Treading cautiously, the NDA Government has deferred a decision on the procurement of 16 multi-role helicopters for the Navy as one of the companies vying for the contract has Finmeccannica as its partner. Finmeccannica, the Italian conglomerate, is the parent company of UK-based AgustaWestland alleged, which is facing bribery charges in the VVIP helicopter deal for the IAF. The UPA Government had cancelled the deal with Agusta earlier this year.
The Defence Acquisition Council (DAC), headed by Defence Minister Arun Jaitley, preferred to put off the decision on the procurement of helicopters for the Navy from vendors including Sikorsky Corporation of US and European NH Industries which has Finmeccannica as one of its partners.
The proposed deal came for discussion during the July 19 meeting of DAC, apex body deciding on procurements, and the DAC members including the three Services Chiefs, and Defence Secretary besides the minister had to decide on some deviations and changes sought by the two vendors in the offset proposals and future course of the deal, sources said here on Sunday.
The new political dispensation opted to wait and watch before taking a call on the deal as some top executives of Finmeccannica besides Agusta are facing investigations in Italy for the last two years regarding pay off in some defence deals including VVIP helicopter deal, officials said. The ministry will make up its mind only after the outcome of the investigations in Italy and CBI at home, they added.
Agusta allegedly paid Rs 360 crore as bribe for bagging the Rs 3,600 crore contract for 12 VVIP helicopter for the IAF. The contract was inked in 2010 and Agusta had delivered three helicopters to the IAF when the scandal surfaced in Italy last year.
After handing over the case to CBI in March last year, the UPA Government finally cancelled the deal in January this year. Moreover, the defence ministry also began the process of encashing bank guarantees worth over Rs 2,200 crore furnished by Agusta in banks in India and Italy. The multi-role helicopter deal for the Navy is hanging fire for several years now and saw a series of anonymous complaints regarding discrepancies in selection process of vendors leading to a delay in the procurement. The Navy has not inducted a single multi-role helicopter for over a decade now and is presently flying the SeaKing helicopters procured from the UK in the 1980s.
Meanwhile, the first DAC meeting of the new Government since it assumed office in May cleared proposals worth over Rs 21,000 crore and also approved the revised schedule of delivery French designed Scorpene submarines now under construction at the Mazagon Dockyards limited, Mumbai.
The submarines were slated to be delivered in 2012 but now the first vessel is expected to be delivered in September, 2016 as per the new schedule approved by the DAC, the sources said.
The DAC also cleared a proposal to procure training simulators of the P-8I anti-submarine warfare aircraft for the Indian Navy, they said. The simulators worth Rs 1,226 crore would help the Navy in training its officers and men for operating the aircraft in the country itself as training them in US was proving to be expensive, sources said.
India had signed a deal worth around Rs 12,000 crore for procuring eight P-8I anti-submarine warfare and surveillance aircraft from the US and is planning to buy four more under the repeat order clause.
Other deals getting the nod by the DAC include the Rs 9,000 crore tender for the construction of five Fleet Support Ships for the Navy. Public and private sector shipbuilding firms will vie for this contract and all the ships will be manufactured in India. These ships will provide logistical support the operations of the aircraft carrier fleet of the force.
The DAC also approved a Rs 7,000 crore proposal for procuring 32 Dhruv advanced light helicopters from Hindustan Aeronautics limited (HAl) for Coast Guard and Navy.