India finally cancelled the controversial Rs.3,546-crore Agusta-Westland contract for 12 VVIP helicopters that has been engulfed by allegations of kickbacks for over a year.
After holding a longish meeting with PM Manmohan Singh, defence minister A K Antony inked the order to “terminate with immediate effect” the contract signed for the three-engine AW-101 helicopters with AgustaWestland, the UK-based subsidiary of Italian conglomerate Finmeccanica, in February 2010.
“The contract has been terminated on the grounds of breach of pre-contract integrity pact and agreement by AgustaWestland,” a defence ministry official said. Antony himself had earlier held that AgustaWestland had violated the integrity pact and contractual obligations, which provide for “strict action, including cancellation of contract, recovery of payment, blacklisting and penal action” for the use of “undue influence”.
Having frozen all payments to the company since last February despite having inducted three of the 12 AW-101 helicopters, with around 45% of the total contract value already paid, the UPA government on Wednesday nominated former Supreme Court judge B P Jeevan Reddy as its arbitrator to “safeguard its interests” in the case.
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