Air-India) engaged in air transportation of passengers and cargo in India. The brand name of the Company is Alliance Air and it conducts its business by benchmarking itself to the highest ethical standards, and adopting the best practices followed by the industry. It does business with a number of domestic and international Bidders, Contractors and Vendors of goods and services (Counterparties). AIL is committed to fostering the most ethical and corruption free business environment. AIL values its relationships with all Counterparts and deals with them in a fair and transparent manner. In order to achieve these goals, AIL is implementing the Integrity Pact Program in cooperation with Central Vigilance Commission (CVC) in respect of all contracts of the value of Rs.10 crores and above. As a part of this initiative, AIL will, in consultation with CVC, appoint external Independent Monitors who will help AIL in implementing the Integrity Pact Program. The Integrity Pact would be signed by the Principal and the Vendor at the pre-tendering stage itself, and will form part of the Tender document. A pre-signed Integrity Pact by the Principal would form part of the Tender document. The Vendors would sign the Pact and submit it along with the financial and technical bids. The ingredients of AIL’s Integrity Pact Program are broadly based on :-

- Commitments and Obligation of AIL and its employees - Commitments and Obligation of Counterparties - Violation and Consequences - Independent Monitor - Implementation Guidelines - Role of Independent Monitors.

II. COMMITMENTS AND OBLIGATION OF AIL a. AIL is committed to have the most ethical and corruption- free business dealings with its

Counterparties. b. AIL values its relationship with all Counterparties and will deal with them in a fair and transparent

manner. c. AIL and/or its Associates (employees, agents, consultants, advisors, etc.) will not seek or take bribes /

undue benefit directly or indirectly for themselves or for third parties. d. In a competitive tender as well as in general procurement, AIL will deal with all Counterparties with

equity, reason and fairness. e. AIL will exclude all Associates who may be prejudiced or have a Conflict of Interest in dealings with

Counterparties. f. AIL will honour its commitments and make due payments to Counterparties in a timely manner. g. AIL will initiate action and pursue it vigorously whenever corruption or unethical behavior occurs.


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III. COMMITMENTS AND OBLIGATIONS OF THE ‘COUNTER-PARTY’ a. The Counterparty, directly or indirectly (through Agent, consultant, advisor, etc.), will not pay any

bribes or give illegal benefit to anyone to gain undue advantage in dealing with the Principal, AIL. b. The Counterparty will not engage in collusion, Price-Fixing, etc. with other Counterparties in dealing

with the Principal, AIL. c. The Counterparty will not pass on to any third party any of the Principal’s confidential information

unless authorized by the organization. d. The Counterparty will promote and observe best ethical practices within its organization. e. The Counterparty will inform the Independent Monitor:

i. If it receives demand for a bribe or illegal payment/benefit and ii. If it comes to know of any unethical or illegal practice in the Principal’s organization (AIL) iii. If it makes any payment to any of AIL’s Associates.

f. The Counterparty will not make any false or misleading allegations against AIL or its Associates. IV. VIOLATIONS & CONSEQUENCES a. If a Counterparty commits a violation of its Commitments and Obligations under the Integrity Pact

Program during the bidding process, it shall be liable to compensate AIL by way of Liquidated damages amounting to a sum equivalent to 3% of the value of the offer or the amount equivalent to Earnest Money Deposit/Bid Security, whichever is higher or an amount determined by the Independent Monitor.

b. In case of violation of the Integrity Pact whereby after award of the Contract the Principal (AIL) terminates or is entitled to terminate the Contract, AIL shall be entitled to demand and recover from the Contractor liquidated damages equivalent to 5% of the contract value or the amount equivalent to Security Deposit/Performance Bank Guarantee, whichever is higher or an amount determined by the Independent Monitor.

c. AIL may ban and exclude the Counterparty from future dealings until the Independent Monitor is satisfied that the Counterparty will not commit any future violation.

d. AIL may initiate criminal proceedings against the violating Counterparty, depending on the gravity of the violation.

e. In case there is a violation of the Integrity Pact by the Principal (AIL) or its Associates (i.e. employees, agents, consultants, advisors, etc.), AIL undertakes to take appropriate action against them.

f. If the complaint made by a counter-party is found to be frivolous or mischievous, action in the form of certain sanctions would be taken against the said complainant.

V. INDEPENDENT MONITOR 1. Chairman & MD, AIL, is the authority to appoint Independent Monitor(s) to oversee the

implementation and effectiveness of the Integrity Pact Program. The process for their appointment shall be similar to Outside Expert Committee (OEC). For this purpose, a panel of Independent Monitors may be constituted by AIL and the same may be referred to CVC for clearance.

2. The Independent Monitor will be a person of Impeccable Integrity, Knowledgeable of AIL’s business and experienced in commercial activities.

3. It will be a voluntary, non-salaried position of 3 years terms. Independent Monitor will have stature /benefits similar to those of Chairman of the Audit Committee of Board/status of the Directors of AIL. The remuneration and perquisites would be similar to the remuneration/perks of independent Directors on the Board of AIL.

4. The main objective of the Independent Monitor will be to oversee the implementation of the Integrity Pact Program, to prevent corruption, or any other unethical practices in the implementation of the contract.


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5. The Independent Monitor will not have administrative or enforcement responsibilities. He will coordinate his efforts through the CVO or other anti-corruption institutions such as CVC. (He may engage services of outside agencies such as accounting firms, law firms, etc. at AIL’s expense, if required, in discharge of his responsibilities after obtaining the approval of the Chairman & M.D.)

6. The Independent Monitor will have access to all offices and internal records of the Principal in respect of the Tender in question. He will also have access to Counterparties’ records and information regarding its dealing with the Principal.

7. The Independent Monitor will have the right to attend any meetings between the Principal and the Counterparties. As far as possible, the meetings should be scheduled in India. In respect of any meeting to be held outside India, attendance by the Independent Monitor would be decided in consultation with the Chairman & M.D., AIL.

8. If the Independent Monitor observes or suspects an irregularity, he will inform the Chairman of AIL. Once the Independent Monitor is satisfied that any irregularity has taken place, he may also inform the CVO and CVC.

VI. IMPLEMENTATION GUIDELINES To implement the Integrity Pact Program, the following general Guidelines are suggested: a. To select and appoint a Panel of Independent Monitors in consultation with the CVC. b. To get commitment from all Senior Level executives/officials of AIL to implement the program. It

should be recognized that there may be resistance to Integrity Pact program. c. To develop detailed implementations plans and finalize the Integrity Pact document in consultation

with the Independent Monitors. d. To notify all senior staff members, Board of Directors, any other over-sight body of the Organization

and major suppliers of AIL’s plans to implement Integrity Pact program, which is to be Included in AIL’s web site and also disclose this initiative to the media.

VII. PERIODIC REVIEW & EVALUATION It is recommended that the Board of Directors of AIL periodically review the effectiveness of Integrity Pact Program by all or some of the following measures:- 1. The Independent Monitors and senior leadership of AIL do an annual self-assessment of Integrity Pact

Program effectiveness and identify areas / ways to improve the same. 2. The Independent Monitor will submit an annual report on the progress / effectiveness of Integrity Pact

Program to the Board of Directors of AIL. 3. AIL may conduct an annual 360-degree review (through an outside agency, if required) with senior

executives, junior executives, suppliers, and competitors, regarding the effectiveness of the Integrity Pact Program in reducing corruption. Feed-back may be taken from the junior and senior executives of the Principal, suppliers and competitors.

4. AIL should meet with CVC on an annual basis to review the effectiveness of the program.

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