Jet Airways, Etihad deal: Beleaguered PMO steps in, says no differences in govt

Written by ENS Economic Bureau | Updated: Jul 3 2013, 21:29pm hrs
Jet etihad deal'It was asserted that there were no differences within govt over air services agreement between India and Abu Dhabi.' (AP)
Aiming to douse the controversy over the Rs 2,058 crore Jet Airways-Etihad deal, the Prime Ministers Office (PMO) Tuesday said the stake-sale issue was still under examination and concerns raised about it had been referred to the relevant ministries.

It also asserted that there were no differences within the government over the air services agreement between India and Abu Dhabi. The PMO statement came as Cabinet Secretary A K Seth held a late evening meeting with secretaries from across ministries and departments to discuss the issue against the backdrop of objections raised against the deal by some Members of Parliament.

Earlier in the day, Civil Aviation Minister Ajit Singh threw his weight behind the deal saying those opposing it were long on politics and short on facts. It is such an important deal...the first big deal in civil aviation ministry. In terms of FDI, it is bigger than any other deal this year. There are so many dimensions to it.

The controversy over the Etihads investment in Jet comes at a time when the government is trying to woo investors from the Middle-East through measures including a bilateral investment pact and liberalisation of investment norms. The UAE is one of Indias largest trading partners and total trade between the two countries touched $74.7 billion in 2012-13.

The PMO statement came amid increasing objections the deal, first from a Parliamentary Standing Committee headed by CPI(M) MP Sitaram Yechury, and then by senior MPs Jaswant Singh and Dinesh Trivedi, and Janata Party chief Subramanian Swamy, who is believed to have written to Prime Minister Manmohan Singh.

Responding to reports about the India-UAE (Abu Dhabi) bilateral air services agreement and the Jet Airways-Etihad equity proposal, the PMO said these reports are factually incorrect and baseless.

Referring to the bilateral agreement, it said there is absolutely no disagreement within the government or between the ministers and the Prime Minister on the matter. The Prime Minister is neither washing his hands off the bilateral air services agreement nor is the Prime Ministers Office trying to do a U-turn on the issue now.

About the stake sale issue between Jet and Abu Dhabis Etihad, the PMO said this was a distinctly different matter as it was an agreement between two private parties.

This is a matter between private parties which needs to be approved by the concerned agencies as per the policies and laws in place. This is not an agreement between governments and there is no question either backtracking from or disowning this proposal as this is not an agreement with the government, it said. As for the equity stake matter, that is a matter still under examination.

The issues raised over the deal have been referred to the civil aviation ministry, department of industrial policy and promotion, department of economic affairs and the corporate affairs ministry for examination and appropriate action as they were concerned with various aspects of the complaints.

The issues relating to security concerns were referred to the cabinet secretary for examination to suggest whether there was a need to look into any issues afresh, the PMO statement said.

It also said the Prime Minister had directed that the matter be brought to the Union cabinet much before any of the letters complaining about the seat entitlement enhancement or the Jet-Etihad equity stake were even received. Seeking to clear the air over the issue, the PMO detailed the sequence of events and said it wanted a note prepared for cabinet approval to be modified. Nowhere was there a suggestion to change the decision sought in the note, which is the ex-post facto approval of the MoU, it said.