Ajit defends Jet-Etihad deal; PMO says no rift

The Prime Minister’s Office (PMO) on Tuesday stated that the controversial bilateral air service agreement between India and Abu Dhabi, which allows an additional 40,000 seats per week to the Gulf country’s carriers, has been deferred till security concerns raised by several politicians are addressed.

Civil Aviation Minister Ajit Singh on Monday strongly defended the Rs 2,058-crore Jet-Etihad deal, saying that he will address all queries on the issue.

“It is such an important deal. The first big deal in the Civil Aviation Ministry. In terms of FDI, it is bigger than any other deal this year. There are so many dimensions to it. Those opposing the deal are long on politics and short on facts,” Singh told reporters.

Denying any rift between the ministers and Prime Minister Manmohan Singh, the PMO in a release said: “The allegations in the media are factually incorrect and baseless. 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 of the Bilateral Air Services Agreement nor is the PMO trying to do an U-turn on the issue now.”

The PMO’s clarification came amid objections to the deal, first raised by a parliamentary standing committee headed by CPM MP Sitaram Yechury and followed by senior MPs Jaswant Singh and Dinesh Trivedi and Janata Party chief Subramanian Swamy, who shot off letters to Singh.

In May, the Civil Aviation Ministry had sent a note to the CCEA on the bilateral air services negotiations with the UAE to the PMO.

The ministry approached the PMO for its permission to sign an MoU with Abu Dhabi, overriding Finance Minister P Chidambaram-headed inter-ministerial group (IMG), set up by Singh to address concerns over air service matters.

The PMO said the IMG had briefed Singh on the agreement reached between the ministers to give a mandate to the negotiating team to allow 40,000 seats per week in a phased manner over the next few years, accompanied by a third party code sharing (handling of traffic with designated airlines of a country other than the two) and domestic code sharing.

“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 PMO stated.

BJP spokesperson Shahnawaz Hussain questioned the need to take the matter to the Cabinet when these issues are handled at a much lower level. He recalled that during the NDA regime, when he was the civil aviation minister, they had sorted such bilateral issues at the inter-ministerial group level.

 The PMO said Singh’s decision was “much before any of the letters complaining about the seat entitlement enhancement or the Jet-Etihad equity stake were even received.”