AgustaWestland case: This is why CBI wants to question two Governors

The Central Bureau of Investigation or CBI has reportedly asked the Law Ministry if it can question West Bengal Governor MK Narayanan and Goa Governor BV Wanchoo in its investigation into alleged kickbacks in the Rs 3600-crore VVIP helicopter deal.
The government had earlier this month terminated the deal for 12 helicopters alleging that AgustaWestland, the British subsidiary of an Italian company contracted to supply the helicopters for use by the President, Prime Minister and other VIPs had breached an integrity pact by allegedly paying bribes to Indian officials.
CBI sources said Mr Narayanan, who was then the National Security Adviser or NSA and Mr Wanchoo as head of the elite Special Protection Group or SPG, were part of meetings where specifications for the helicopters were changed.

The change in “service ceiling” (or the altitude at which a helicopter can fly) from the 6000 metres suggested Air Head Quarters to 4500 metres had allowed AugustaWestland to enter the race.

So far the CBI has named former Air Chief SP Tyagi, his cousins and several others in its First Information Report or FIR. It has now reportedly written to the Law Ministry and attached documents to show that Mr Narayanan and Mr Wanchoo were part of the team of senior officials who cleared the changes.

As Governors, Mr Narayanan and Mr Wanchoo have legal immunity and the CBI will need the President’s assent to question them. However, if the law ministry clears the CBI request, it might not need to seek the President’s nod.

Last year, a a detailed investigation by NDTV had revealed that Air Chief Marshal Tyagi wasn’t alone in identifying and finalising the Italian Company’s name for supply of 12 VVIP helicopters to India.

Records in the government had revealed that several top officials including the Narayanan, Wanchoo, then Defence Secretary Ajai Vikram Singh and current CAG Shashikant Sharma, who was then Joint Secretary (air), were all involved in deciding the specifications that allowed AgustaWestland to enter the competition. A series of at least half a dozen meetings between November 2004 and September 2006 were held at the highest level in the government involving the Prime Minister’s Office (PMO), Ministry of Defence (MoD), Representatives of the SPG and the Indian Air Force (IAF) before specifications and technical requirements for procuring the VVIP helicopters were finalised and then a Request for Proposal (RFP) issued. Decisions taken in these meetings in fact allowed AgustaWestland to enter the competition post-2006, our investigations show.

Here’s a detailed account of how the case progressed and how at each stage, every stakeholder was involved and how each of them concurred with a collegiate decision.

Nov 8, 2004: Defence Secreatary Ajai Vikram Singh holds a meeting attended by Deputy Chief of IAF, Additional Secretary (Acquisition), Joint Secretary and Acquisition Manager (air), SK Sharma (who went on to become┬áDefence Secretary in 2011 and is now, CAG), OSD, PMO, Director PMO, IGP, SPG among others. SK Sharma informs the meeting that “Air HQ had reviewed the OR (operational requirement) pertaining to mandatory service ceiling of 6,000 metres and came to the conclusion that it would not be feasible to reduce the service ceiling to 4,500 m, as with 4500 m altitude the helicopter would land only at altitudes that were substantially lower. Air HQ advised that it would not be prudent to change the mandatory OR of service from 6,000 metres to 4500 metres.”

In response to the Air HQ stand, the PMO representative referred to earlier minutes of the meeting held in the PMO and stated that previous VVIP movements had not exceeded 4500 metres, and hence relevance of 6000 metres as the service ceiling altitude was not clear. He also stated that the views of the PMO were not obtained while finalising the ORs and the aim was to have wider competition for procurement. So the meeting decided that the PMO would give a list of requirements on the aspects relating to safety, security and comfort of VVIPs and also confirmation on the specific need for 6000 metres ceiling, that is use of helicopters at high altitude.

March 1, 2005: NSA MK Narayanan chairs a meeting with Defence Secretary, Secretary (security), Director IB, Director SPG and Deputy Air Chief. The meeting agrees to the following: Since the proposal is to procure helicopters to replace existing Mi-8 helicopters, the ORs should broadly conform to the parameters of Mi-8 which was the most widely used VVIP chopper at that time (This meant the altitude ceiling of 4500 metres was acceptable to PMO since Mi-8’s reach was only upto that altitude). Defence Secretary would be convening a meeting with participation of IAF, SPG, Secretary (security) to draw up the operational specifications for the VVIP helicopters in light of the above. A single vendor situation should be avoided.

March 7, 2005: Then Deputy Air Chief convenes a meeting at Air HQ attended by Director SPG, JS and AM (Air), IG, SPG among others. All ORs are deliberated during the meeting. Point eight of the minutes of the meeting says for instance notes: “The earlier OR of 6 km altitude and performance required at 5 km had been reduced to 4.5 km and 2 km respectively to avoid single vendor situation. Both were accepted as mandatory ORs.” In other words, every stakeholder agreed to the revised ORs.

March 14, 2005: The revised ORs are approved by the Air Chief, Air Chief Marshal SP Tyagi. The Deputy Air Chief forwards the finalised ORs approved by ACM Tyagi to Special Secretary (Acquisition). The Deputy Chief also writes: “It is felt that with the finalised ORs, a single vendor situation will be avoided.” (This is conformity with the PMO’s insistence to avoid single vendor situation)

April 1, 2005: Revised ORs are presented to Defence Secretary.

April 15, 2005: Based on discussions with Defence Secretary on the revised ORs, IAF’s Assistant Chief of Air Staff , ACAS(plans) forwards the amended ORs to the Joint Secretary and Acquisition Manager (Air) (in this case SK Sharma) stating: “The ORs have now been made specific, to minimise subjectivity.”

May 9, 2005: Defence Secretary chairs meeting of all stake holders (Secretary Security, Deputy Air Chief, Joint Secretary Air, IG, SPG among others) and each Operational requirement including altitude, cabin height, security and communication is discussed.

October 7, 2005: Deputy Air Chief director SPG, JS (Air) among others decided to increase number of helicopters from 8 to 12 for operational and security requirements. With the ORs now locked, further discussions take another 11 months before the MoD finally issues RFP.

September 27, 2006: Request for proposal for acquiring 12 VVIP helicopters issued. Three companies including AgustaWestland respond. These companies — makers of Mi-172, Sikorsky which made the S-92 helicopters and Augusta Westland’s AWA101 — responded to the RFP. Meanwhile the MoD had put in place a new concept — the Defence Procurement Procedure (DPP) — which lays down stringent rules and regulations. Under the DPP all companies that bid for contracts above 100 crore rupees have to sign an integrity pact which binds the companies to give an undertaking that no bribes would be paid or agents would be used in the contracts. The Russian company that makes Mi-172 withdrew from the competition at an early stage refusing to sign the integrity contract! That left AgustaWestland and Sikorsky in the race.

By now this was late 2007. The evaluations and trials of S-92 and AW101 began and continued over the next couple of years (2008-09). According to Air Force sources S-92 was found to be non-compliant on four counts: It could not reach 15000 feet without maximum power Its ‘hover out of ground effect’ wasn’t sufficient Its drift down altitude was not meeting the requirement Missile airborne warning system wasn’t up to the mark AgustaWestland with its three engines was a bonus, according to Air Force test pilots since one engine failure still meant it had two to fall back upon.

Sometime in 2009, Air HQ sent its recommendation to the Defence Ministry and after going through all the stringent financial and technical requirements mandatory under the DPP, a contract was signed in February 2010.