Agusta deal: India working to claim Rs 5,470 cr

Having scrapped the deal for 12 VVIP choppers with AgustaWestland, India is working on procedures to claim more than 650 million euros (about Rs 5,470 crore) from the company in the form of seizure of bank guarantees and imposing penalties.
India scrapped the deal worth over Rs 3,600 crore with the Anglo-Italian firm on January 1 after finding that there was breach of pre-contract integrity pact by company for supplying the choppers to the Air Force.
As a follow up, the Defence Ministry is working on procedures to encash the bank guarantees of over Rs 2,200 crore furnished by the company and seeking damages, sources said, adding the total amount would be to the tune of over 650 million euros.

The company had deposited guarantees in a bank in Italy and the State Bank of India branch in New Delhi, sources said.
The Defence Ministry has already asserted that India will not lose any money in the Rs 3,600 crore deal in which payment of 30 per cent has already been made.
The deal was for supply of 12 AW-101 helicopters out of which three had already been delivered before the contract was frozen after allegations of kickbacks surfaced in February last year.

India terminated with immediate effect the agreement, which was signed on February 8, 2010, on grounds of breach of "the Pre-contract Integrity Pact (PCIP) and the agreement" by the firm, the ministry had said.

Controversy over the 2010 deal for the supply of 12 helicopters for Indian VVIPs erupted in February last year with the arrest of two top officials of the firm in Italy, triggering a political storm here. Former IAF chief S P Tyagi is one of the accused in the case being probed by the CBI.
AgustaWestland has invoked arbitration proceedings and India has appointed Justice (retd) Jeevan Reddy on its behalf for arbitration as it does not want to go unrepresented.
The Anglo-Italian firm has contested the Defence Ministry decision saying it was not taken on any "firm basis".