Govt won't take hasty decision on VVIP chopper deal

The Defence Ministry will not take any hasty decision and seek the opinion of the Law Ministry on the response given by the Anglo-Italian firm AgustaWestland, before taking any decision on the controversial VVIP helicopter deal, which may be scrapped eventually.

The company submitted its response to the Defence Ministry's show-cause notice on Monday – a day ahead of the deadline – but an official said the response and Law Ministry’s opinion would be studied first before any decision is taken on the contentious deal.

India had paid a substantial part of the Rs 3,700-crore deal and received three helicopters – two in VIP and one in cargo configuration – from the company. The money paid so far, is for six choppers.

The deal has been frozen since February, 2013 hours after Italian police arrested the top boss of Finmeccanica – the parent company – and the Defence Ministry ordered an enquiry by the Central Bureau of Investigation. The CBI is probing the role played by several individuals, including former Indian Air Force chief S P Tyagi and three of his brothers in the lucrative arms deal. The Comptroller and Auditor General too spotted several flaws with the VVIP chopper contract, signed in 2010.

The company last month initiated arbitration procedure against the Defence Ministry for unilaterally freezing the contract without providing any proof of wrong-doing on the company’s part. But the government made it clear that India would not be party to such unilateral arbitration.

There is “no question” of India getting involved in the arbitration process initiated by AgustaWestland in the chopper scam, Defence Minister A K Antony has stated. Last week, the firm nominated former Supreme Court judge Justice B N Srikrishna for arbitration in the case. “Our stand is clear that there is no issue of arbitration. We have already given them a show-cause notice and they have not replied so far. Let them reply. We will take a decision after they reply,” Antony has said.

Ministry officials, however, pointed out the arbitration proceedings were not applicable on the breach of pre-contract integrity pact of the ministry, which prevents a company from offering bribe or undertaking any other illegal activities to grab any defence contract worth more than Rs 100 crore.