Britain awaits Italian investigation report; Singh, Cameron to meet on Tuesday

The British government had told India “in the recent past” that it would wait for the outcome of the Italian authorities’ probe against Finmeccamica before launching an investigation into its UK-based subsidiary AgustaWestland’s deal to supply 12 helicopters to the Indian Air Force.

AgustaWestland, which has over 3,000 employees in its chopper manufacturing plant in the UK, was selected for a £ 46 million stimulus from the British government’s Regional Growth Fund in October 2012, notwithstanding the investigation into its parent company Finmeccanica in Italy. It planned to use the stimulus, as well as an investment of
£ 100 million by itself, for diversification into the civilian helicopter business. 

India’s High Commissioner to the UK, Jamini Bhagwati, told journalists on Friday that New Delhi had in the recent past sent a communiqué to the Foreign and Commonwealth Office of the British government, enquiring if any probe was being initiated into the allegations that AgustaWestland had resorted to unfair practices to win the contract. Senior diplomats of the High Commission of India in London also had a meeting with the British government officials.

The UK had given an “interim response” to the queries and stated that it would wait for the outcome of the investigation in Italy, said Bhagwati.

Sources said the issue might be touched upon again when Prime Minister Manmohan Singh and his British counterpart David Cameron meet during a bilateral meeting in New Delhi next Tuesday.

Cameron is likely to arrive on Monday for a three-day visit to New Delhi and Mumbai.
The probe in Italy led to the arrest of Finmeccanica’s Chief Executive Officer Giuseppe Orsi in Milan. He was arrested in connection with a probe into the allegation that AgustaWestland – a subsidiary of Finmeccanica – had paid bribes in India to secure the contract for supplying the Indian Air Force 12 AW-101 helicopters, which were to be used to fly around VVIPs.

The controversy over the chopper deal and possibility of the Indian government cancelling the contract sparked fears of job loss in the UK, which is struggling to come out of a recession.

AgustaWestland has a helicopter manufacturing facility at Yeovil in the South Somerset district of England. The company claims on its website that it employs over 3,280 direct employees in the UK and indirectly supports around 10,000 jobs with more than 845 suppliers, including 650 small and medium enterprises and micro businesses, across the country.

Though AgustaWestland once relied upon contracts for the UK’s defence forces for its helicopter business, it shifted focus on manufacturing civilian choppers after military budget of the government was slashed in the wake of recession. Syed Akbaruddin, official spokesman of the Ministry of External Affairs, on Friday told journalists that New Delhi would expect that London’s interim reply to its query on AgustaWestland would be followed up with a “fuller response.”