Part 1
(Speech of the Defence Minister Manohor Parrikar)
Sir, let me first make it very clear that whatever I am now putting before the House, if
(Speech of the Defence Minister Manohor Parrikar)
Sir, let me first make it very clear that whatever I am now putting before the House, if
you require, I will
authenticate it, I will certify it. It comes from the Ministry
files. I will not take any
names so that you don't get a reason for disturbing. I expected Mr.
Singhvi to be present here.
He must have lost lakhs of rupees in arguing a free case today. ...(Interruptions)...
I am, actually, praising
him. You don't want him to be praised. ...(Interruptions)...
He is a very good
lawyer and he puts up the case very strongly. So strongly that for quite
some time, even I was getting convinced by the argument. Probably, I now
understand how convincing he is. But, Sir, many times it so happens that
if the...(Interruptions)...
He is a very good
lawyer and he puts up the case very strongly. So strongly that for quite
some time, even I was getting convinced by the argument. Probably, I now
understand how convincing he is.
 |
| Sober but Raksha Mantri put across his point |
But if the brief is very
weak, even the best advocate can't win the
case.
While I was listening to him, I remembered a story which I had read in my childhood of Badshah Akbar and Birbal. One day it happened that a golden spoon was stolen from Badshah's mahal. He didn't want it to be given for criminal investigation at that time because that would put him in a very embarrassing situation. So he called Birbal and told him that someone has stolen a golden spoon from his cutlery.
What do I do?
While I was listening to him, I remembered a story which I had read in my childhood of Badshah Akbar and Birbal. One day it happened that a golden spoon was stolen from Badshah's mahal. He didn't want it to be given for criminal investigation at that time because that would put him in a very embarrassing situation. So he called Birbal and told him that someone has stolen a golden spoon from his cutlery.
What do I do?
Birbal told him, 'I will find out the solution. Get all the servants.' He called all the servants and gave them one feet long piece of bamboo and told them that it was a magic bamboo. He told them to take it home,
The one who had stolen
the golden spoon, was a worried man. He could not sleep up to 2 o'
clock. Then he suddenly got an idea. He got up at 2 o'clock, brought a knife and
cut his bamboo by four inches, .......(interruptions ....)
Next day morning, of
course, he got caught. What I find in their argument is that they have cut all
their bamboos by four
inches. ...(Interruptions)... Sir, I am placing herein the statement of facts of
the case in detail. .... A litany of omissions and
commissions at various stages of the decision-making process indicates mala
fide and corrupt actions, driven by the goal to favour a particular vendor.
This has been recognised by the Italian court in their judgement. At the
outset, it may be useful to highlight to hon. Members, some of the salient
issues. ...
Creation of a single vendor scenario. At various stages from
March, 2005 onwards, and despite specific direction to the contrary, ORs
(Operational Requirements) and SQRs were set, amended and processes
influenced to make AWIL, the "only alternative". Violation of accepted
norms of procurement processes. Unusually, a
large number of
deviations approved, counter-party to the supply agreements and exceptional
dilution of FET standards.
......for the then Indian authority to ask the CBI to investigate. ...(Interruptions)...
Cancellation of deal spurred by actions of supplier. The Deal was cancelled by the Government of India under advice from the A.S.G., not as a suo motu action, but in response to the vendor, seeking the appointment of an arbitrator. ...(Interruptions)...
Delay in action against the supplier Group. From the first media report, in February, 2012, the approval to cancel all dealings with the Group was given more than two
Cancellation of deal spurred by actions of supplier. The Deal was cancelled by the Government of India under advice from the A.S.G., not as a suo motu action, but in response to the vendor, seeking the appointment of an arbitrator. ...(Interruptions)...
Delay in action against the supplier Group. From the first media report, in February, 2012, the approval to cancel all dealings with the Group was given more than two
years later on the eve of change in Government. ...(Interruptions)... In fact,
the final order was given by the present Government. ........
It is also significant
to note that the judgement of the
Italian court which spurred action from the Government of India was...
