Parrikar invokes Magic Bamboo to find out 'invisible hand' in Agusta deal Featured

  • Thursday, May 05 2016

Defence Minister Manohar Parrikar's speech on Agusta Westland Deal (Unedited) 

MR. DEPUTY CHAIRMAN: Mr. Minister, please. THE MINISTER OF DEFENCE (SHRI MANOHAR PARRIKAR): Sir, let me first make it very clear that whatever I am now putting before the House, if you require, I will authenticate it, I will certify it. It comes from the Ministry files. (Contd. by DC/4G) -KGG/DC-VNK/4G/6.25 SHRI MANOHAR PARRIKAR (CONTD.): I will not take any names so that you don't get a reason for disturbing. I expected Mr. Singhvi to be present here.

He must have lost lakhs of rupees in arguing a free case today. ...(Interruptions)... MR. DEPUTY CHAIRMAN: Please. ...(Interruptions)... Please, listen. ...(Interruptions)... You have to listen. ...(Interruptions)... No, no. Don't interrupt. ...(Interruptions)... Listen to him. ...(Interruptions)... You listen to the Minister. ...(Interruptions)... SHRI ANAND SHARMA: Sir, he is an hon. Member of this House. ...(Interruptions)... Sir, the profession is separate. Hon. Defence Minister should not refer to his profession. ...(Interruptions)... ! "#$& '(&)& : \P ]ZX TS^ _X `a, b^L K VS WUM ^cdef[ I am, actually, praising him. You don't want him to be praised. ...(Interruptions)... MR. DEPUTY CHAIRMAN: You address the Chair. Hon. Minister, address the Chair. Don't look at them, address the Chair and say what you want to say. SHRI MANOHAR PARRIKAR: He is a very good lawyer and he puts up the case very strongly. So strongly that for quite some time, even I was getting convinced by the argument. Probably, I now understand how convincing he is. But, Sir, many times it so happens that if the...(Interruptions)... MR. DEPUTY CHAIRMAN: No comments, please. ...(Interruptions)... No comments. ...(Interruptions)... Please listen. SHRI MANOHAR PARRIKAR: If the brief is very weak, even the best advocate can't win the case. While I was listening to him, I remembered a story which I had read in my childhood of Badshah Akbar and Birbal. One day it happened that a golden spoon was stolen from Badshah's mahal. He didn't want it to be given for criminal investigation at that time because that would put him in a very embarrassing situation. So he called Birbal and told him that someone has stolen a golden spoon from his cutlery. What do I do? Birbal told him, 'I will find out the solution. Get all the servants.' He called all the servants and gave them one feet long piece of bamboo and told them that it was a magic bamboo. He told them to take it home, deWML gS_c dRZX h,QWRX TiT` WUT VR gX_ jkg Tl eXfYX[ He told them that it was a magical bamboo piece. Everyone believed Birbal and they went home. The one who had stolen the golden spoon, was a worried man. He could not sleep up to 2 o' clock. Then he suddenly got an idea. He got up at 2 o' clock, brought a knife and cut his bamboo by four inches, expecting it to grow by twelve inches the next day morning. Next day morning, of course, he got caught. What I find in their argument is that they have cut all their bamboos by four inches. ...(Interruptions)... Sir, I am placing herein the statement of facts of the case in detail. ...(Interruptions)... A litany of omissions and commissions at various stages of the decision-making process indicates mala fide and corrupt actions, driven by the goal to favour a particular vendor. This has been recognised by the Italian court in their judgement. At the outset, it may be useful to highlight to hon. Members, some of the salient issues. ...(Interruptions)... SHRI ANAND SHARMA: Sir, I have a point of order. ...(Interruptions)... Sir, I am on a serious point of order. ...(Interruptions)... *+*,!- ).-/ "+0.1- "2 &.3- "+0! ( ! "456.& 789.* #:;!) : W_, Z V_cRX mcR MO h[ ...(nZKoXM)... Under which rule? Sir, what is going on? p\qec, eT rbRL ^csWt TS^L, VT dRWc ML QMRS dsuvTt MO dRZX[ ...(nZKoXM)... Z ]ZX V_cRX h? Every time you are disturbing. ...