The Defence Ministry has issued a last show cause notice to Anglo-Italian firm AgustaWestland for cancelling its contract worth Rs 3,600 crore (556 million euros—Ed.) for supplying 12 choppers to the Air Force for “violating” the terms of its contract.
The notice was issued by the Ministry on October 21 wherein it has asked the Anglo Italian firm to clarify why “all or any action as prescribed, including cancellation of the contract, shouldn’t be taken against them for violating the terms of the pre-integrity pact and the contract for procurement of 12 VVIP choppers.”
The firm have been given 21 days to file its respond to the overall warning, Defence Ministry sources said here.
Asked in regards to the arbitration process invoked by AgustaWestland, they said these proceedings aren’t applicable at the breach of pre-contract integrity pact of the Defence Ministry.
The government has already frozen the contract for supply of 12 AW-101 VVIP choppers to the IAF after allegations that Rs 360 crore were paid as bribe during which two top officials of the corporate were accused.
IAF has already received three helicopters and delivery of the remainder was wear hold.
The company last week said it has invoked arbitration proceedings against the Defence Ministry for “unilaterally” freezing the deal.
The sources claimed that the govt. were preparing to issue the awareness for cancellation much before AgustaWestland took the step.
The Defence Ministry had first issued a show cause notice to AgustaWestland on February 15 asking it to clarify within seven days the bribery allegations against it after the alleged scam was exposed in Italy.
In the awareness, the corporate was asked why the Rs 3,600 crore deal of 2010 shouldn’t be scrapped.
In its reply, AgustaWestland had denied the allegations. Former IAF chief S P Tyagi is among those under cloud in reference to the kickback charges.
The CAG also recently highlighted loopholes within the deal. Soon after the arrest of the firm’s former CEO, Guiseppe Orsi, in Italy in reference to the case, Defence Minister A K Antony had suspended the payments to be made to it which includes the delivery it was because of make to IAF for the remainder nine choppers.
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