Govt moves to cancel chopper deal, issues showcause to AgustaWestland

VVIP chopper deal
Even as India made a fresh request to Italy for information on alleged kickbacks in the supply of 12 Agusta Westland's VVIP helicopters, the Ministry of Defence has issued a showcause notice to the Italian company to reply within seven days and has initiated the process to scrap deal.

According to sources, "A new request has been sent out to Rome seeking more details about the VVIP helicopters."

Also, the MoD has issued a formal showcause notice to the company seeking cancellation of contract and taking other actions as per the terms of the contract and the Integrity Pact.

The ministry had already put on hold further payments to the company on Wednesday. "With today's showcause notice, the operation of the contract has been put on hold. The company has been asked to reply to the notice in seven days," ministry said in a statement.

On Thursday India had warned Italian firm Finmeccanica of legal action, including blacklisting, over corruption allegations in the VVIP chopper deal and asked them whether any slush money had been paid to fix the deal that has led to a political uproar.

The MoD issued a detailed statement on the sequence of the $750 million deal for 12 VVIP AgustaWestland helicopters by the Italian firm's subsidiary, two days after a Central Bureau of Investigation (CBI) probe was ordered into the bribery charges.

The statement noted that the mandatory technical requirements of the helicopter were changed in the tender during the Vajpayee government in 2003, with the then national security adviser Brajesh Mishra playing a key role.

The MoD has asked the chief of AgustaWestland to "categorically state the clear position in view of the current developments indicating specifically if any financial transaction has taken place with any Indian individual/entity which would be violative of the integrity pact or any other terms and conditions of the contract".

It also cited clauses of the Integrity Pact that was signed, noting the contract bars paying of bribes or involvement of middlemen. The clause warned of "strict action including cancellation of contract, recovery of payment, blacklisting and penal action" against the vendors.

The defence ministry warned that the government is "determined to take all possible legal and administrative action against the guilty parties and accordingly has ordered a thorough probe by CBI".

The statement also said that the first request for the proposal was issued in March 2002 mandating 6,000 metres as the flying altitude for selection of the chopper.

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