Chopper scam forces India to alter arms purchase policy

In the wake of chopper scam, the government on Monday announced that it would change its defence procurement policy, which will be unveiled in a few months.

"Within a few months we are going to change the defence procurement procedure again," Defence Minister A K Antony told the Lok Sabha during Question Hour.

The defence procurement policy was revised as recently as 2011.

The minister was replying to questions on the allegations of kickbacks to the tune of Rs 362 crore in the Rs 3,600 crore deal to procure 12 VVIP choppers from AgustaWestland.

His statement assumes significance as the government has come under sharp attack over the chopper scam, with allegations that former Air Chief S P Tyagi was a beneficiary in the kickbacks.

Antony said the government has to import defence equipment because the Services require the most modern equipment to meet their operational necessity.

"Because of the operational necessity of the Services, on the request that they need the most modern equipment to meet the operational necessity, government moves to import any high value equipment from foreign sources," Antony said.

Dubbing indigenisation as the "ultimate solution to the scourge of corruption", Antony said the government would give "more priority to indigenisation so that Indian public sector and private sector can play a major role in producing state-of-the-art equipment for the Indian forces."

Referring to the CBI investigation in the VVIP chopper deal, Antony said it would be early to opine on the extent to which this case was likely to affect other defence deals in the pipeline.  

Antony said India had also taken up with Britain the issue of alleged involvement of a British consultant in the deal and the fact that the contract had been signed with M/s AgustaWestland, UK.

"The UK side informed the external affairs ministry that they had not launched any investigation and were awaiting the results of the Italian investigation in order to ascertain whether any further action needs to be taken," he said.

The minister said AgustaWestland, UK has repeatedly denied any wrongdoing on their part in the contract for the purchase of 12 VVIP helicopters.

Antony said the procurement of the choppers was completed in accordance with the established procurement procedure in a transparent manner with all stages being followed meticulously.

"Three helicopters, delivered by the vendor, have so far been accepted after completion of Joint Receipt Inspection," he said.

Antony said the defence ministry had taken prompt action to seek factual information from authorities concerned after reports of alleged kickbacks in the deal appeared in a section of the media.

"However, since no concrete information to substantiate the allegations was forthcoming, no formal inquiry was then ordered," he said.

Antony said after the reports of the arrest of Finmeccanica chief Giuseppe Orsi, who was earlier the chief executive officer of AgustaWestland, appeared the defence ministry ordered a CBI inquiry into the matter.

"The CBI, after a visit of its team to Italy and on further examination of the documents available, has registered a Preliminary Enquiry on February 25, 2013 in this matter against 11 persons including five Indians and four firms which include two Indian firms," he said.