CAG slammed the Defence
Ministry and Air Force on Tuesday, for "several instances" of deviation
from rules in the procurement of VVIP choppers in the Rs 3,727 crore
AgustaWestland deal.
In
its report tabled in the Parliament, the Comptroller and Auditor
General also questioned the decision of the then IAF chief to hold the
trials of the two contenders for the deal abroad.
The
CAG also noted that the benchmark cost of Rs 4,871.5 crore for the 12
VVIP choppers was "unreasonably high" as compared to the Rs 3,966 crore
quoted by AgustaWestland.
"Several
instances have been observed where the Defence Ministry deviated from
the 2006 Defence Procurement Procedure and the tender for the deal
issued in Sept 2006," the report stated.
As per the DPP, a reasonable price is benchmarked by the Contract Negotiation Committee (CNC) while proceeding with a deal.
But
the benchmark price of Rs 4,871 crore arrived at by CNC was
"unreasonably high as it had provided no realistic basis for comparison
with the offered cost of Rs 3,966 crore (by AgustaWestland) for price
negotiations," the report said.
The
report added that while an approval for deviation was required to be
pursued with "extreme caution and in exceptional circumstances", the
frequent deviations made in this case are counter to the clauses of the
DPP 2006.
The
CAG also criticised the procurement of four additional choppers in the
deal at a cost of Rs 1,240 crore as "avoidable" and said that the
assessed requirement was not commensurate with the low utilisation
levels of existing helicopters providing transportation to VVIPs.
On
the evaluation of the choppers, the CAG said that trials for the
AgustaWestland model were conducted on representative Merlin helicopters
and not on the actual craft whereas the other contender, Sikorsky, had
offered its S-92 for try-outs.
"Even
at the stage of trials, the AgustaWestland chopper was in a
developmental phase. Evaluation of helicopter following different
methodologies could not give desired assurance that equal opportunity
was provided to both shortlisted vendors.
"Thus,
the recommendation and assurance given by the Chief of Air Staff in
October 2007 to conduct trials abroad lacked justification," the report
said.
The
CAG also questioned the offsets obligations carried out by
AgustaWestland, saying there was "ambiguity in the contract regarding
the type of services and export orders to be executed by IDS Infotech
(its Indian offsets partner)."
"AgustaWestland
gave a year-wise break up of work from 2011 to 2014 to be executed by
IDS Infotech under this offset programme even though the work had been
completed well before the conclusion of the contract in 2010," the
report said.
The
Anglo-Italian firm had projected seven programmes to be completed as
part of the offsets contract but "these allowed offsets were not
compliant with the DPP. "Besides many Indian offsets partners selected
for discharge of offsets obligations were not eligible," the CAG added.
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