Can AgustaWestland save chopper deal with India? All you need to know

Facing the threat of cancellation of its Rs 3,600 crore deal for supplying VVIP choppers to the Air Force, AgustaWestland officials will present their case before the Defence Ministry in New Delhi today.

The Anglo-Italian firm will present its case before officials of the rank of Additional Secretary and Joint Secretary of the Defence Ministry, who have been dealing with the case after the scandal broke out, Defence Ministry officials said in New Delhi.

India has decided to cancel a scandal-tainted helicopter deal with Anglo-Italian firm AgustaWestland, prejudging the outcome of a meeting on Wednesday between company executives and Defence Ministry officials to discuss the contract, three sources said.

The decision draws a line under a dispute that has embarrassed a government heading into elections under a cloud of corruption scandals, and could re-open the contract to rivals, including United Technologies Corp’s Sikorsky Aircraft, EADS’ Eurocopter and Lockheed Martin.

Here are key facts about the scam that rocked the country last year.

* The scandal relates to allegations of corruption in supply of 12 VVIP helicopters to India.

* In February, India froze payments on the 560-million-euro contract to supply these helicopters after the deal became mired in allegations of bribery and the then-

[caption id=“attachment_1189899” align=“alignleft” width=“380”] Representational Image.[/caption]

CEO of Finmeccanica was arrested by Italian police for allegedly paying bribes to secure the deal. AugustaWestland is a unit of Finmeccanica.

* Italy and India are separately investigating allegations that AgustaWestland paid bribes to win the 2010 deal for the helicopters to be used by senior politicians. AgustaWestland has denied all these allegations.

* In October, AgustaWestland had invoked arbitration over the deal saying suspension of payment was not provided for under the terms of the contract and that authorities had not responded to its requests for bilateral discussions since April.

* India had taken delivery of three helicopters before the deal was stalled. Three more were been ready for delivery to India since April. As of October, three were close to completion and work had begun on the final three at the company’s plant in Somerset in Britain.

* In August, the Comptroller and Auditor General (CAG) said in a report that the defence ministry had initially set a condition that the helicopters be able to fly to an altitude of 6,000 metres (1,970 feet), which meant AgustaWestland could not compete since the AW101 was certified to fly only to 4,572 metres.

* Later, the ministry lowered the minimum altitude requirement to 4,500 metres, even though the helicopters were expected to be used in northern and northeastern parts, where terrain is mountainous and altitudes are high, the auditor said.

* CBI, which is finalising its chargesheet in the case, is probing former Air Chief Marshal SP Tyagi’s role in the deal. Giuseppe Orsi, former chief executive of Augusta Westland, and Bruno Spagnolini, current chief executive, are facing trial in Italy.

* CBI has alleged that the kickbacks were transferred through a many confusing transactions between Indian and Tunisian software companies done like technical contracts. Tyagi is alleged to have approved the reduction in the service ceiling for the VVIP helicopters.

With inputs from Reuters