CBI in London over Airbus deal

The 8,399 crore deal to buy 43 aircraft was finalised during the UPA-I regime when NCP leader Praful Patel, a confidante of Sharad Pawar, was the Civil Aviation Minister
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A Central Bureau of Investigation (CBI) team is to visit London next week to inquire into alleged graft in the purchase of Airbus aircraft almost a decade ago, informed sources said.

 The 8,399 crore deal to buy 43 aircraft was finalised during the UPA-I regime when NCP leader Praful Patel, a confidante of Sharad Pawar, was the Civil Aviation Minister
The 8,399 crore deal to buy 43 aircraft was finalised during the UPA-I regime when NCP leader Praful Patel, a confidante of Sharad Pawar, was the Civil Aviation Minister

The team will examine Airbus Executive Vice President Kiran Rao in connection with alleged irregularities in the over Rs.8,399-crore deal for 43 aircraft for the erstwhile Indian Airlines in 2005, the sources said.

The sources said Rao would be questioned for alleged non-fulfilment of contract conditions.

“Investigations conducted so far have thrown up some questions on the basis of which we will seek clarifications from Airbus executive vice-president Kiran Rao,” said a senior CBI official. The move indicates that the investigation is being speeded up. The deal was finalised during the UPA-I regime when NCP leader Praful Patel was the Civil Aviation Minister.

The deal came under the CBI scanner, and the agency registered a case in March 2013 against seven senior functionaries of Indian Airlines, which was later merged with Air India, and Airbus, The Hindu reported.

The CBI had about three years ago instituted a preliminary inquiry into the delay in fulfilment of certain conditions of the contract requiring Airbus to assist in the setting up of a maintenance, repair and overhaul unit, a warehouse and a training centre at a total cost of $175 million. Airbus then denied charges of any irregularity.

“While the preliminary inquiry was concluded in 2012, the Civil Aviation Ministry granted permission to prosecute the airline officials in 2013, following which a regular case was registered,” the official said.

In its Performance Audit Report on Civil Aviation in India (2011-12), the Comptroller and Auditor-General of India said: “The commitments made by Airbus regarding creation of MRO and training facilities were quite open-ended. Unlike the other clauses, there was no mention of a timeframe by which such facilities will be created … It was not clear who or what combination of promoters (Airbus and/or other entities) would together make up the required investment.”

The clearance to go ahead with the deal was given in September 2005 by an Empowered Group of Ministers, headed by the then Finance Minister, P. Chidambaram. The EGoM nod came after it concluded talks with an Airbus delegation. At that time, Mr. Patel said Indian Airlines could go ahead with the purchase of 19 A-319, four A320 and 20 A-321 aircraft. The new passenger jetliners were meant to replace 70 per cent of Indian Airlines fleet.