CAG queries steep cost of VVIP copters

Aug 14, 2013 - Rajnish Sharma |

Age Correspondent

The Comptroller and Auditor-General has come down heavily on both the defence ministry and the Indian Air Force for several lapses in the procurement process for VVIP helicopters worth `3,727 crores from AgustaWestland.

The report, which was tabled in Parliament on Tuesday, while questioning the then Air Force Chief’s decision to conduct trials of two contenders for the helicopter deal overseas, observes that the benchmark cost of `4,871.5 crores for the 12 VVIP helicopters was “unreasonably high”, compared to the `3,966 crores quoted by AgustaWestland.
While noting other procedural lapses, the CAG report states: “Several instances have been observed where the defence ministry deviated from the 2006 Defence Procurement Procedure (DPP) and the tender for the deal issued in September 2006.” The DPP mandates that a reasonable price be benchmarked by the contract negotiation committee (CNC) while proceeding with a deal.
The report clarifies that the “benchmark price of `4,871 crores arrived at by the CNC was unreasonably high as it had provided no realistic basis for comparison with the offered cost of `3,966 crores (by AgustaWestland) for price negotiations.”

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