...(Interruptions)...
spurred action from
Government of India
was based inter alia
on the CAG Report from India.
...(Interruptions)...
Conduct of trials in
India is
extremely critical,
especially, for helicopters meant to carry VVIPs because the terrain, climate
and topographic conditions greatly vary with those of
USA and UK. This
crucial aspect has been given a go-by by permitting trials
in foreign lands. The
serious nature of deviations from standard FET
conditions for the
AW-101 in terms of trials being held outside India and not
on the actual
helicopter was exacerbated by the fact that even at the time of
FET, the Augusta
Westland helicopter was in developmental stage.
............
Mr. Deputy Chairman,
Sir, this created some problems when the three
helicopters were
received and were being put on test trials. I will just read
one para from a file
of Air Force where the trials were taking place. I will
read one para only. I
quote, "At Srinagar, 5,400 feet above the sea level, effective payload of
this helicopter is nil in OGL configuration at all ranges of temperature. Even in
IGE configuration, a reduced payload is to be accepted. The common
VVIP sorties to Nehru Helipad cannot be undertaken. Similar is
the case of Gulmarg, Pahalgam where VVIP sorties have been flown in the
past using Mi-17iv helicopter." This file luckily was saved from a
devastating fire which took place on 3rd of June, 2014 which
burnt down all the
records in that particular office. But this file remained in
the drawer of the
officer.
So, it survived. ...(Interruptions)... This could not
So, it survived. ...(Interruptions)... This could not
be further verified because
obviously the helicopter was stopped from
testing after that.
...(Interruptions)...
Additional
commercial quotes sought from both the vendors. Third,
acceptance of the
partial compliance of the two SQRs in respect of AW-101
non-VIP version
helicopter. Neither S-92 nor AW-101 fully complied with
SQR in the FET.
However, AW-101 was recommended for induction in spite
However, AW-101 was recommended for induction in spite
of emerging as a
single vendor by waiving off two parameters, while no such
concession was granted
to S-92. The warranty of 'three years/2000 hours
whichever is earlier'
on the airframe and 'three years/1200 hours whichever is
earlier' on the engine
offered by M/s Sikorsky and 'three years/900 hours
whichever is earlier'
offered on the whole helicopter by M/s AWIL was
accepted instead of
RFP stipulation of 'three years/900 hours whichever is later'. Acceptance of
option clause for three years instead of five years.
Inclusion of additional items such as Traffic Collision and Avoidance System,
Enhanced Ground Proximity
Warning System for all 12 helicopters and
Medevac system for 8
VVIP helicopters at CNC stage. ...(Interruptions)...
Deletion of Active
Missile Approach Warning System, Incorporation of Rear
Air Stairs in 04
non-VVIP helicopters. ...(Interruptions)... Completion of
helicopter delivery in
39 months instead of 36 months.
The accepted principle in procurement is that deviations must be approved only under exceptional circumstances, for robust rationale and exercising extreme caution. ...(Interruptions)... The numerous deviations approved appear to flout this norm, as has also been pointed out by the Comptroller and Auditor General in their report.
The accepted principle in procurement is that deviations must be approved only under exceptional circumstances, for robust rationale and exercising extreme caution. ...(Interruptions)... The numerous deviations approved appear to flout this norm, as has also been pointed out by the Comptroller and Auditor General in their report.
That CAG Report has highlighted that the
allowed offsets were not compliant with DPP and many Indian Offset Partners
were not eligible. Augusta Westland gave a year-wise breakup of work from
2011 to 2014 to be executed by IDS Infotech under this
offset programme even
though the work has been completed well before the
conclusion of the
contract in 2010.
Now, this is very
important. Investigation in the
matter so far revealed involvement of IDS Infotech as a conduit for transfer
of bribe money. We have already got court orders on that too. I would
explain what action we have taken on that.
