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    Aviation Ministry says no to prosecution of official in Airbus case

    Synopsis

    CBI held former joint secretary MP Vijay Kumar responsible for not availing $175 million concession from Airbus Industrie.

    NEW DELHI: The civil aviation ministry has refused CBI sanction to prosecute a former joint secretary who, along with five other officials, was allegedly responsible for not availing of $175 million worth of concession from Airbus Industrie. The case relates to the 2006 purchase order of 43 aircraft from Airbus for Indian Airlines.

    An Empowered group of ministers (EGOM) had negotiated $175 million worth of concessions before finalising the order. CBI says these concessions were not extracted from Airbus.

    The civil aviation ministry's letter, written last week, urges CBI to 'review' its decision to seek clearance for prosecuting former joint secretary MP Vijay Kumar, who is now a member of the Airport Economic Regulatory Authority (AERA).

    "We disagree with the fundamental principle on which CBI is basing its case because the investment that Airbus is supposed to make in India is not Indian Airlines specific. They are ready to invest in India anyway and they are not going back on that commitment. We have written to CBI to not investigate this case at all as it is flawed," the official told ET.

    CBI cannot register a regular case unless it gets the parent ministry's consent to probe the role of an official of the rank of joint secretary and above. In all likelihood, CBI will resend the request to the civil aviation ministry to grant sanction to prosecute Kumar.

    Along with Kumar, CBI has also found five other officials of the ministry, at the rank of director and below, and a senior official of Indian Airlines to be responsible for not taking action against the European consortium that makes Airbus despite its failure to execute the concessions.

    All the seven officials were members of the purchase committee of Indian Airlines, which has now been merged with Air India. The senior Indian Airlines official is now an additional secretary in the government

    With the ministry effectively turning down CBI's request for approval for conducting an inquiry against Kumar under the Prevention of Corruption Act, all other officials implicated in the case have earned a breather.

    The 8,400 crore aircraft purchase contract had been inked between Airbus and Indian Airlines in February, 2006. In the run-up to the deal, the EGoM had after protracted negotiations succeeded in securing an assurance from the consortium for setting up a host of facilities, including a maintenance, repair and overhaul (MRO) centre at a cost of $100 million, a training institute whose cost was pegged at $75 million, and a warehouse for spares, whose cost was not specified.

    The final round of negotiations of the EGoM with representatives of Airbus Industrie was held on September 6, 2005. The Letter of Intent between the two sides was signed on December 16 that year.

    CBI registered a preliminary inquiry against `unknown officials' early last year for allegedly watering down provisions by which the aircraft supplier was bound to set up the add-on facilities, including the MRO and the training centres and a warehouse.

    The issue had been probed in detail by CAG, which had included the deal in its report tabled in Parliament on September 8. The audit watchdog had come down heavily on the civil aviation ministry for "the non-fulfilment of manufacturer commitments in respect of MRO and warehouse facilities. Only the flight training at Bengaluru and full flight simulator for A320 aircraft and ATR had started operations in November 2007.
    ( Originally published on Nov 19, 2011 )
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    1 Comment on this Story

    kapil singh3395 days ago
    The issue of

    " fundamental principle on which CBI is basing its case"

    needs to be argued in Court after named FIR .

    Judges can only Decide .
    The Economic Times