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Tribune Exclusive
VVIP copter probe may blow lid off deal for aerial recce systems
IAF ex-Chief Tyagi’s name figures in $300 mn contract for intelligence multi-sensors
Man Mohan
Our Roving Editor

New Delhi, March 17
The investigation into the controversial VVIP helicopter deal could bring another mega military aviation contract related to an aerial surveillance spy agency, the Aviation Research Centre (ARC), into focus.

Former Indian Air Force Chief Air Chief Marshal SP Tyagi, who is in the eye of the storm for the deal, seems to be out of the frying pan into the fire because of his ‘association’ (after his retirement) with the decision making process in the $300 million ARC deal. Tyagi headed the IAF from 2004 to 2007.

The CBI on Wednesday filed an FIR against Tyagi and 12 others for alleged cheating and criminal conspiracy in the VVIP helicopter deal.

Signed in mid-2011, the ARC deal is about the procurement of two airborne reconnaissance multi-sensor imagery intelligence systems (ARMIS). The ARC, which monitors China and Pakistan borders, is a sister organisation of the Research and Analysis Wing (RAW), India’s external espionage agency.

The ARC contract was clinched by the ELTA Systems Ltd., a group and subsidiary of Israel Aerospace Industries (IAI), beating the US major Raytheon. Interestingly, the ELTA had purchased two Bombardier Global 5000 aircraft in January 2011, seven months in advance of the contract signing.

But the ARMIS have not arrived so far despite the payment of several instalments. Also, the ELTA has not been able to demonstrate its ‘working model.’ India has been attempting to build its own ARMIS for over a decade. Meanwhile, Pakistan has acquired a cheaper version of ARMIS.

After the ELTA was ‘chosen’ in 2010 on the basis of a much lower price compared to Raytheon, a three-member review committee, headed by the then Defence Secretary, was set up by the Prime Minister’s Office on March 11, 2011, to look into this contract following the allegations of irregularities in the ‘Request for Proposal’ (RFP), mainly that the ARC did not insist for a performance trial. Tyagi and a senior Finance Ministry official were other two members of this committee.

Sources say that in an earlier ‘internal review’ by the then Secretary (Public Grievances and Coordination) Ajit Seth had sided with other ministries’ view that the ELTA should have been selected after user trials, as was the practice in all such defence purchases.

Being the only member having technical knowledge, Tyagi’s ‘opinion’ reportedly carried weight in the ‘review committee.’ The committee allowed the deal to take off although it earlier wanted to go for a fresh tender. The basic issue of “design flaws and lack of airworthy prototypes” was also not addressed, claim top ARC and RAW sources.

Raytheon lodged a complaint with the Indian government and the Central Vigilance Commission. The US also reportedly took up the matter with New Delhi.

Tyagi’s close proximity with a former RAW chief and his ‘association’ with the decision-making process in the lucrative ARC contract has attracted the attention of investigators looking into the VVIP copter deal, sources said.

KC Verma was the RAW chief when the proposal for this contract was mooted in 2008. The ELTA was chosen when Sanjiv Tripathi was the ARC head. Soon after that, he became the RAW’s 19th chief. Just when the ARC deal was heading for the finale, Verma had voluntarily taken retirement six weeks before scheduled retirement, causing a vacancy, to enable Tripathi become the RAW Secretary in December 2010, just one week before he was scheduled to retire. Tripathi’s successor in the ARC, AB Mathur, had refused to sign the deal documents.

Perhaps, this was India’s first defence-cum-intelligence mega deal in which the buyer organisation, for strange reasons, did not insist for the demonstration of a working model. “Even for the purchase of a small firearm, one goes for a performance trial,” said a senior ARC officer, commenting that “a product of this kind is first judged by its technical credentials, trial performance and feasibility and not by the rock-bottom quotation.”

When contacted, former RAW chief Sanjiv Tripathi declined to meet and talk “about any matter” related to his previous organizations on the plea that “these are closely monitored by the adversaries.”

Tyagi, when contacted over telephone, also refused to meet and talk about “any issue” and said that “I am staying away from the media for a while.”

In response to The Tribune’s e-mail for comments, the IAI’s Deputy Corporate VP Communication, Doron Suslik, said “the IAI does not disclose details of its contracts with customers, Indian or others. It had won the ARMIS contract in a fair competition, having offered the lowest price compared to other companies, and fully complying with the contract’s technical specifications, terms and conditions. The IAI will provide all the systems as stated in the contract.”

How Tyagi is associated

After the ELTA was ‘chosen’ in 2010 on the basis of a much lower price compared to Raytheon, a three-member review committee, headed by the then Defence Secretary, was set up by the Prime Minister’s Office on March 11, 2011, to look into this contract. Former IAF chief SP Tyagi (pic) and a senior Finance Ministry official were the other members of this panel. Tyagi’s proximity to a former RAW chief and his ‘association’ with the decision-making process in the lucrative ARC contract has attracted the attention of investigators looking into the VVIP copter deal.

What is the ARC deal

It is about the procurement of two airborne reconnaissance multi-sensor imagery intelligence systems. The ARC, which monitors the borders with China and Pakistan, is a sister organisation of the Research and Analysis Wing, India’s external espionage agency.

Who clinched the deal

The ARC contract was clinched by the ELTA Systems Ltd., a group and subsidiary of Israel Aerospace Industries, beating the US major Raytheon. But the intelligence systems have not arrived so far despite the payment of several instalments. Also, ELTA has not been able to demonstrate its ‘working model.’