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India scraps AugustaWestland VVIP chopper deal on New Year`s Day

By Supriya Jha | Last Updated: Thursday, January 2, 2014 - 09:05

Zee Media Bureau

New Delhi: Apparently not satisfied by the explanation provided by officials of AugustaWestland over bribery charges, Indian government on New Year`s maiden day ordered the Rs 3,600 crore scandal-tainted VVIP chopper deal to be cancelled, reports quoted defence sources as saying.

The decision by Ministry of Defence came after a meeting between PM Manmohan Singh and Defence Minister AK Antony on Wednesday morning.

The scrapping of the deal with AugustaWestland – the British arm of Italian firm Finmeccanica - could now open the doors for fresh contract with other chopper companies like United Technologies Corp`s Sikorsky Aircraft, EADS` Eurocopter and Lockheed Martin. 

Casting aspersions on the cancellation of the deal, the opposition Bharatiya Janata Party leader Prakash Javadekar tweeted that it was an act done to avoid embarrassment to the "first family".

He further questioned what penalty will India pay for the cancellation.

On the other hand, Communist Party (Marxist) (CPI-M) leader Sitaram Yechury welcomed the move saying, "Finally they have realized that there is something fishy in this deal. But it shouldn`t 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".

"Mere cancelling of deal... is not sufficient," reports quoted him as saying.

The deal struck with AugustaWestland for procuring 12 AW101 choppers for transporting top political officials came under scanner in February when the chief executive of Italian firm Finmeccanica was arrested by the Italian police under charges of paying bribe of Rs 360 crore to secure the deal.

Subsequently, the Indian government froze the payments on the Rs 3,600 cr deal.

Ex-IAF chief SP Tyagi also came under cloud in connection with the kick-back charges.

The Defence Ministry in October had issued a showcause notice to AugustaWestland, seeking to cancel the deal and had offered the company time till Nov 26 to reply.

Defence Minister AK Antony too, remained firm on Indian stance, reiterating that the company had violated the integrity pact, by paying bribes and hence the deal must be cancelled.

However, AugustaWestland had denied any wrongdoings in its reply.
Earlier, fearing the cancellation of the deal, AugustaWestland had attempted to invoke the arbitration clause of the contract. However, the Indian Defence Ministry poured cold water on the company`s hopes and ruled out any such arbitration, saying that it was not possible as there had been a violation of the integrity pact.

First Published: Wednesday, January 1, 2014 - 16:07
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