By Ajai Shukla
Business Standard, 30th April 16
The ministry of defence (MoD) has fired the latest shot in an escalating war of words between the Congress and the Bharatiya Janata Party (BJP) over corruption in the purchase of twelve AW-101 helicopters in February 2010 for top Indian political leaders, from Anglo-Italian firm, AgustaWestland International Limited (AWIL) for Euro 556 million (currently Rs 4,195 crore).
Although the purchase of these VVIP helicopters was initiated in 1999 by the previous BJP-led government, and concluded in 2010 by the previous Congress-led government, both parties are selectively highlighting the role of the other, while downplaying their own role.
On Thursday, the MoD stated: “The contract for supply of 12 helicopters signed with AWIL on 8th February 2010 was terminated with effect from 1st January 2014 (i.e. by the Congress-led government)… However, the company was not debarred by the said order. Various bonds and bank guarantees were invoked.”
The MoD further claims “It is the present Government which through its order dated 03 July 2014, put on hold all procurement/acquisition cases in the pipeline of six companies figuring in the FIR registered by the CBI, namely: M/s Agusta Westland International Ltd., UK, M/s Finmeccanica, Italy and its group of companies… No new capital procurement has been made thereafter from these companies in the tenure of the present Government.”
In fact, the current National Democratic Alliance (NDA) government has consistently tried to ease the de-facto ban on Finmeccanica companies imposed by United Progressive Alliance (UPA) defence minister, AK Antony, after Italian investigators arrested Finmeccanica chief, Giuseppe Orsi, on February 12, 2013 on charges of bribing Indian officials to seal the VVIP chopper contract.
On December 12, 2014, at a conclave in New Delhi organized by the Aaj Tak TV channel, Parrikar decried the notion of blacklisting foreign violators, instead recommending punitive monetary penalties.
Citing Finmeccanica, Parrikar pointed out that many of its 39 group companies were involved in crucial contracts with India. “Should we rule ourselves out of dealing with all of those 39 subsidiaries? There has to be a clear policy on that,” said the defence minister.
Parrikar’s predecessor as defence minister, Arun Jaitley, followed an identical approach to blacklisting. As Business Standard reported (“Ministry of Defence reconsidering blacklisting policy”, August 23, 2014), Jaitley said on blacklisting: “We have to balance between two competing public interests. One public interest is that contracts are meant to be abided with, and not violated, even by our suppliers. The other competing interest is the larger public interest in terms of our national security and defence preparedness. It is an issue that we are fully seized of and we are in the process of finding an answer to this and you will hear about this from us very soon”, said Jaitley.
The blacklisting norms that the government eventually promulgated in August 2015 did not blacklist Finmeccanica, instead taking a differentiated approach to its group companies --- which include marine specialist, WASS; Selex Electronics Systems; aircraft firm, Alenia Aeromacchi, and naval gun maker, Otomelara.
Also contested is the naming by an Italian court of former Indian Air Force (IAF) boss, Air Chief Marshal SP Tyagi, as the recipient of bribes to change the specifications of the VVIP helicopter. The initial IAF tender, floated in 2002, required the chopper to operate up to altitudes of 6,000 metres, which was higher than the service ceiling of the AgustaWestland helicopter. The Italian court alleges that Tyagi did AgustaWestland a favour by having the service ceiling lowered, making the AW-101 helicopter eligible for the IAF tender.
In fact, according to a detailed MoD release dated February 14, 2013, the decision to lower the service ceiling was taken on the orders of Brajesh Mishra, Principle Secretary to then prime minister, Atal Behari Vajpayee, at a meeting in November 2003. Mishra also directed that the prime minister’s office and the Special Protection Group (which is responsible for VVIP security) be brought into the decision making process.
Tyagi became a part of the decision making more than a year later, when he took over as IAF chief in December 2004.