It has asked an equally vexed defence ministry to make up its mind on what it should do with three super-luxury AW101 VVIP helicopters that were meant to fly the President, Prime Minister and other dignitaries but have been dismantled and stowed in protective casing in a hangar at the Palam air base.
The helicopters are occupying valuable space in the airbase. The IAF decided to mothball them since former defence minister A.K. Antony decided on January 1 this year to terminate the Rs 3,600-crore contract with AgustaWestland for 12 of the helicopters.
The cancellation of the contract meant that there would be no supply of spares for the helicopters that were delivered and that the nine pending helicopters would not land in India at all. But now, the chief executive of Finmeccanica, that is the holding company of AgustaWestland, Mauro Moretti, has urged India to continue with the contract since its officials were acquitted of corruption charges in an Italian court.
India’s Central Bureau of Investigation and the Enforcement Directorate are continuing with separate probes into the contract that was signed in 2010.
In the meanwhile, the IAF’s headquarters’ communication squadron — as the VVIP squadron is officially known — is contending with Mi8 helicopters that are nearly at the end of their total technical life.
The VVIP helicopter deal had run into controversy since the UPA government gave the financial approval for the machines while overruling an IAF operational need for mid-air refuellers.
After the contract was executed and three of the 12 helicopters were delivered, Italian prosecutors opened an investigation into allegations that Finmeccanica officials had bribed Indian officials to swing the deal. Even the former IAF chief, Air Chief Marshal (now retired) S.P. Tyagi, was a suspect.
The A.K. Antony dispensation toyed with banning Finmeccanica from bidding in all Indian defence contracts. India encashed bank guarantees and recovered a substantial portion of the amount it had paid upfront.
AgustaWestland has in the interim sold two of the AW101 helicopters that were meant for the IAF to the Nigerian Air Force. The super-luxury aircraft claims to have the largest cabin space in its class of helicopters and are equipped with sophisticated self-protection suites. A website, thebillionaireshop.com, prices each aircraft at Euro 16,200,000 (above Rs 125 crore).
The Indian contract included the price for spares and training of the aircrew both in the UK, where the AgustaWestland plant is located, and in India.
The crew have now been sent back to their original units since the mothballing. An officer and seven junior commissioned officers have been entrusted with the task of maintaining the three helicopters that have been dismantled after spares ran out after close to 200 hours of training sorties.
Finmeccanica has deep and wide interests in Indian defence contracts. It is in fact so deeply entrenched in the Indian armed forces — supplying air-to-air missiles for the air force, guns and torpedoes for the navy’s ships and submarines — that despite Antony’s style of functioning, the defence establishment baulked at the idea of blacklisting its group companies.
Antony’s decision is now Manohar Parrikar’s burden. Should the IAF even be asked to sell the helicopters, it would be difficult to find a buyer within the country given the machines’ price tags.