Exclusive! Defence sources slam auditor's report on AW101 deal

21 August 2013 - 10:14

by Neelam Mathews in New Delhi

Indian Ministry of Defence (MoD) sources have criticised the findings of the Comptroller and Auditor General (CAG), claiming the auditor’s report into the controversial AW101 VVIP helicopter deal failed to comprehend basic facts.

The CAG presented its report to the Indian Parliament on August 13, highlighting the government’s failure to follow procedures in awarding the contract to AgustaWestland for 12 AW101s in 2010.

The deal is also under scrutiny in Italian courts due to alleged bribes paid to officials in India.

The bid for VVIP helicopters was first released in 2002 for the Indian Air Force (IAF) to replace its aging Mi-8 helicopters. After the EC225 emerged as the only candidate, the contract was rebid in 2006.

The CAG report claimed the subsequent process saw laxity in decision making and a number of discrepancies.

‘From the framing of the Services Qualitative Requirements (SQR) to the conclusion, the contract deviated from laid down procedures… Even with the revision of the SQRs, the acquisition process again led to a resultant single vendor situation,’ the report said.

The CAG pointed out that IAF had emphasised an altitude requirement for 6,000m as ‘an inescapable operational necessity’ that the MoD, in consultation with the prime minister’s office, lowered to 4,500m in the repeat bid despite the ‘inescapable operational requirement of 6000m for transportation to many areas in North and North East’.

However, MoD sources criticised the CAG for not having fully comprehended some facts.

‘There is a shocking level of simple inaccuracy in the report. CAG’s evidence is full of errors,’ one official in the MoD told Shephard.

For instance, CAG said the field evaluation trials (FET) were conducted abroad using representative helicopters, Merlin MK-3A and Civ-01, and not on the actual helicopter (AW101).

‘Anyone with a passing interest in aviation knows that Merlin is the 101 as operated by the RAF and Royal Navy. This is beyond farce,’ the source said.

The official added that since the FETs of both the final contenders, AgustaWestland and Sikorsky, took place abroad, it was on fair grounds.

Further, the suggestion in CAG report that the 1.8 m cabin height requirement produced a single vendor situation was ‘ludicrous’, said the official, given that all three aircraft had cabin height of 1.8m or more. The SQRs were based on the existing Mi-8, which has a 1.8m height.

The third candidate for the contract, the Mi-172, was rejected as Rosoboronexport refused to pay earnest money and sign the Integrity Pact, under which the bidder commits himself to take all measures necessary to prevent corrupt practices, unfair means and illegal activities during any stage of the bid.

With an advance of around 40% already paid and three AW101s delivered, it is almost certain the remaining nine helicopters will not be accepted for now.

As India’s elections are scheduled to take place in a few months, the government seems to be in no mood to further tarnish its image given a recent history of corruption allegations and scams.