AgustaWestland chopper deal comes under attack from CAG

The controversial Rs 3,727 crore AgustaWestland deal today came under attack from the CAG which has found "several deviations" from procedures and changes in requirements in the purchase of 12 VVIP choppers at nearly five times the original sanction for the project.
The then Air Force Chief F H Major, whose name was not taken by the Comptroller and Auditor General, came in for criticism for conduct of trials outside India despite objections from Defence Minister A K Antony in 2008.
After the arrest of former CEOs of Anglo-Italian firm in Italy, the deal came under intense scrutiny with allegations of kickbacks to the tune of Rs 362 crore. Former IAF Chief S P Tyagi and his cousins have been named in a CBI investigation but they have denied any wrongdoing.

The major point made in the CAG report, which was tabled in Parliament today, was that the acquisition process for the VVIP helicopters had to resort to "several deviations" from the laid down procedures.
The CAG report notes that the original estimated cost of the project approved by the Defence Ministry was Rs 793 crore in January 2006.
"The benchmarked price worked out by the Contract Negotiations Committee (CNC) was Rs 4,877 crore as against the estimated total project cost of Rs 793 crore by the Ministry in 2006.

" Further, the offered cost by the vendor was Rs 3,966 crore. This was much below the bench-marked cost. The benchmarked cost was 22 per cent higher than the offered costs," it said.

The CAG found that EH-101 helicopter (later renamed as AW-101 of AgustaWestland) could not be field evaluated in 2002 because it could not fly up to the height of 6,000 metres, which was a requirement in the initial tender issued in 2002.
After the procurement process was closed in 2003, the Staff Qualitative Requirements (SQRs) were reframed in 2006 to broadbase competition and to avoid a single-vendor situation.