This Article is From Aug 13, 2013

VVIP chopper scam: Key findings of CAG report

VVIP chopper scam: Key findings of CAG report
New Delhi: A report by the government auditor, CAG, has found major irregularities in a Rs 3,600-crore VVIP helicopter deal with Italian manufacturer AgustaWestland (AW). In its report tabled in Parliament today, the Comptroller and Auditor General or CAG said that the government had failed to follow defence procurement policy rules in awarding the contract for 12 VIP choppers.

Here are some of the findings of the report:

  • The fact remains that despite the directions of the Prime Minister's Office (PMO) to make SQR (staff qualitative requirements) broad-based to increase competition, the SQR were made more restrictive which narrowed down the choice to a limited range of helicopters, capable of meeting the requirements of VVIP fleet.

  • "We have observed that the past trend of low utilisation levels (29 per cent) over a period of 11 years (1999-2010) of the existing fleet of eight helicopters by VVIP and rest of the flying for training ad use by OEPs does not lend credence to the ministry's justification for additional procurement of helicopters. This apprehension was also expressed by RM."

  • Revision of SQR... the acquisition process again led to a resultant single vendor situation in 2010 and AW 101 was selected.

  • Field trials are held with representative helicopters of AW 101 and actual helicopters AW -101.

  • The contracted helicopter was still in its developmental phase, as stated by the vendor. The recommendation and assurance given by the Indian Air Force (IAF) Chief (October 2007) to conduct evaluation trials abroad lacked justification.

  • Audit is unable to agree with the Ministry's assertion as the Field Evaluation Team (FET), in its inspection report, had clearly mentioned (January 2008) that AW-101 as offered to the IAF was in a product developmental phase. Therefore, the FET was carried out on a Merlin MK- 3A (primarily for evaluation of avionics, navigation systems and maintenance). 

  • The benchmark cost adopted by Cost Negotiation Committee was unreasonably high compared to the offered cost. Hence, it provided no realistic basis for obtaining an assurance about a reasonable cost procurement of AW -101. There were also violations in Defence Procurement Policy (DPP) in respect of fulfillment of offset obligations.
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