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Helicopter deal payments to be suspended pending CBI inquiry

BJP describes the deal as another Bofors scam
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First Published: Wed, Feb 13 2013. 07 37 PM IST
A file photo of Finnmeccanica CEO Giuseppe Orsi. The Italian police arrested Orsi on Tuesday for corruption and embezzlement in relation to alleged bribes given to the Indian government. Photo: AFP
A file photo of Finnmeccanica CEO Giuseppe Orsi. The Italian police arrested Orsi on Tuesday for corruption and embezzlement in relation to alleged bribes given to the Indian government. Photo: AFP
Updated: Wed, Feb 13 2013. 10 42 PM IST
New Delhi: India will suspend further payments for 12 helicopters it’s buying from the AgustaWestland unit of Italian company Finmeccanica pending the findings of a Central Bureau of Investigation (CBI), defence ministry officials said on Wednesday.
While senior union ministers sought to deflect accusations of corruption in the Rs.3,600 crore deal, the opposition served notice that it plans to put the Congress-led United Progressive Alliance (UPA) government under pressure in the upcoming budget session of parliament over the issue.
The government has already made about 35% of the payments for the helicopters.
Former Indian Air Force chief S.P. Tyagi denied accusations of involvement in the deal and said he wasn’t occupying the post when the deal was being negotiated. He said the decisions related to the deal were taken by the UPA and the Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA), which was in power 1998-2004.
The deal was conceived during the NDA administration and completed in 2010. Tyagi was air force chief between 2004 and 2007.
The BJP, while refusing to be drawn into a debate over Tyagi’s remarks, described the deal as another Bofors scam, referring to an earlier defence scandal that dogged the Rajiv Gandhi government and contributed to an electoral defeat in 1989.
“The BJP will raise the issue seriously in the budget session of Parliament and seek a reply from the government to identify who the bribe-takers are and who are protecting them,” Arun Jaitley, the leader of the opposition in the Rajya Sabha, told reporters.
His deputy in the Rajya Sabha, Ravi Shankar Prasad, said: “I see the making of a second Bofors in this scam... Scam, scandal and corruption have become the defining feature of this government, which keeps on appearing with alarming regularity, causing great loss to government revenue.”
“This is the most corrupt union government since independence. The BJP is determined to raise this issue inside and outside Parliament and seek accountability from Prime Minister Manmohan Singh, Congress president Sonia Gandhi and defence minister A.K. Antony. The BJP demands that the entire helicopter deal must be put on hold and reviewed,” he added.
The UPA government has had to battle a series of corruption allegations such as that related to the allocation of second-generation spectrum, preparations for the Commonwealth Games in 2010, the award of coal fields apart from the Adarsh housing scam.
The helicopter deal came under a cloud after Italy arrested the head of defence company Finmeccanica on Tuesday for allegedly paying kickbacks to Indian officials.
India had signed the deal with AgustaWestland in 2010 for the supply of the helicopters. The company has so far supplied three and the next batch of three-four helicopters is due in June.
There are allegations that tender conditions were tweaked to favour AgustaWestland and kickbacks were allegedly paid to Tyagi and his cousins. Finmeccanica issued a statement on Tuesday stating it was cooperating with investigators and that it has faith in the judiciary.
The Left parties demanded that the deal be scrapped.
“This contract should be cancelled. A.K. Antony has said that they will be blacklisted but that is for the future. For now the contract should be cancelled,” said Prakash Karat, general secretary of the Communist Party of India (Marxist).
The BJP didn’t say whether it would bring Parliament to a halt over the issue as had happened with previous protests against government corruption.
“This is a decision that has to be collectively taken by the National Democratic Alliance (NDA). But we are not pleased with the reply of Antony and he has to explain this in parliament,” a BJP leader said on condition of anonymity.
Earlier in the day, Antony said guilty will not be spared, “whatever may be the consequences.”
“The CBI has been asked to give an early report... Strongest action will be taken against those found guilty,” he said, adding that the deal will only be cancelled after the report from the investigating agency.
The minister said he wasn’t aware of any allegations against Tyagi.
Tyagi said he did meet one of the alleged middlemen in the deal at his cousin’s residence.
“There should be an inquiry so that all the facts come out. I am not only ready for an inquiry but I want an inquiry,” Tyagi said. “But when you say you have contact with him, the answer is no. What connection could I have with him? The entire process of evaluation, trials, contracts, etc., took place in 2010.”
The CBI, which received a formal complaint on Wednesday, is yet to begin its probe. The Enforcement Directorate is also likely to start a separate investigation related to money laundering and violation of foreign exchange rules.
PTI contributed to the story.
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First Published: Wed, Feb 13 2013. 07 37 PM IST