New Delhi: Having frozen all further payments to AgustaWestland, the Manmohan Singh government is fast veering towards cancelling the VVIP helicopter deal, with the beleaguered defence ministry reiterating on Thursday that it would take “all possible legal and administrative action against the guilty parties”.
The defence ministry signalled its intent by writing to the CEO of AgustaWestland to “categorically” state if the company had paid bribes to swing the deal. “AgustaWestland has been asked to specifically indicate if any financial transaction has taken place with any Indian individual or entity...in violation of the integrity pact or other terms and conditions of the contract,” the letter said. Tough response likely ahead of Budget session
Although no finger has been pointed at Antony, he is being blamed for not movingly swiftly enough when the first whiffs of bribery surfaced over 11 months ago. The minister has been criticized for bringing in the CBI only this week after the top executives of AgustaWestland and its parent company Finmeccanica were arrested in Italy.
A strong indication of Antony’s resolve to repair the perception came in the form of a sixpage factsheet, issued by the MoD on Thursday, which shielded him from the controversial decision to tweak the technical specifications for the helicopters.
Government sources said outright cancellation of the contract was no longer a far-fetched possibility. “If the contracts for the Bofors howitzers and the HDW submarines in the mid-1980s could be terminated mid-way, even if they hit the operational readiness and modernization of the armed forces in a major way, these are just choppers meant for VVIP travel,’’ said a source.
Significantly, Antony had on Wednesday stated he would not shy away from taking extreme action if the CBI probe corroborated the charges against AgustaWestland in the Italian court.
The looming Budget session of Parliament, and the indication that the opposition is all set to feast on the latest scandal to hit the UPA, is proving to be a big push for a tough response. The session is set to start on February 21, and there are indications that the MoD might not even wait for the CBI to submit a formal report.
Defence secretary Shashikant Sharma, as reported by TOI earlier, has also asked the Indian ambassador in Italy to formally procure the Italian court documents detailing the alleged payment of 51 million euros to swing the contract for AgustaWestland.
These documents obtained officially could serve as a tool for action in case the government feels it cannot afford to wait for the CBI to give its findings. “We want to finish the ongoing review of the contract and take a decision before the next delivery of helicopters...Proper documentation will ensure there is no financial loss to India in the case of arbitration or other proceedings at a later stage,’’ said a senior official.
Despite having inducted only three of the AW-101 helicopters till now, with the remaining nine slated for delivery in batches of three each in March, May and July, the defence ministry has already put on hold all further payments to AgustaWestland. India has paid a little over 50% of the total amount to this UK-based subsidiary of Italian military giant Finmeccanica till now, while another tranche was to be paid later this month.
Both the contract and integrity pact inked with AgustaWestland contain specific provisions by which “strict action including the cancellation of contract, recovery of payment, blacklisting and penal action” can be unleashed against the vendor.
Article 22 of the inked contract, for instance, deals with the penalty for the “use of undue influence”. It entitles the buyer to cancel the contract with the seller and recover from him the amount of any loss arising from such cancellation.
Article 23, in turn, deals with agents and agency commission, requiring the seller to confirm and declare that the company has not engaged any individual or firm – Indian or foreign – to intercede or facilitate in any way with the Indian government or its officials.
Any breach of the integrity pact, in turn, entitles the buyer to take actions against the seller, ranging from forfeiture of the earnest money and performance bond to contract cancellation and recovery of the sum already paid with interest.
COURTESY:
Rajat Pandit & Josy Joseph TNN
http://epaper.timesofindia.com/Default/Scripting/ArticleWin.asp?From=Archive&Source=Page&Skin=TOINEW&BaseHref=TOIM/2013/02/15&PageLabel=3&EntityId=Ar00307&ViewMode=HTML
The defence ministry signalled its intent by writing to the CEO of AgustaWestland to “categorically” state if the company had paid bribes to swing the deal. “AgustaWestland has been asked to specifically indicate if any financial transaction has taken place with any Indian individual or entity...in violation of the integrity pact or other terms and conditions of the contract,” the letter said. Tough response likely ahead of Budget session
Although no finger has been pointed at Antony, he is being blamed for not movingly swiftly enough when the first whiffs of bribery surfaced over 11 months ago. The minister has been criticized for bringing in the CBI only this week after the top executives of AgustaWestland and its parent company Finmeccanica were arrested in Italy.
A strong indication of Antony’s resolve to repair the perception came in the form of a sixpage factsheet, issued by the MoD on Thursday, which shielded him from the controversial decision to tweak the technical specifications for the helicopters.
Government sources said outright cancellation of the contract was no longer a far-fetched possibility. “If the contracts for the Bofors howitzers and the HDW submarines in the mid-1980s could be terminated mid-way, even if they hit the operational readiness and modernization of the armed forces in a major way, these are just choppers meant for VVIP travel,’’ said a source.
Significantly, Antony had on Wednesday stated he would not shy away from taking extreme action if the CBI probe corroborated the charges against AgustaWestland in the Italian court.
The looming Budget session of Parliament, and the indication that the opposition is all set to feast on the latest scandal to hit the UPA, is proving to be a big push for a tough response. The session is set to start on February 21, and there are indications that the MoD might not even wait for the CBI to submit a formal report.
Defence secretary Shashikant Sharma, as reported by TOI earlier, has also asked the Indian ambassador in Italy to formally procure the Italian court documents detailing the alleged payment of 51 million euros to swing the contract for AgustaWestland.
These documents obtained officially could serve as a tool for action in case the government feels it cannot afford to wait for the CBI to give its findings. “We want to finish the ongoing review of the contract and take a decision before the next delivery of helicopters...Proper documentation will ensure there is no financial loss to India in the case of arbitration or other proceedings at a later stage,’’ said a senior official.
Despite having inducted only three of the AW-101 helicopters till now, with the remaining nine slated for delivery in batches of three each in March, May and July, the defence ministry has already put on hold all further payments to AgustaWestland. India has paid a little over 50% of the total amount to this UK-based subsidiary of Italian military giant Finmeccanica till now, while another tranche was to be paid later this month.
Both the contract and integrity pact inked with AgustaWestland contain specific provisions by which “strict action including the cancellation of contract, recovery of payment, blacklisting and penal action” can be unleashed against the vendor.
Article 22 of the inked contract, for instance, deals with the penalty for the “use of undue influence”. It entitles the buyer to cancel the contract with the seller and recover from him the amount of any loss arising from such cancellation.
Article 23, in turn, deals with agents and agency commission, requiring the seller to confirm and declare that the company has not engaged any individual or firm – Indian or foreign – to intercede or facilitate in any way with the Indian government or its officials.
Any breach of the integrity pact, in turn, entitles the buyer to take actions against the seller, ranging from forfeiture of the earnest money and performance bond to contract cancellation and recovery of the sum already paid with interest.
COURTESY:
Rajat Pandit & Josy Joseph TNN
http://epaper.timesofindia.com/Default/Scripting/ArticleWin.asp?From=Archive&Source=Page&Skin=TOINEW&BaseHref=TOIM/2013/02/15&PageLabel=3&EntityId=Ar00307&ViewMode=HTML
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