The Telegraph
Saturday , February 16 , 2013
Since 1st March, 1999
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Delhi activates notice to kill chopper deal
Deadline timed to budget session

An AgustaWestland AW101 helicopter — the same model that was contracted for Indian VVIPs — flies the villain Silva (Javier Bardem) above the family home of James Bond in Skyfall before the final confrontation. Silva is killed and the house, also called Skyfall, destroyed in the scene

New Delhi, Feb. 15: The Indian defence ministry today set AgustaWestland a week’s deadline, expiring around the time the budget session is due to begin, to explain why the euro 556-million contract for VVIP helicopters should not be cancelled.

The Skyfall-to-windfall-to-downfall story is now set to conclude with the scrapping of the contract for James Bond helicopters that New Delhi was buying for about Rs 300 crore apiece for its VVIPs.

“We have sent a showcause notice to the company and asked for its reply in seven days starting today. This is the beginning of the contract termination process,” defence ministry spokesperson Sitanshu Kar said.

Investigations into Finmeccanica, AgustaWestland’s holding company, began in Italy in February last year on corporate governance issues. A court in Italy has since then stumbled upon evidence that the company routed bribes to Indian functionaries through a network of third-country outfits and cousins of Air Chief Marshal (retired) Shashi P. Tyagi. The former chief of the IAF has denied the charges.

After idling for over a year from the time the investigations began in Italy, defence minister A.K. Antony has acted with speed since the arrests of the companies’ chief executives last week.

Antony, who wears his clean image on his sleeve, may also be seen as eating humble pie. Only yesterday, the fact sheet from the defence ministry stated: “The procurement case… progressed in accordance with the established procurement procedure in a transparent manner with all stages of procurement being followed meticulously.”

Part of the reason for that speed is explained by the many powerful functionaries that the investigations could singe despite the fact sheet tracing the origins of the deal to then Prime Minister A.B. Vajpayee’s NDA government and to then national security adviser Brajesh Mishra.

Earlier in the week, Antony had asked the CBI to probe the deal. It followed, naturally, that in investigating the contract the CBI could be expected to interview ministers, secretaries, former air chiefs and other officials since 2003 who would have shaped the contract that was signed on February 8, 2010, when Antony was the defence minister.

Four of the persons involved have constitutional immunity — President Pranab Mukherjee, who as defence minister and finance minister authorised and approved it; Shekhar Dutta, who was defence secretary and is now Chhattisgarh governor; M.K. Narayanan, who was national security adviser and is now Bengal governor; and B.V. Wanchoo, who was director-general of the Special Protection Group and is now Goa governor.

Defence ministry sources said Antony was agonising over the steps to be taken because of the manner in which his image was being sullied.

Last November, The Telegraph reported how a remorseful defence ministry made an exception by granting a commission to an injured IAF cadet who met with an accident because the purchase of modern trainer aircraft was delayed for lack of funds but there was enough in the kitty for VVIP choppers.

Even in January 2010, after the cabinet committee on security had cleared the contract for 12 AW101 VVIP helicopters, Antony was queasy about the rejection by the finance ministry of mid-air refuellers — an operational necessity for the IAF — but the sanction to the VVIP helicopters.

“All purchase proposals go to the finance ministry and the finance minister is also a member of the cabinet committee on security,” he had said in a news conference on February 15, 2010.

“Unless the finance ministry supports a proposal (for a defence acquisition), the CCS cannot take it up. In that (the mid-air refueller) case, the finance ministry categorically told us that they will not support the proposal in the CCS.

“For the (VVIP) helicopters, which were evaluated not only by the IAF but also by the SPG because of the threat perception, the finance ministry agreed to take it up with the CCS. And the CCS took a considered view that in this case we have to proceed,” Antony explained.

Defence ministry sources today said the showcause notice had asked AgustaWestland why the contract should not be terminated following the Italy probe findings. The notice followed information from the Indian embassy in Rome that the investigations were credible.

Only yesterday, Antony had written to the company to ask if it had paid bribes. Today’s decision supersedes every other taken on the deal earlier, the ministry spokesperson said.