The benchmark
cost arrived by CNC was unreasonably high and had
provided no realistic
basis for price negotiations. The benchmark cost as
worked out by CNC was
Euro 727 million, approximately, Rs. 4,877.50
cores, which is six
times the estimated total project cost of Rs. 793 crores,
in January, 2006,
wherein the estimated unit cost of AW-101 – this is very
important – was
considered as Rs. 100 crore, approximately Euro 15 million,
at the time of SOC.
When the recommendation was given for acceptance of
RFP, this was the
price quoted by the Air Force – Rs. 100 crores, that is,
Euro 15 million. The
CAG Report has stated that the base price of US $ 27
million for the year
2000 was adopted by CNC, while the base price of AW- 101 VIP helicopter was
US $ 18.2 million in the year 2010, as seen from the Internet.
(BJP MP created Swamy-phobia in Rajya Sabha)
Even the Air Force has estimated it as 15 million dollars in
2006. It is there on the records....
I am reading from the
CAG Report. I would provide whatever
clarifications you may need later. ...(Interruptions)... MoF, in their
observation on CCS note, stated that they are unable to support the proposal.
The Ministry of Finance also asked that a response to the letter of the MP, Nathubhai G. Patel to the CVC may be
incorporated in the
final CCS note along with MoD’s response thereon.
Similar concerns were
raised by the MP before the CVC, stating that
the case is in
violation of CVC norms. The CCS approved the
proposal for procurement of 12 VVIP and VIP helicopters from
Messrs Augusta Westland, UK, in the meeting held on 18th January, 2010, for the
following reasons:
(i) Augusta Westland helicopters
have been selected after multivendor competition bid, for which RFPs have been
issued to six vendors, out of which only two vendors responded. (ii) Augusta
Westland helicopter was the only helicopter that met the SQRs framed for the
VVIP version and the operational requirements of the IAF. The other helicopters
participating in the trial did not meet the SQR. (iii) The present fleet of
VVIP helicopters will complete their total technical life in the year 2010.
Even the deliveries of
three helicopters
were accepted in
December, 2012. ...(Interruptions)... Only on
receiving the reports
of arrests of M/s. Finmeccanica Chief, Mr. Orsi,
the Ministry of
Defence, on 12th February, 2013, asked the CBI to
conduct an inquiry
into the matter. ...(Interruptions)...
The operation of the
agreement was put
on hold and payments
stopped with issuance of the first Show Cause
Notice (SCN) to M/s.
AWIL, UK, on 15.02.2013. ...(Interruptions)...
The Italian authorities commenced criminal proceedings
from 19th June, 2013, at the Court of Busto Arsizio, Milan, in this case. The
documents obtained through these
proceedings have been shared with the CBI and the ED. ...(Interruptions)...
Some of the documents so received were used in taking action for
cancellation of contract. ...(Interruptions)... These documents included a
classified document titled 'Revised Operational Requirements for VVIP
helicopters'. ...(Interruptions)...
After consultation with ASG,
a Second SCN was issued to M/s AWIL, UK on
21.10.2013. M/s AWIL,
UK raised the issue of going for arbitration in the letter dated
4.10.2013, and, again in the response dated 25.11.2013 to the
A global RPF was issued to eleven vendors on 20th
March, 2002. The technical evaluation ...(Interruptions)... The Technical
Evaluation Committee shortlisted three vendors viz., MI- 172, EC-225, and
EH-101. The flight evaluation of EH-101 could not be done as the helicopter was
not certified for an altitude of 6,000 meters. There was a mention that this
did not participate. They did participate, but it was not certified for an
altitude of 6,000 meters, as a mandatory operational requirement.
The EH-101 helicopter was later renamed as AW101 of AgustaWestland. After flight evaluation, only EC-225 was found suitable for acquisition, as it had met all mandatory operational requirements. The PMO, in December, 2003 – I am confirming that – observed that the framing of mandatory ORs has effectively led to acquisition into a singlevendor situation. It was inter alia considered to make the operational altitude of 4,500 meters as mandatory and a higher flying ceiling of 6,000 meters and a cabin height of 1.8 meter as desirable operational requirement, 'desirable'.
