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Civil Aviation Minister Ajit Singh on Thursday met United Progressive Alliance (UPA) Chairperson Sonia Gandhi in the backdrop of the controversy over the enhancement of bilateral air traffic rights to the United Arab Emirates (Abu Dhabi).
Sources said the meeting was of a political nature as Gandhi is UPA Chairperson and Singh's Rashtriya Lok Dal is part of the ruling coalition.
Singh said he had gone to invite Gandhi for the laying of the foundation stone of the Aviation University to be set up in Rae Bareli. "The Airports Authority of India wants the foundation stone to be laid before July 15. I had written to her on June 25 and had sought an appointment two days back. So, I went and met her to extend an invitation." The issue of the controversial Jet-Etihad deal is understood to have come up during the meeting.
The ministry of civil aviation signed a memorandum of understanding with the UAE on April 24 this year to enhance the number of seats between the two countries. On the same day, Etihad Airways said it was picking up a 24 per cent stake in Jet Airways for Rs 2,058 crore. The Jet-Etihad deal is the biggest in the Indian aviation sector after the government liberalising foreign direct investment (FDI) norms in aviation. Both developments sparked off controversy.
BJP leader Jaswant Singh, CPI's Gurudas Dasgupta, Trinamool Congress' Dinesh Trivedi and Janata Party chief Subramanian Swamy have written to the Prime Minister criticising the deals.
On June 14, the Foreign Investment Promotion Board deferred a decision on the Jet-Etihad deal, saying it required more clarity. The Securities and Exchange Board of India and the ministry of corporate affairs raised objections over issues of effective control of Indian airlines after the acquisition by the West Asian carrier. The civil aviation ministry too raised concerns on a plan outlined by the two airlines to shift some of the operational departments of Jet to Abu Dhabi, which in effect would mean moving the "principal place of business" out of India.
Singh defended the deal, saying those opposing it were "long on politics and short on facts .... 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."
The Prime Minister's Office (PMO) tried to firefight the controversies, stating the decision to enhance seats on the India-Abu Dhabi route and the Jet-Etihad deal were "distinct issues and needed to be "handled separately". The government said the Jet-Etihad deal was between private parties, which needed to be approved by the agencies concerned. It has clarified the alliance is under examination of regulatory bodies.
The PMO has now asked the civil aviation ministry to prepare a Cabinet note for post-facto approval of the agreement.
