VVIP chopper deal: Behind the Rs 300 crore extra spend

Changes in seating configuration and addition of medical evacuation system in the VVIP choppers in 2009 resulted in additional burden of around Rs 300 crore to Indian exchequer in the controversial Rs-3,600 crore deal under scanner for alleged kickbacks.

The documents related to the procurement of the AW-101 helicopters have revealed that the increase in number of seats for VVIPs from two to four and inclusion of the medical evacuation system for the choppers increased the cost of the project by around Rs 300 crore more, IAF sources said in New Delhi.

They said the proposal in this regard was mooted in 2009 at the time when AgustaWestland’s AW-101 had already been selected for the Indian requirement for 12 choppers for ferrying VVIPs, they said.

During the contract negotiation phase of the deal between September 2008 and 21 January, 2009, the IAF headquarters had also recommended inclusion of Traffic Collusion Avoidance System (TCAS-II) and Enhanced Ground Proximity Warning System (EGPWS) for all 12 helicopters and the Special Protection Group (SPG) and the Prime Minister’s Office (PMO) had recommended the medical evacuation systems in the choppers.

Meanwhile, it has also emerged that Chandigarh-based DS Infotech was one of the firms listed as offsets partners in the deal but later on it withdrew from it, the sources said.

According to the Indian offsets clause under Defence Procurement procedure 2005, foreign vendors bagging deals worth Rs 300 crore have to invest back at least 30 per cent worth of the contract back into the Indian defence sector.

The firm was allegedly used by the middlemen in Europe to transfer kickbacks to the tune of Rs 362 crore to their Indian contacts. The deal has been under the scanner of the CBI soon after the arrest of former Finmeccanica chairman Giuseppe Orsi and AgustaWestland CEO Bruno Spagnolini.

It has been put on hold and all payments to the Anglo-Italian firm have been stopped. The Ministry has also rejected the reply to the show cause notice, issued by it as part of the cancellation process of the contract, in which the company claimed that it was not involved in any wrongdoing.