Security News (Aug 14) : Agusta Westland chopper deal: CAG report says govt may have overpaid Source: The Economic Times, ET Bureau | 14th August 2013 economictimes.indiatimes/news/politics-and-nation/agusta-westland-chopper-deal-cag-report-says-govt-may-have-overpaid/articleshow/21799689.cms The Comptroller and Auditor General has alleged there were frequent deviations from procedures and unrealistic and unreasonably high cost estimates in the 2010 acquisition of 12 Agusta Westland VVIP helicopters. The findings will add to the woes of the government that has been beset by allegations of corruption in another stormy Parliament session. The deal is subject of criminal investigations in India and in Italy, where prosecutors found evidence of corruption by middlemen through wiretaps. The scandal that broke early this year resulted in the arrest of the CEO of Agusta Westland and the chairman of its parent Finmeccanica. India is investigating the role of former air chief marshal SP Tyagi and has frozen payments to the Italian firm. "The benchmark cost adopted by CNC (contract negotiation committee) was unreasonably high compared to the offered cost. Hence it provided no realistic basis for obtaining an assurance about the reasonableness of cost of procurement of AW-101 helicopters," the report, signed by just-retired CAG Vinod Rai, said. Incidentally, serving CAG Shashi Kant Sharma served in the Defence Ministry in key roles for most of the period under review. There is no adverse mention about his role in the report, however. The first request for proposal (RFP) issued in 2002 for the acquisition of choppers for transporting VVIPs was cancelled on the advise of the PMO to avoid a single-vendor situation. The revised RFP issued in 2006, however, was made more restrictive rather than broadbased, limiting the available range in the competition, the study found. The new RFP reduced the mandatory altitude requirement from the earlier 6,000 metres to 4,500 metres. "While mandatory requirement of minimum cabin height of 1.8 metre reduced the competition, the lowering of altitude requirement was against the inescapable operational requirement of 6,000 metre..." the audit says. The field evaluation trials for the Agusta chopper was done on representative models as the AW-101 model was still in the development phase.
Posted on: Wed, 14 Aug 2013 06:42:10 +0000
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