NEW DELHI - Taking a tough stand, India on Jan. 1 scrapped the scam-tainted Rs 3,600 crore VVIP helicopter deal with Anglo-Italian firm AgustaWestland, nearly a year after allegations surfaced that kickbacks to the tune of Rs 3,600 million were paid to bag the contract. Controversy over the 2010 deal for supply of 12 helicopters for Indian VVIPs erupted in February last year with the arrest of two top officials of the firm, triggering a political storm here. Former IAF chief S P Tyagi is one of the accused in the case which is being probed by the CBI.
India is also expected to levy damages of more than 500 million Euros (around Rs 40,000 million rupees) on the Anglo-Italian firm while invoking the clauses under the Integrity pact of the deal, sources said. A bank guarantee of 200 million euros (about Rs 17,000 million rupees) furnished by the company may also be seized by the government. “The Government of India has terminated with immediate effect the Agreement that was signed with AgustaWestLand International Ltd (AWIL) on 8 Feb., 2010 for the supply of 12 VVIP helicopters on grounds of breach of the Pre-contract Integrity Pact (PCIP) and the Agreement by AWIL,” a Defense Ministry release said. Immediately after the controversy erupted, the Defense Ministry had frozen the deal under which three of the 12 AW-101 helicopters had already been delivered by the company. India had made 30 per cent payment.