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    Default Jet-Etihad deal clouds relations with Arab world

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    Union finance minister P. Chidambaram , Jet Airways founder chairman Naresh Goyal and Civil aviation minister Ajit Singh


    The controversy over the Jet-Etihad deal and the political war between the finance and civil aviation ministries are causing deep embarrassment to India's diplomatic relationship with the Arab world. "Our plans to get investment from these countries will be hit if the Etihad-Jet deal runs into rough weather because our government's commitment is being doubted by these countries," a senior official told Mail Today.

    The United Arab Emirates (UAE) government has told India that it has been let down following their investment going sour. At the highest level and through the Indian envoy, Abu Dhabi has conveyed to New Delhi a list of grievances that needs to be addressed.

    Sour investment

    According to Abu Dhabi National Energy Company Taqa, Tamil Nadu owes it $100 million
    UAE lost $1 billion in Etisalat following the cancellation of the 2G licences by the Supreme Court
    Emaar Properties of Dubai had built a conven-tion centre in Andhra Pradesh and has run into trouble with the ED kicking off a probe. Emaar is the Gulf's largest land and real estate developer

    According to Abu Dhabi National Energy Company Taqa, Tamil Nadu owes it $100 million. Besides, UAE lost $1 billion in Etisalat following the cancellation of the 2G licences by the Supreme Court last February.

    Emaar Properties of Dubai had built a convention centre in Andhra Pradesh and has run into trouble with the Enforcement Directorate kicking off a probe. These issues echoed hard when commerce and industry minister Anand Sharma went to the UAE to seek investment and chair a high-level task force meeting between India and the Arab nation a few months ago.

    Besides, the Bilateral Invest-ment Promotion Agreement that the two nations are negotiating has run into rough weather. The Jet-Etihad deal riled Qatar, which feared that interest of Qatar Airways, which is seeking more slots in India, will be hit. Subsequently, Qatar conveyed its concerns to finance minister P. Chidambaram in May, who in turn wrote to the Prime Minister.

    Another senior official explained, "These countries are engaged in a bitter fight between airlines as it is tied to national prestige and a lucrative market and that is a leverage we have and should use it judiciously."

    This is just the tip of the iceberg. The battle between Gulf carriers is heating up. Representatives of Qatar Airways and Emirates are flying to India soon after the Prime Minister's Office (PMO) early this week announced that it is reviewing the Jet-Etihad deal, which gave Etihad 36,670 extra seats on flights between India and Abu Dhabi. Finance ministry sources confirmed that senior officials from Qatar Airways and Emirates have sought appointment with Chidambaram. "They (airline officials) could be meeting the FM sometime soon," said an official. Emirates also believes that it is losing out its market share and has told Indian diplomats in Dubai that there has to be a level playing field.

 

 

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