There have been media reports over
the last few days on the India- UAE (Abu Dhabi) Bilateral Air Services
Agreement and on the Jet Airways-Etihad equity stake
proposal. Some of these reports have inferred that PMO is playing a role in the
Jet Airways-Etihad proposal.
2.
The allegations in some media are factually incorrect and baseless. 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.
Two Different Matters
- A Bilateral Air Services Agreement and a Private Equity Stake proposal
3.
There are two distinctly different matters being reported by the media. The
first is the enhancement of seat entitlements under a Bilateral Air Services
Agreement between India- Abu Dhabi. This is an inter-government agreement on
bilateral air traffic seat entitlements and concerns the governments of the two
countries. The second is an equity stake proposal between Jet Airways and Etihad which is a private agreement between two private
entities. Such agreements, as they involve foreign direct investment, have to
be as per the laws of the land and any government policies in place in this
regard. Being distinct issues and between different categories of entities, the
two matters need to be handled separately without mixing them up.
Seat Entitlements
under the India - UAE (Abu Dhabi) Bilateral Air Services Agreement
4.
As far as the Bilateral Air Services Agreement is concerned, the facts are
simple. Changes in seat entitlements under Bilateral Air Services Agreements
are normally entered into by the Ministry of Civil Aviation with its
counterparts in other countries. These changes are done through an MOU and do
not need approval at higher levels.
5.
However, on 22.4.2013, the Minister of Civil Aviation, 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. This is how the matter came up to the Prime Minister's level. The Prime
Minister directed the Finance Minister to hold a meeting with the Ministers of
Civil Aviation, External Affairs and Commerce & Industry to discuss the
matter in detail. The Ministers met and agreed to a proposed mandate for the
bilateral negotiations. The Minutes of this meeting, issued by the Finance
Minister, refer to this and are annexed.
6.
Later on the same day (22.4.2013), the Ministers met the Prime Minister to
discuss the matter. This was attended by the NSA and the Principal Secretary to
PM. In this meeting, the pros and cons of the enhanced seat entitlement were
discussed, including the reasons for the mandate that was being finally given.
At the end of the discussions, it was agreed to give an 'in-principle' go ahead
to the negotiating team as per the formulation mentioned in the minutes of the
earlier meeting.
7.
The Prime Minister subsequently, on 26.4.2013, asked for the matter to be
brought to the Cabinet. He even spoke to the Minister of Civil Aviation in this
regard. On 29.4.2013, the PMO asked the Ministry of Civil Aviation formally to
bring the matter to the Cabinet followed by a reminder on 20.5.2013. The
note sent by PMO is annexed.
8.
Subsequently, a note was received in the PMO on the impact of Middle eastern Carriers on our aviation sector. This was sent on
22.5.2013 to the Ministry of Civil Aviation for consideration.
9.
When the Cabinet Note was received by PMO, it was felt that the Note should be
reformulated to reflect the sequence of events and the discussions more
accurately as its current formulation did not explain the detailed examination
of the matter that had taken place on 22.4.2013. An accurate description of
issues would make it easier for readers of the Cabinet Note to understand the
multiplicity of issues that have a bearing on the matter and the reasoning
behind the mandate. It was in this context that PMO sent a Note to the Ministry
of Civil Aviation on 13.6.2013 to redraft the Cabinet Note. The note sent by
PMO is annexed.
Jet Airways Etihad Equity Stake Proposal
10.
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.
Complaints about the
Agreement
11.
The Prime Minister has received the following letters on the matter:
i.
Letter from Shri Gurudas Dasgupta dated 1.5.2013
ii.
Letter from Shri Prabodh Panda dated 2.5.2013
iii.
Letter from Dr. Sucharu Ranjan Haldar, MP dated 3.5.2013
iv.
Letter from Dr. Subramanian Swamy
dated 29.5.2013
v.
Letter from Shri Jaswant Singh, MP dated 31.5.2013
vi.
Letter from Shri Ajay Sancheti dated 13.6.2013
vii.
Another letter from Shri Ajay Sancheti dated 21.6.2013
12.
Some of these letters were related to the India-UAE(Abu
Dhabi) Bilateral Air Services Agreement and some were related to the Jet
Airways - Etihad equity stake proposal. The action
taken on each of these letters is as follows:
i.
Matters relating to the Air Services Agreement were referred
to the Ministry of Civil Aviation for examination and appropriate action.
ii.
Matters relating to the the Jet
Airways - Etihad equity stake 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.
iii.
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.
13.
As far as the Bilateral Air Services Agreement was concerned, the Cabinet Note
was asked to be kept in abeyance till responses on letters with complaints on
the agreement and on security concerns were received.
Conclusions
14.
Some of the facts to be noted from the above
are:
i.
The Minister of Civil Aviation approached the Prime Minister
seeking clearance for concluding the seat entitlement
MOU.
ii.
The Prime Minister directed the Finance Minister,
along with other Ministers, to examine the matter.
iii.
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.
iv.
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.
v.
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.
vi.
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.
15.
Media reports which selectively report some of the above facts or documents or
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.