From 2005 onwards, a series of measures were taken by the then Government which resulted in eventual acquisition of AW helicopter. These steps constituted a subject matter of stringent criticism by the Comptroller and Auditor General of India. And, tragically, the motives behind these decisions are today being doubted by the entire nation. As I said in my opening remarks, the fact that there was corruption in the matter is brought out in extensive details – Mr. Antony himself said that there was corruption – in recent judgements of Milan High Court.
It dominates our public discourse. Sadly, it has also dented the country's image and standing in the world. The country wants to know as to who instigated, who supported and who benefited from the corruption. We cannot let this pass. On 1st March, 2005, a meeting was chaired by the National Security Advisor. As I said, this was during UPA-I. The PMO wherein it was inter alia agreed that the ORs should broadly confirm to the parameters of MI-8 helicopters. It was also agreed that the Defence Secretary would take a meeting with participation of the Air Force, the SPG and the Secretary (Security) to draw up the operational specifications and the single-vendor situation should be avoided.
The ORs were accordingly finalized in a meeting chaired by the Defence Secretary on 9th May, 2005. (Contd. by 4k _ PK) -USY/PK-GS/6.40/4K SHRI MANOHAR PARRIKAR (CONTD.): The cabin height of 1.8 metres was made mandatory in the revised Service Quality Requirements. ...(Interruptions).. The acceptance of necessity for the procurement of 12 helicopters at Rs.793 crores was accorded by the Defence Acquisition Council on 3rd January, 2006, under 'Buy' category with 30 per cent offsets. The Request for Proposals was subsequently issued to six vendors -- -- including M/s AgustaWestland, Italy, on 27th September, 2006.
(to be continued.......in part 2)
The EH-101 helicopter was later renamed as AW101 of AgustaWestland. After flight evaluation, only EC-225 was found suitable for acquisition, as it had met all mandatory operational requirements. The PMO, in December, 2003 – I am confirming that – observed that the framing of mandatory ORs has effectively led to acquisition into a singlevendor situation. It was inter alia considered to make the operational altitude of 4,500 meters as mandatory and a higher flying ceiling of 6,000 meters and a cabin height of 1.8 meter as desirable operational requirement, 'desirable'.
From 2005 onwards, a series of measures were taken by the then Government which resulted in eventual acquisition of AW helicopter. These steps constituted a subject matter of stringent criticism by the Comptroller and Auditor General of India. And, tragically, the motives behind these decisions are today being doubted by the entire nation. As I said in my opening remarks, the fact that there was corruption in the matter is brought out in extensive details – Mr. Antony himself said that there was corruption – in recent judgements of Milan High Court.
It dominates our public discourse. Sadly, it has also dented the country's image and standing in the world. The country wants to know as to who instigated, who supported and who benefited from the corruption. We cannot let this pass. On 1st March, 2005, a meeting was chaired by the National Security Advisor. As I said, this was during UPA-I. The PMO wherein it was inter alia agreed that the ORs should broadly confirm to the parameters of MI-8 helicopters. It was also agreed that the Defence Secretary would take a meeting with participation of the Air Force, the SPG and the Secretary (Security) to draw up the operational specifications and the single-vendor situation should be avoided.
The ORs were accordingly finalized in a meeting chaired by the Defence Secretary on 9th May, 2005. (Contd. by 4k _ PK) -USY/PK-GS/6.40/4K SHRI MANOHAR PARRIKAR (CONTD.): The cabin height of 1.8 metres was made mandatory in the revised Service Quality Requirements. ...(Interruptions).. The acceptance of necessity for the procurement of 12 helicopters at Rs.793 crores was accorded by the Defence Acquisition Council on 3rd January, 2006, under 'Buy' category with 30 per cent offsets. The Request for Proposals was subsequently issued to six vendors -- -- including M/s AgustaWestland, Italy, on 27th September, 2006.
(to be continued.......in part 2)
No comments:
Post a Comment