Antony to axe copter deal if bribes proved
Defence minister A.K. Antony said Wednesday the deal for procurement of 12 AW-101 helicopters for VVIP travel from Italian-owned AgustaWestland could be cancelled and the company blacklisted if the CBI report indicated any corruption in the deal. He also said strict action would be taken against anyone found guilty.
The minister said the Indian government can recover the entire contractual sum paid so far to AgustaWestland for the deal in case wrongdoing is established. Sources said further payments for the deal are likely to be suspended, and the deal itself may soon be put on hold.
Speaking a day after he ordered a CBI probe, Mr Antony said: “The moment we get a report from the CBI (on) whoever is found guilty, Indian or foreigner, we will take the strongest action against them. They have to pay the price for lapses. Nobody will be spared.”
News agency reports from Italy indicated prosecutors there have said two managers at AgustaWestland, a unit of defence giant Finmeccanica, helped pay kickbacks and that part of these kickbacks went to three brothers — Juli, Docsa and Sandeep Tyagi — related to Air Chief Marshal S.P. Tyagi (Retd), former Chief of Air Staff. These reports claimed Finmeccanica chief Giuseppe Orsi, who has now been arrested, hired US-born Guido Ralph Haschke, then a consultant for Finmeccanica, to lead dealings in India to secure the contract. Haschke and his partner Carlo Gerosa, the prosecutors said, had close ties with the Tyagi brothers.
The prosecutors alleged Orsi, along with current chief executive of AgustaWestland Bruno Spagnolini, paid 400,000 euros in consultancy fees to Haschke and Gerosa. “Of this, 100,000 euros in cash was given to the Tyagi brothers,” they said in the 65-page warrant. Other reports suggested kickbacks were intended to be paid or eventually paid to Air Chief Marshal Tyagi, during whose tenure the request for proposal for the deal was issued in 2006. (The former IAF Chief gas categorically denied this allegation.)
Meanwhile, at a meeting of the MoD defence acquisition council on Wednesday, the fate of yet another proposed helicopter deal for acquisition of 197 Light Utility Helicopters for the Army and IAF, was put on hold in the wake of mounting speculation that it could be cancelled. The acquisition process for the 197 helicopters itself was under the scanner for the past few months following allegations of discrepancies in evaluation trials.
The former Air Chief, Air Chief Marshal Tyagi, has also revealed that specifications on the altitude that the VVIP helicopter should reach was changed in 2003, while the NDA government was in power, when the PMO and SPG lowered it from 18,000 ft. to 15,000 ft. as there was a single-vendor situation with a French company. He said the initiative for the acquisition was begun in 2000 since then defence minister George Fernandes used to visit the Siachen Glacier regularly. He said specifications on increasing the height of the helicopter cabins was also increased for the SPG. He pointed out that while he had retired in 2007, the deal had been signed in 2010, and added that the specifications had not been changed after 2004. The request for proposal for the deal was issued in 2006, when Air Chief Marshal Tyagi was IAF Chief.
Mr Antony, when asked about the allegations against the former IAF Chief, said he had no information on this and added he would not name any individual until the CBI had submitted its report. “I assure you the moment we get a report from the CBI (on any wrongdoing), we will take action. The strongest action provided in the integrity pact, that includes cancellation of contract, blacklisting of the (guilty) company and criminal action will follow.”
The minister added: “Everything depends on the CBI report. Even if the Indian government pays any amount of money, as per the provision in the integrity pact, we can get back the entire money... Not a single pie from the Indian government we will lose.” The minister said the government “had not been sleeping” on the matter and it had repeatedly asked the Italian government for details once the allegations began to surface, but had not got any information.
On Tuesday, the Italian police arrested Finmeccanica CEO Giuseppe Orsi over bribes paid to secure the sale of 12 helicopters to India. Italy-based Finmeccanica is the parent company of AgustaWestland of the UK. India had signed the contract with AgustaWestland on February 8, 2010, at a cost of `3,546 crores. The bribes allegedly paid to middlemen are reported to be around `362 crores, about 10 per cent of the contract amount. Three of the 12 VVIP helicopters have already been delivered to India, and that of the remaining nine will remain suspended.
The CBI is, meanwhile, likely to seek the custody of all documents on the VVIP helicopter deal from the MoD to begin its probe into alleged kickbacks. The agency has also approached the Indian embassy in Italy to provide documents that may help it to register a preliminary enquiry into the matter. The CBI is also planning to seek the Enforcement Directorate’s assistance in this case.