The Indian defence establishment receives yet another blow with the helicopter scam 

By Syed Nazakat
The arrest of Italian firm Finmeccanica’s CEO, Giuseppe Orsi, in Milan on February 12, is having its butterfly effect in India. Revelations that Indian officials, including former Air Force chief S.P. Tyagi, were paid kickbacks to swing a VVIP chopper deal in favour of the company’s subsidiary AgustaWestland have jolted the defence establishment. 

Orsi and aides were under investigation for more than a year regarding the Rs 3,700-crore deal for 12 helicopters, signed in 2010. Italian sleuths say Orsi had hired an arms dealer named Guido Ralph Haschke, who allegedly approached Tyagi’s relatives. 
Reports suggest Tyagi and other Indian officials were paid Rs 370 crore for the ‘swing’. But the former Air chief trashes the allegation: “I retired from the service in 2007 and the deal was signed in 2010. I am shocked that my name is being dragged into this.”
THE WEEK, in a cover story on Delhi-based arms dealer Abhishek Verma (The man who sold a world, July 15, 2012), had reported about AgustaWestland’s wheeler-dealing in India. Verma, who is now in jail, was apparently a vital cog in the scam.

Investigations in Italy reveal that the altitude capability cut-off for the bidding helicopters was reduced from 5,5000m to 4,5000m, so as to make AgustaWestland eligible. Bribe was allegedly paid to tweak other test flight clauses, too.

It all started in August 1999. The Air Force, responsible for carrying out VVIP sorties, sought the replacement of Mi-8 helicopters because of operational constraints. In March 2002, global tenders were invited and three firms, including AgustaWestland, were shortlisted. But only French firm Eurocopter’s EC-225 was found suitable. 

In a meeting with the Air Force, on November 19, 2003, Brajesh Mishra, principal secretary to Prime Minister Atal Bihari Vajpayee, observed that the framing of certain mandatory requirements had led to a single-vendor situation. It was also noted that the President and Prime Minister rarely made visits to places involving chopper sorties at an altitude above 4,500m. 

Subsequently, the requisite altitude was decreased from 5,500m to 4,500m. AgustaWestland reentered the fray. In April 2008, the field evaluation trial team, including Special Protection Group officers, recommended the induction of Agusta’s AW-101. 
A livid Defence Minister A.K. Antony has now transferred the case to the CBI. “Whosoever is found guilty, Indian or foreigner, we will take the strongest action against them,” he says. “Nobody will be spared.” 
What about the payments made to Agusta? “If the Indian government paid any amount of the money, as per the provisions of the integrity pact, we can get back the entire money…,” says Antony.
The damage is not just financial. The defence ministry has been in the process of procuring 197 high-altitude surveillance helicopters worth $600 million for the Air Force and the Army. It is likely to be put on hold. 

Incidentally, a ‘memorandum’ seized by Italian sleuths from middleman Haschke’s house reveals that a brigadier, who was in charge of the flight trials of a contract for 197 light choppers, sought kickbacks in January 2010, days before the trials began. AgustaWestland did not bag the deal, but the stench points at deep rot.

In the end, it is India’s military modernisation drive that has been getting hit over and over again. As it is, the search for new artillery guns for the Army has been on for two decades.

(THE WEEK, 14 Feb, 2013)



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