The Rs 4,000-crore deal for AW-101 Augustawestland helicopters was under a cloud because of allegations of bribery and wrongdoing against the company. The Indian government decided to go ahead with the purchase after an internal inquiry and after the Indian Embassy in Rome was unable to substantiate any wrongdoing in the helicopter deal, sources said.
The sources told NDTV that the ministry's inquiry has revealed that although the then NDA government had, between 2002 and 2004, changed specifications and requirements, there was no "wrongdoing" or "malafide" established.
The Air Force had initially asked for choppers that could fly at about 18,000 feet. However, the then Government soon realised that only one manufacturer made helicopters that could fly to 18,000 ft. Also, it was decided, that VVIPs would rarely need to fly at such heights. And if they did, they could use other transport.
After several rounds of consultations, in which then Principal Secretary to the Prime Minister and National Security Advisor Brajesh Mishra also participated, the requirement was scaled down to helicopters that flew at 13,500 feet.
"Even with the changed specifications, the Indian Air Force can fly VVIPs to locations above Leh, the capital of Ladakh," a senior official told NDTV.
Italian manufacturer Finmeccanica, a company owned by the Italian Government, was contracted for the helicopters in 2010. In 2011, allegations of bribery and wrongdoing surfaced in Italy against the company. The Italian Government is investigating these allegations.
The Indian government, sources said, had asked the Indian Embassy in Rome to monitor the investigations in Italy to check if there was anything related to the Indian purchase. The embassy, sources said, had reported that it had not found anything to suggest that the sale of AW-101 helicopters to India was rigged.
Defence Minister A K Antony was briefed about the reasons for the change in requirements and also that there was no material evidence to support allegations of bribery in this deal, sources said.
Sources told NDTV that Mr Antony was advised that since the deal was initiated by the BJP-led NDA government, the contract could be cancelled even at this late a stage. But the minister refused to cancel the deal.
Last week, the Defence Ministry told Parliament that an "integrity clause" - which prohibits the manufacturer from paying commission or using middlemen - had been built into the contract. This will allow India to take action against the company if allegations of wrongdoing are proved at any time.