M A I N   N E W S

Govt blames NDA for VVIP copter mess
Says changes made after Brajesh Mishra’s observations
Asks manufacturer for details of ‘bribes’
Tribune News Service

AgustaWestland copter deal: The fine print Under provisions, India can cancel the contract and recover the money AgustaWestland did not declare its agents; agents not allowed under Indian rules The copter maker is under contract to not pay any amount to any individual or firm for the deal India can cancel the deal without any entitlement or compensation to the helicopter maker The firm will be liable to refund payments made by India in terms of the contract with interest The MoD can bar the company from entering any government bid for at least five years

New Delhi, February 14
Apportioning blame on the Atal Behari Vajpayee-led PMO, the Ministry of Defence today said specifications in the VVIP helicopter deal were mooted in 2003, while it separately asked AgustaWestland to categorically state its financial transactions with agents in India.

The letter to AgustaWestland is the first indication that the deal is to be cancelled with imposition of financial penalties on the helicopter maker and recovery of all money with interest, sources said.

India had ordered 12 helicopters for VVIP use from AgustaWestland, a subsidiary of Finmeccanica. The Rs 3,500-crore deal was signed in February 2010 and the first lot of three helicopters was delivered last December. The delivery of the remaining nine, which were scheduled to be delivered in batches by March 2014, was put on hold yesterday. Allegations of bribery surfaced after Italy arrested the Finmeccanica CEO Giuseppe Orsi and the MoD ordered a CBI probe on February 12.

Today, the defence ministry issued a seven-page “factsheet”. It narrated how the operative requirements (specifications) were changed following the observations of Principal Secretary to PM (Brajesh Mishra) in November 2003. It also exposed former IAF Chief SP Tyagi’s claim that “no specifications were changed in my time as Chief ”.

The MoD note said the new specifications were deliberated between the IAF, Special Protection Group, PMO and MoD between March 2005 and September 2006 and the changes were incorporated. SP Tyagi was IAF Chief between December 31, 2004 and March 31, 2007.

The factsheet says: “The Principal Secretary to the PM observed on November 19, 2003 that his main concern was the framing of the mandatory requirements had led into a single vendor situation. The PM and President rarely visit places involving flying at an altitude beyond 4,500 metre. It was decided to make the mandatory requirement for operational altitude 4,500 metre. The higher flying ceiling of 6,000 metre and cabin height of 1.8 metre could be made desirable operational requirements. It was observed that with these revisions, several helicopters which otherwise met all requirements but had been rejected due to the altitude restriction, would now come into the reckoning.” One of them was AW 101 of AgustaWestland, which was later selected.

In the first global tender issued in March 2002, only the Eurocopter EC 225 was found suitable for acquisition. The AgustaWestland helicopter was not certified to fly at 6,000 metre while the Russian M-17-2 did not meet mandatory requirements. This made it a single vendor situation -- not permitted under defence procurement rules.

“On December 22 , 2003, the Principal Secretary to the PM asked to draw up realistic mandatory requirements satisfying operational, security and convenience requirements and also set in motion a fast track process for selection and acquisition,” the note says.

In May 2004, the NDA lost the elections and the UPA was voted to power. Now President, Pranab Mukherjee was the Defence Minister between May 23, 2004 and October 24, 2006.

The note now explains: “The Acceptance of Necessity (AON) for the procurement of 12 helicopters was accorded by the Defence Acquisition Council under the ‘buy’ category on January 3, 2006. The request for proposal (RFP) was issued to six vendors on September 27, 2006.”

Besides AgustaWestland, Sikorsky of USA and. Russian MI-17-2 responded to the RFP. The Staff Evaluation Report found the AW-101 to be fully compliant as a VVIP copter. The Technical Oversight Committee constituted on August 6, 2008, found that the field evaluation trials and selection of vendors were done according to prescribed procedures.

Since February 2012, the MOD has been following up with the Italians on getting details. A formal request was made by the Indian Embassy to the Naples prosecutors’ office on July 16, 2012. On a complaint by Edmund Allen of Ganton Limited, USA, the MoD had written on April 19, 2012 to the CBI and Enforcement Directorate for necessary action. The ED said it was probing the allegations. The MoD sounded the income tax authorities.