VVIP chopper scandal: Govt issues showcause notice to AugustaWestland

NDTV, 15-02-2013 12:44:28

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New Delhi: The Indian government has issued a showcause notice to British company AgustaWestland asking why it should not cancel a Rs. 4000-crore contract for the supply of 12 helicopters, after allegations that it bribed Indian officials to land the deal. AgustaWestland has seven days to respond to the notice.

This is being seen as a step towards scrapping the deal. The contract mandates that a showcause notice be sent before cancellation. It also includes a strong integrity clause that Defence Minister AK Antony has said India will invoke if it gets evidence of kickbacks being paid in the deal. It allows India to get back the money paid so far to the British company and, Mr Antony said, blacklist the company.
India has paid about 35% of the total amount and AgustaWestland has delivered three helicopters.

The Defence Ministry had earlier written to AgustaWestland asking it to explain if it had paid bribes in India. That was followed up with the showcause notice today after India received an authenticated copy of Italian court documents that allege that AgustaWestland bribed Indian public officials to ensure revisions in the tender, without which the British company would not have made the cut.

The CBI is already investigating the deal after the arrest this week of the CEO of Italian defence giant Finmeccanica, the parent company of AgustaWestland, in Italy after a two-year investigation.

Italian prosecutors say that former Air Chief Marshal SP Tyagi was paid to ensure that technical specifications were changed to suit AgustaWestland.
They say his cousins were paid 12 million euros or Rs. 86 crore, and that a middleman for AgustaWestland met with SP Tyagi six times, allegedly to discuss the contract. Air Chief Marshall (retired) Tyagi has denied the charges.

Yesterday, the government also issued a detailed fact sheet to highlight that the changes to the tender were requested by its predecessor, the BJP-led NDA coalition. The revisions to the tender were requested and finalised in 2003, when the BJP-led NDA coalition was in power with Atal Behari Vajpayee as prime minister. But it was in 2006, that the new requirements were notified. By then, Dr Manmohan Singh was Prime Minister and Pranab Mukherjee was Defence Minister. SP Tyagi was Air Force chief.

The government wants to stress that the alleged scam originated when the BJP was in power; the Opposition party counters that the deal was signed in 2010 on the Congress’ watch.

The Italian enquiry says that two critical alterations to the original tender were dictated by AgustaWestland: the height at which the helicopters were required to fly was lowered from 18,000 feet to 15,000 feet; and engine failure flying test was added.
This favoured AgustaWestland as its helicopters were the only ones in the tender operating with three engines.

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