NEW DELHI: Three helicopters that have spare parts to fly for just a few months, pilots who are not fully conversant with the new VVIP helicopters, almost 45% of the money already paid and a huge consortium that may have to be blacklisted out of India for a decade.
Friday's decision to cancel the controversial deal for the three-engine AW-101 helicopters from UK-based AgustaWestland, a subsidiary of scandal-hit Italian consortium Finmeccanica, was taken amid several uncertainties, admit senior sources involved in the process.
The first steps, once the contract is cancelled, would be to invoke the 5% earnest money deposit, which is part of the integrity pact, and the performance bond (guarantee). This would be followed by a formal request to AgustaWestland to repatriate the extra money paid to them, after deducting the price of three helicopters and related costs.
Foremost among the challenges cited by senior IAF officers is the maintenance and operability of the three helicopters already delivered. "The three helicopters have come with some initial spares so they can fly only for a limited period. Long-term maintenance would not be possible unless the situation is retrieved. For now, both MoD and IAF are slightly clueless about what should be the future course of action," an officer said.
Once the contract is cancelled, the process of blacklisting the firm would begin, and once it is blacklisted for 10 years, then the government cannot enter into any contract with it. This would have an adverse impact on spare parts, maintenance, upgrade and the like.
The blacklisting process itself is not clear for now. While Finmeccanica and its subsidiary AgustaWestland seem to be involved in this scandal, there are several questions about blacklisting, including if all the subsidiary companies of Finmeccanica will be blacklisted because of the consortium's behaviour.
In the past, when Indian has blacklisted a defence firm, it has had a deadly backlash. India abruptly cancelled the HDW submarine contract with the German firm in the 1980s. For spare parts, the Indian Navy kept paying exaggerated prices to third party contractors. Even a normal nut-bolt then worth about Rs 20 was procured at approximately Rs 25,000, later investigations showed.
The pilots of the newly-inducted helicopters are undergoing "conversion and consolidation training" to be eligible to fly VVIPs since a certain amount of proficiency is required on the new machines even if they are experienced in flying the Russian-origin Mi-17s and Mi-8s. So, these pilots have to be certified as 'A-Master Green' pilots, which requires about 100 hours of flying on the new machines.
Sources said the government has already paid over 45% of the total contract value of Rs 3,546 crore. Further tranche of payments were linked to deliveries, through letters of credit. The next payment was coming up, ahead of the March delivery of the next three helicopters. The last two batches of three helicopters were to follow in May and July.
IAF saddled with 3 Agusta choppers with limited spares
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IAF saddled with 3 Agusta choppers with limited spares
