In a step towards cancelling the Rs 3,600 crore VVIP helicopter contract following allegations of kickbacks, the Government has issued a final show-cause notice to AgustaWestland to explain violation of the terms of the contract and given 21 days to reply.
The Defence Ministry on October 21 issued the notice asking the Anglo-Italian firm to explain why “all or any action as prescribed, including cancellation of the contract, should not be taken against them for violating the terms of the pre-integrity pact and the contract for procurement of 12 VVIP helicopters.”
The integrity pact bars the vendor from hiring a middleman or paying commissions and bribes to secure a contract. The Attorney General some days back gave his opinion that the integrity pact was violated and the defence ministry then issued the final show cause notice to AgustaWestland, officials said here on Wednesday.
They also said the arbitration process invoked by AugustaWestland a fortnight back against the defence ministry for “unilaterally” freezing the deal was not applicable on the breach of pre-contract integrity pact. The company, so far, has denied any wrong doing and maintains that it went according to the terms and conditions of the contract and Defence Procurement Procedure of the Indian government.
The government had put on hold the contract for supply of nine AW-101 VVIP helicopters in March this year after allegations of kickbacks worth over Rs 360 crore surfaced during investigations by the Italian authorities. The defence ministry had frozen the contract after two top officials of the company were accused in the bribe scandal and handed over the case to the CBI here.
AgustaWestland had signed a contract with India in 2010 for supplying 12 helicopters to the IAF and delivered three helicopters early this year. Delivery of the remaining nine helicopters was put on hold after the scam broke out.
The Defence Ministry had first issued a show-cause notice to AgustaWestland on February 15 asking it to explain within seven days the bribery allegations against it after the alleged scam was exposed in Italy. In the notice, the company was asked why deal should not be scrapped. AgustaWestland had denied the allegations.
Soon after the arrest of the firm’s former CEO, Guiseppe Orsi, in Italy in connection with the case, Defence Minister A K Antony had suspended the payments to be made to it along with the delivery it was due to make to IAF for the remaining nine helicopters.
The Swiss authorities following the request of Italian authorities also arrested alleged middleman Guido Haschke last week in connection with the helicopter deal. He is likely to be extradited to Italy soon. Haschke is one of the 13 accused including former IAF chief S P Tyagi in the FIR filed by CBI. Tyagi, however, has denied allegations of kickbacks.