Amidst a waning “Rafale Scam”, a loud campaign parented by opposition parties which has been more noise and less substance, a long list of UPA era scams and financial wrong-doings have been discreetly under the scanner of investigative agencies and yet, another mammoth scam with the potential to gain prominence on the list is set to make headlines in the coming days. A Rs. 70,000 Crore passenger aircraft deal finalised by the UPA in 2006, has come back to haunt its top leaders.
According to Times Now news report on December 19, reporters from the leading French Newspaper Le Monde have met with top officials of Indian investigative agencies like the CBI and ED, in person. Le Monde has been involved in investigating corruption allegations against Airbus, European Aerospace corporation which has gained notoriety in the past few years for corruption in defence and aviation deals. The news report states that Le Monde may have sniffed something regarding Airbus’ business dealings in India as well. Airbus is under investigation in many countries in Europe including France, The United Kingdom, Germany and also the United States.
The CEO of the multinational giant, Tom Enders has acknowledged that Airbus has in the past relied on bribes as it rose to become the world’s second-largest airplane manufacturer, after its main business rival, Boeing. From running a slush fund for political bribes of millions of dollars, to reporting itself to the United States’ authorities for breach of its regulations on the use of middlemen to sell sensitive weapons technology, the company, with its 134,000 employees and its annual turnover of 67 billion Euros ($78.6 billion) could devastatingly bite the dust and hence, it has been conducting internal investigations and assuring concerned nations of cooperating with a self-reporting strategy.
The UPA-1 government, in December 2005, cleared the proposal for the purchase of 68 aircrafts from Boeing for Air India and the next year, Indian Airlines also signed up for buying 43 aircrafts from Airbus, totaling up to a mega-deal of Rs. 70,000 crore or about $10 Billion. The move to merge Indian Airlines and Air India was initiated in 2006 by the Manmohan Singh government and this mammoth deal came right after the merger was initiated, raising questions over its viability. The national carrier’s debt spiraled to such an extent that it could not recover from it till date. One FIR alleged that loans were taken from the U.S. and Indian banks to finance the deal, causing the airlines to go into debt. The Comptroller and Auditor General also had slammed the decision labeling it a “recipe for disaster” and remarked that the deal was “ill-timed” and that the financial case for merger was not “adequately valid”.
“The entire acquisition (for both Air India and Indian Airlines) was to be funded through debt (to be repaid through revenue generation), except for a relatively small equity infusion of Rs 325 crore for Indian Airlines. This was a recipe for disaster and should have raised alarm signals in ministry of civil aviation, Public Investment Board and the Planning Commission” the CAG report had stated. In December 2017, the Supreme Court directed the CBI to conclude the probe into the aircraft purchases in the next six months. Four FIRs followed after the Supreme Court’s directive and the findings of the CAG.
Several FIRs were then filed against unknown officials of the Civil Aviation Ministry and Air India. The FIRs also mentioned that a large number of aircrafts were leased without proper consideration of routes and price strategies, and while an aircraft acquisition programme was already under way. It was also alleged in an FIR that profitable routes and schedules were dropped by the National airline, which benefitted private players in the aviation market and resulted in huge financial losses to the government.
In October, 2018, the Enforcement Directorate filed as many as four Enforcement Case Information Reports (ECIR, an equivalent of FIR) to probe the alleged irregularities and possible generation of black money under the Prevention Of Black Money Act, PMLA. The ECIRs concern at least four deals from the UPA era which also include the deal 111 Airplane deal and the controversial merger between Air India and Indian Airlines.
The decisions taken by the Aviation Ministry under Prafulla Patel and the Manmohan Singh led UPA government have never come under fierce scrutiny despite having triggered or worsened, historically, the financial health of India’s national airlines. A deal of such an unprecedented scale facing charges of irregularities from the CAG itself raises serious questions and this sentiment seems to be shared by top investigative agencies, the CBI and the ED. This billion dollar deal could hold the power to change the political discourse currently dominated by an indeterminate, unsubstantiated and hypothetical, Rafale Scam. If these allegations do survive investigation, like the AgustaWestland scam, it could wreak havoc on the political ambitions of the Congress.