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Tender norms tweaked to suit AgustaWestland: CAG
Ajay Banerjee/TNS

The observations There were violations of “defence procurement procedure” in the contract for helicopters The Defence Ministry deviated from procurement procedure and tender on several instances in the deal The IAF did not even conduct “field evaluation trial” of AW-101 of AgustaWestland, instead Merlin MK-3A and CiV-01 helicopters of the same company were used for the purpose

New Delhi, August 13
In a damning report on the purchase of the 12 VVIP helicopters at a cost of Rs 3,726 crore, the Comptroller and Auditor General (CAG) today pointed an accusatory finger at how the purchase was made by specifically changing the tender to suit AgustaWestland, an Anglo-Italian firm.

It has apportioned the blame of tweaking the tender to a period when former Air chief Marshall SP Tyagi was the IAF Chief. The report signed by former CAG Vinod Rai has dragged in another former IAF Chief, Fali Homi Major for having allowed the trials of the helicopters to be conducted outside the country and on copters that were not even the ones that India was buying. It narrates how the crucial aspect of lowering the flying ceiling from 6,000 m to 4,500 m was done at orders of the Prime Ministers Office in November 2003, during the time of the BJP-led NDA rule. This was later implemented during the UPA rule in early 2006 by drafting requirements that suited AgustaWestland.

AgustaWestland is already facing criminal charges in Italy. In India, the CBI has named SP Tyagi and his three brothers for allegedly receiving cash to tweak the deal in favour of AgustaWestland.

The CAG said the initial “request for proposal” (RFP) issued in March 2002 for replacement of the Mi-8 helicopters for VVIP flying stipulated a mandatory altitude requirement of 6,000 m. “The EH-101 helicopter (later renamed as AW-101 of AgustaWestland) could not be field evaluated as it was certified to fly up to an altitude of 4,572 m only. The first RFP was subsequently cancelled due to emergence of a resultant single-vendor situation.” Indian Defence procurement rules do not allow purchases when only a single vendor is in the fray.

In the revised RFP issued in 2006, the mandatory “service qualitative requirement” (SQR) relating to altitude requirement of 6,000 m was reduced to 4,500 m and a cabin height of at least 1.8 m was introduced. “The mandatory requirement of having a minimum cabin height of 1.8 metre reduced the competition, the lowering of altitude requirement was against the inescapable operational requirement of 6000 metre for transportation to many areas in the North and the North-East, said the CAG.

The purpose of re-framing the SQRs was to avoid a single-vendor situation. The second acquisition process, again led to a single-vendor situation but AW-101 of AgustaWestland was selected.

In March 2002 (while the NDA was in power), the PMO objected to a single-vendor situation and later in November 2003 suggested lowering the flying ceiling from 6,000 m to 4,500 m and having a cabin height of 1.8 m. “In the revised RFP of 2006, issued during the UPA’s time, instead of making the SQRs broad-based to increase the competition, these were made more restrictive, thereby narrowing down the choices to a limited range of helicopters”. SP Tyagi was the IAF chief at that time.

The CAG says the IAF did not even conduct “field evaluation trial” (FET) of AW-101 of AgustaWestland. Merlin MK-3A and CiV-01, helicopters of the same company, were used for the purpose, and not on the actual helicopter.