Cabinet note on Abu Dhabi bilateral to be amended

UAE's promise of $50-bn investment in Indian infra won't be included

The civil aviation ministry has started making amendments to the Cabinet note on the bilateral air services agreement with the United Arab Emirates (UAE), as suggested by the Prime Minister's Office (PMO), to clear the air over enhanced entitlements made to Abu Dhabi. The first tranche of increased weekly traffic rights is expected to be allotted as scheduled before the start of the winter schedule, 2013.

Civil Aviation Minister Ajit Singh told Business Standard, "The note is being re-drafted to include the observations suggested by the PMO. It will soon be sent to the Cabinet for approval." Senior ministry officials, however, said the references to the commitment made by the UAE to invest $50 billion in the Indian infrastructural sectors in lieu of increased traffic rights would not find mention in the amended note.

A controversy had erupted over the decision of the Indian government to increase bilateral air traffic rights to UAE nearly four-fold to 50,000 seats a week, over-riding the recommendations of inter ministerial group (IMG) to enhance weekly entitlements by 26,000 seats. Prime Minister Manmohan Singh has put the matter in abeyance, directing it be brought to the Cabinet for a decision "in the interest of wider consultations and greater transparency". Defending the decision on the allotment of increased bilateral rights to Abu Dhabi, Ajit Singh said: "In three years starting 2007, as many as 35,800 seats were grated to Dubai without approval from IMG. Around the same time, permission for operating weekly flights for Lufthansa was increased from 50 to 74. At the time, Indian airlines were flying only seven times a week to Germany. UAE has been a friend for long and is the richest and most powerful emirate. Ministries concerned had to consider various things including the impact on trade and investment while granting the traffic rights."

In a note dated June 13, PMO said the note by the Cabinet Committee on Economic Affairs drafted by the civil aviation ministry should have mentioned it had brought certain issues to the notice of ministers for civil aviation, commerce & industry, and external affairs, including the fact that the department of economic affairs had reservations on the enhancement granted to the UAE arrangement.

"We are responding to all the concerns raised in the letters to PM. We are also attaching our comments on observations made by PMO in the meeting on April 22. There is no reason why the MoU should not be approved as scheduled before the winter session starting October," said a ministry senior. Of the entitlement granted to Abu Dhabi, 11,000 seats a week are scheduled to be allocated this winter session.