Deal took off after ex-Italian Presidentís visit


As per the defence ministry's official statement, the formal process of firming up the technical specifications for the contract started barely a month after this meeting in March 2005. The statement said that the operational requirements for the contract "were deliberated at length between IAF, NSA, SPG/ PMO and MoD between March, 2005 to September, 2006".

This clearly reveals that till March 2005, the technical requirements for the contract had not been revised to lower the service ceiling requirements and the move to revise these only took place after Tyagi's meeting with Finmeccanica officials. In its defence, the government has said that a policy decision to change the requirements had been taken in 2003, when the NDA was in power. But the fact remains that on record, the requirements were changed only after March 2005.

In fact, the middleman used the fixing of the February 2005 meeting between Finmeccanica officials and Tyagi as a proof of his high contacts in India, and later got in touch with Finmeccanica CEO Giuseppe Orsi and worked out a commission deal with him for a value of Euro 20 million.

Two other key factors that are mentioned in the Italian report have also been corroborated with the sequence of events that took place in India while the deal was being firmed up.

* Price escalation at last minute generated extra kickbacks: The Italian investigation points to a sudden increase in the price of the VVIP chopper deal while it was in the last stages of being finalised. This increase, it was alleged, was used to generate extra kickbacks from the contract.

In its explanation note, the defence ministry has admitted that an escalation of price took place at the last minute after the Air HQ and SPG recommended the inclusion of extra systems to the VVIP choppers that were not part of the original tender.

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