Jet-Etihad deal: No difference among ministries, deal under scrutiny, says Govt

Government Tuesday said the equity stake sale matter is still under examination and asserted that there were no differences between Ministries over the air services agreement between India and Abu Dhabi.

New Delhi: Amid a raging controversy over the Rs 2,058 crore deal between Jet Airways and Etihad, Government Tuesday said the equity stake sale matter is still under examination and asserted that there were no differences between Ministries over the air services agreement between India and Abu Dhabi.

The Prime Minister's Office (PMO) came out with a statement rebutting reports about objections to the deal raised by senior BJP leader Jaswant Singh, CPI's Gurudas Dasgupta, Dinesh Trivedi (Trinamool Congress) and Janata Party chief Subramanian Swamy, each of whom had shot off separate letters to Prime Minister Manmohan Singh.

Reports of rift within the Government on the India-UAE (Abu Dhabi) Bilateral Air Services Agreement and the Jet-Etihad equity proposal are "factually incorrect and baseless", the PMO said.

"There is absolutely no disagreement within the government or between the Ministers and the Prime Minister on the matter," it said.

"The Prime Minister is neither washing his hands off the Bilateral Air Services Agreement nor is the PMO trying to do a U-turn on the issue now."

On the stake sale issue, 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."

"As for the equity stake matter, that is a matter still under examination," it said, adding that the issues raised have been referred to the Civil Aviation Ministry, Department of Industrial Policy & 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 also referred to the Cabinet Secretary for examination to suggest whether there was a need to look into any issues afresh.

The statement came on a day when Cabinet Secretary A K Seth held a meeting with the Secretaries of the concerned Ministries and Departments to discuss the issue.

Etihad had on April 24 announced its decision to purchase 24 percent stake in Jet for Rs 2,058 crore. On June 13, the Foreign Investment Promotion Board (FIPB) deferred a decision on the deal, saying it required more clarity on control and ownership structure of Jet Airways. Jet chairman Naresh Goyal owns a 51 percent stake in the airline.

Strongly defending the deal, Civil Aviation Minister Ajit Singh said 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."

External Affairs Minister Salman Khurshid said the deal was being examined. "The FIPB has to approve any such deal and sometimes they ask for clarifications. I don't think any deal has halted. It is being examined as normally any deal has to be examined."

The PMO, in its statement, 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.

The Prime Minister had also 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."

Even as government defended the deal, CPI leader Gurudas Dasgupta wrote a second letter on the issue to the Prime Minister, saying granting of rights to UAE to operate flights to cater to 37,000 seats "are in fact the price paid by India, for benefitting Jet Airways, as without these licences Etihad was not interested in buying portion of Jet Airways."

In his earlier letter, he had claimed that the "cash rich Gulf airline may prevail upon Jet Airways to increase the flight undercutting the tariff and taking over large number of passengers who otherwise would have taken Air India."

BJP leader and former Civil Aviation Minister Shahnawaz Hussain said "there is something fishy in this deal. The PMO should clarify its stand on the issue."

Maintaining that bilateral issues "never go to the Cabinet", he said the inter-ministerial group decides on such matters and added that "the PMO is setting a new trend here."