New Delhi, Aug 13 (IANS) Slamming the defence ministry and the IAF for deviations from procedures in the Rs.3,726.96 crore AgustaWestland deal for VVIP choppers, India's official auditor said the entire procurement process raised "serious questions on accountability and lack of transparency".
The Comptroller and Auditor General (CAG) report, tabled in parliament Tuesday, noted that the ministry and the Indian Air Force (IAF) failed to devise realistic qualitative requirements, leading to a long delay in replacing ageing Mi-8 helicopters.
In its preface, the report says that the entire process of acquisition "poses serious questions on accountability and lack of transparency which need to be addressed".
The report is likely to provide further ammunition to the opposition to target the Congress-led United Progressive Alliance government which is already battling allegations concerning allocation of coal blocks and 2G spectrum.
The Bharatiya Janata Party said the CAG report was shocking.
"The report has put on record that the procedure was manipulated and manipulation did take place," BJP leader Rajiv Pratap Rudy told Times Now news channel.
The CAG report said the bench-marked cost of Rs.4,871.5 crore for the 12 VVIP choppers adopted by the contract negotiating committee was unreasonably high and provided no realistic basis for comparison with offer cost of Rs.3,966 crore by AgustaWestland.
"The acquisition process for the VVIP helicopters had to resort to several deviations from the laid down procedures," the report said.
"Several instances have been observed where the Ministry deviated from the 2006 Defence Procurement Procedure (DPP) in the request for proposal issued in September 2006," the report stated.
It said that as the acquisition process was "inordinately delayed", the IAF continued to face operational disadvantage due to ageing helicopters.
"A critical requirement of replacement of ageing fleet of Mi-8 could not be fulfilled even after 13 years of initiation of the acquisition process due of failure of MoD (ministry of defence)/IAF to devise realistic SQRs (services qualitative requirements)," the report said.
The CAG also questioned the decision of the then IAF chief S.P. Tyagi (October 2007) to hold the trials of the contenders for the deal abroad.
The Central Bureau of Investigation is probing alleged corruption in the helicopter deal. A case has also been registered against Tyagi concerning the deal.
The scam came to limelight after the Italian government arrested Italian weapons firm Finmeccanica's CEO Giuseppe Orsi in February for allegedly paying bribes to clinch the deal. AgustaWestland is a subsidiary of the company.
The CAG report said the field evaluation trial was conducted abroad on "the representative helicopters of AgustaWestland and not on the actual helicopter (AW-101) contracted". It also noted violations of defence procurement policy in respect of fulfilment of offset obligations.
It termed the procurement of four additional choppers at a cost of Rs.1,240 crore as "avoidable" as the assessed requirement was not commensurate with the low utilisation levels of existing helicopters providing transportation to VVIPs. The initial proposal was to procure eight helicopters.
The defence ministry had concluded a contract with AgustaWestland in February 2010 for supply of 12 AW-101 helicopters at price of Euros 556.262 million (Rs.3,726.96 crore) for the IAF's elite Communication Squadron, which ferries the president, prime minister and other VVIPs.
Three helicopters were received between November 2012 and February 2013. Giving chronology of the deal, the CAG said trials took 26 months against the prescribed time of 15-21 months while negotiations up to signing the contract took 49 months against the prescribed time of 23-24 months.
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