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India's PM clarifies reports on India-UAE (Abu Dhabi) bilateral and Etihad-Jet equity proposal

3-Jul-2013 9:57 AM

India's Prime Minister Dr Manmohan Singh stated (02-Jul-2013) that media reports on the India-UAE (Abu Dhabi) bilateral air services agreement and on the Jet Airways-Etihad equity stake proposal which have inferred that the Prime Minister's Office is playing a role in the Jet Airways-Etihad proposal are "factually incorrect and baseless". He added, "There is absolutely no disagreement within the government or between the Ministers and Prime Minister on the matter. The Prime Minister is neither washing his hands off the Bilateral Air Services Agreement nor is the Prime Minister's Office trying to do a U-turn on the issue now". He added that some media reports are "not based on full knowledge of facts do not reveal the full picture or the detailed discussions that took place on the bilateral arrangements. As for the equity stake matter, that is a matter still under examination and there is no question of backtracking or disowning it as it is not an agreement with the government". He also outlined the following:

  • Bilateral air services agreement: The Prime Minister noted the enhancement of seat entitlements under a Bilateral Air Services Agreement between India-Abu Dhabi is an inter-government agreement on bilateral air traffic seat entitlements and concerns the governments of the two countries. He also outlined the processes which followed after the Minister of Civil Aviation Ajit Singh on 22-Apr-2013 sought the Prime Minister's clearance for concluding an MOU with Abu Dhabi with a seat entitlement which was different from that recommended by an Inter-Ministerial Group;
  • Equity stake proposal: The Prime Minister noted the equity stake proposal between Jet Airways and Etihad is a private agreement between two private entities. The Prime Minister noted it has received a number of complaint letters on this agreement and matters related to this proposal were referred to the Ministry of Civil Aviation, Department of Industrial Policy & Promotion, Department of Economic Affairs and the Ministry of Corporate Affairs for examination and appropriate action, as they were concerned with various aspects of the complaints. Issues raised in the letters relating to security concerns in the context of the FDI policy in Civil Aviation were referred to the Cabinet Secretary for examination to suggest whether there is a need to look into any issues afresh;
  • Conclusions: The Prime Minister outlined the following conclusions:
    • The Minister of Civil Aviation approached the Prime Minister seeking clearance for concluding the seat entitlement MOU;
    • The Prime Minister directed the Finance Minister, along with other Ministers, to examine the matter;
    • After the meeting of the Ministers with the Prime Minister and reaching a common understanding of the basis of their suggestion, it was agreed to give an `in-principle` go ahead to the negotiating team which went ahead and concluded an MOU;
    • The Prime Minister directed that the matter be brought to Cabinet much before any of the letters complaining about the seat entitlement enhancement or the Jet-Etihad equity stake were even received;
    • While the PMO wanted the Cabinet Note modified to reflect the sequence of events and the discussions better, nowhere was there a suggestion to change the decision sought in the note, which is the ex-post facto approval of the MOU.
    • As for the Jet-Etihad equity stake proposal, this is a matter for consideration by concerned departments and agencies and all complaints were referred to them as per usual practice. [more - original PR]