A warning signal

The UPA government has done well to scrap the controversial Rs 3,700 crore deal with the Anglo-Italian company Agusta Westland for the supply of 12 VVIP helicopters to the defence ministry. The cancellation of the deal has been under consideration ever since credible reports of kickbacks amounting to Rs 360 crore to Indian Air Force officers and others had appeared in the public realm.

The senior most officer of the force, the then chief SP Tyagi himself, and his relatives were alleged to have been involved, as it was during Tyagi’s tenure that changes were made in the operational requirements of the helicopters to award the deal to Augusta Westland. The government had frozen the deal earlier this year pending investigations into the reports of irregularities in decision-making and payment of bribes as quid pro quo.

The deal has been cancelled on the ground of breach of a pre-contract integrity pact which had mandated regular and corruption-free procedures for execution of the order. Though the government had disfavoured the arbitration process earlier, it has now agreed to it to settle the issues. But this does not mean the criminal proceedings initiated after the CBI started investigating the deal will be dropped. Preliminary inquiries have brought out the role of officials and  middle men and even the money trails of the kickbacks paid to secure the deal are now known. The investigations should continue and those who were responsible for the irregularities should be held accountable and brought to book. Out of the 12 helicopters which were ordered three have been supplied  and a good part of the contracted amount has been paid to the company. The company will have to be forced to return the money as it is in breach of the contract.

The cancellation of the deal should send a strong message to suppliers of arms and armaments, middlemen and officials that corruption would not be tolerated and those who are involved in irregularities will have to pay a price. Defence deals have been notorious for corruption. It might be cynical to observe that the government has taken strong and decisive action because only officials were apparently involved in the irregularities. Not many major arms deals have been cancelled in the past on the grounds on which the Augusta deal was scrapped. It might serve as a warning.