AgustaWestland chopper deal

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India scraps $770 million AgustaWestland chopper deal; BJP targets Gandhis
Just to save the name and to avoid the defamation of the first family of the Congress, they (the government) have declared their intention to cancel the deal, BJP spokesperson Prakash Javadekar said

New Delhi: India on Wednesday terminated the Rs.3,600 crore (about $770 million) deal with AgustaWestland for the purchase of 12 VVIP choppers over allegations of kickbacks having been paid to fix the deal. In a statement, the defence ministry said: The government of India has terminated with immediate effect the agreement that was

signed with Messrs AgustaWestland International Ltd. (AWIL) on Feb 8, 2010, for supply of 12 VVIP/VIP helicopters on grounds of breach of pre-contract integrity pact and the agreement by AWIL. Based on the opinion received earlier from the Attorney General of India, it has been the view of the government that integrity related issues are not subject to arbitrations. However, AWIL has since pressed for arbitration and appointed an arbiter from its side." "In view of this, the MOD (ministry of defence) sought afresh the opinion of the Attorney General. With a view to safeguard the interest of the government, MOD has nominated Justice B.P. Jeevan Reddy as its arbitrator. Scrapping of the deal with AgustaWestland - the British subsidiary of Italian firm Finmeccanica - comes more than a year after reports that two top officials of the company allegedly paid bribes to bag the contract for the chopper maker. AgustaWestland has already delivered three of the choppers. The cancellation came after Defence Minister A.K. Antony met Prime Minister Manmohan Singh earlier in the day, defence ministry sources said. India froze payments for the VVIP choppers after Finmeccanica's then chief executive was arrested in Italy in February for allegedly paying bribes of Rs.360 crore to secure the deal. On Oct 21, the defence ministry issued a show cause notice to the Anglo-Italian firm for cancellation of the deal and was given time till Nov 26 to reply. AgustaWestland then sought a meeting with the ministry and was been given 15 days' more to reply to the notice. Faced with cancellation of the deal, the firm earlier this month sent a notice to the defence ministry, asking it to get involved in the arbitration process. The deal was inked in February 2010 for supply of 12 VVIP helicopters to IAF. India had paid around 45 percent of the total contract value for the choppers which were meant to ferry the president, the prime minister and other VVIPs. Former Indian Air Force chief S.P. Tyagi had come under the scanner in connection with the kickback allegations. Congress trying to shield Gandhis: BJP The Bharatiya Janata Party (BJP) on Wednesday said the Congress-led UPA Government cancelled the AugustaWestland deal to shield the first family of Indian politics, and restated that the Congress is synonymous with corruption. "Just to save the name and to avoid the defamation of the first family of the Congress, they (the government) have declared their intention to cancel the deal. Though the choppers are good, but, it is the Congress which got indulged in corruption during the deal. The

stigma of corruption will not be washed as the Congress is synonymous with corruption, said party spokesperson Prakash Javadekar. Our issues is that already three choppers have been supplied to India, so what will happen to them and what price will be paid for them. Secondly, when such an international contract is cancelled, there is a penalty also. So what will in this? And who is responsible for such a loss, he added. Meanwhile, Communist Party (Marxist) (CPM) leader Sitaram Yechury welcomed the decision of the Congress and said the buck should not stop here as there are many people who indulges in corruption during the defence deals. It is very good news. Finally they have realized that there is something fishy in this deal. But it shouldnt just stop here. I think there are people who are involved in this sort of graft in the defence deals. This is not an isolated incident, he said. "This is what the Left have been saying, that the defence deals are defenseless as they are full of graft. It is something which needs to be pursued further. Mere cancelling of deal, though it is good, is not sufficient, he added. India took delivery of three helicopters before the deal stalled. Three more have been ready for delivery to India since April 2013, three were close to completion, and work had begun on the final three at the AgustaWestland plant in Britain. Though AgustaWestland and Finmeccanica both denied any wrongdoing, the Indian defence ministry has over the past year maintained that there was very little chance of the contract being finalised, especially with Defence Minister A.K.Antony completely opposed to it because both companies had been charged with violating the integrity pact. Under India's defence procurement rules, the integrity pact prohibits paying or accepting bribes. The government can cancel a contract if the pact is violated, and the seller has to forfeit any security money it deposited as a bidder. In October 2013, AgustaWestland had called for arbitration in the dispute, but the Indian defence ministry said there is no case for such action as the firm had breached the integrity pact. The Comptroller and Auditor General of India (CAG) said in August last year that the defence ministry had initially stipulated that the helicopters should be able to fly to an altitude of 6,000 metres (19,685 feet), which meant that AgustaWestland could not compete since the AW101 was certified to fly only to 4,572 metres (15,000 feet). Later, the minimum altitude requirement was lowered to 4,500 metres (14,763 feet), even though the helicopters were expected to be used in mountainous northern and

northeastern parts of the country where altitudes are higher, it said. India is the world's largest arms importer and plans to spend USD 100 billion on defence equipment over the next decade.