(Interruptions)... MR. DEPUTY CHAIRMAN: Let him reply. ...(Interruptions)... Let him reply. ...(Interruptions)... SHRI MUKHTAR ABBAS NAQVI: Under which rule is the point of order? ...(Interruptions)... SHRI ANAND SHARMA: Sir, before I spoke...(Interruptions)... The Minister must authenticate...(Interruptions)... Sir, the copy of the judgement must be authenticated. ...(Interruptions)... Don't get offended. ...(Interruptions)... Don't shout. ...(Interruptions)... MR. DEPUTY CHAIRMAN: He said he will indicate...(Interruptions)... He said that already. ...(Interruptions)... He already said that. ...(Interruptions)... SHRI ANAND SHARMA: Certified copy of the judgement must be placed here. ...(Interruptions)... SHRI MUKHTAR ABBAS NAQVI: Okay; it is all right. ...(Interruptions)... MR. DEPUTY CHAIRMAN: Do you agree to that? ...(Interruptions)... SHRI MANOHAR PARRIKAR: Creation of a single vendor scenario. At various stages from March, 2005 onwards, and despite specific direction to the contrary, ORs (Operational Requirements) and SQRs were set, amended and processes influenced to make AWIL, the "only alternative". Violation of accepted norms of procurement processes. Unusually, a large number of deviations approved, counter-party to the supply agreements and exceptional dilution of FET standards. (Followed by TDB/4H) TDB-DS/4H/6.30 SHRI JAIRAM RAMESH: Can we have a copy of the Statement? THE MINISTER OF DEFENCE (SHRI MANOHAR PARRIKAR): Yes, yes, I will be laying. ...(Interruptions)... ! >"$, ?6;.&! : WxvyXjs Rzbc {cdef[ ...(nZKoXM)... ! "#$& '(&)& : {L {`aYX[ ...(nZKoXM)... ! >"$, ?6;.&! : QWRc WxvyXjs Rzbc |}c {cdef[ ...(nZKoXM)... MR. DEPUTY CHAIRMAN: Yes, that is his speech. ...(Interruptions)... That is his prepared speech. ! &.@ 989& : Z ThiT` KX^c RXMc ]ZX h? ...(nZKoXM)... SHRI MANOHAR PARRIKAR: Suspect benchmarking of procurement costs, which may have led to the acceptance of materially overpriced supply agreements. ...(Interruptions)... MR. DEPUTY CHAIRMAN: What are you doing? Please sit down, sit down. ...(Interruptions)... THE MINISTER OF PARLIAMENTARY AFFAIRS (SHRI M. VENKAIAH NAIDU): Sir, please bring order in the House. ...(Interruptions)... ! &.@ 989& : ZL |RT_-Tc_T^ Rc RXMc WUMX _L P[ ...(nZKoXM)... THE MINISTER OF HUMAN RESOURCE DEVELOPMENT (SHRIMATI SMRITI ZUBIN IRANI): Sir, the Defence Minister of the country is quoting something. ...(Interruptions)... MR. DEPUTY CHAIRMAN: Now, please sit down. ...(Interruptions)... SHRI MANOHAR PARRIKAR: Delayed response to questions about the deal. It took a year and an arrest by the Italian authority... ...(Interruptions)... MR. DEPUTY CHAIRMAN: Mr. Jairam Ramesh, sit down. ...(Interruptions)... What do you want? That is his speech. He is not quoting. He said it in his speech. ...(Interruptions)... SHRI MANOHAR PARRIKAR: ...for the then Indian authority to ask the CBI to investigate. ...(Interruptions)... Cancellation of deal spurred by actions of supplier. The Deal was cancelled by the Government of India under advice from the A.S.G., not as a suo motu action, but in response to the vendor, seeking the appointment of an arbitrator. ...(Interruptions)... Delay in action against the supplier Group. From the first media report, in February, 2012, the approval to cancel all dealings with the Group was given more than two years later on the eve of change in Government. ...(Interruptions)... In fact, the final order was given by the present Government. ...(Interruptions)... SHRI ANAND SHARMA: Sir, that is not true. ...(Interruptions)... MR. DEPUTY CHAIRMAN: That is his speech. You listen to that. ...(Interruptions)... It is on record; he is speaking. What do you want? ...(Interruptions)...Yes. What are you doing? ...(Interruptions)... Now, you please proceed. ...(Interruptions)... SHRI MANOHAR PARRIKAR: It is also significant to note that the judgement of the Italian court which spurred action from the Government of India was... ...(Interruptions)... SHRI ANAND SHARMA: He has made a wrong statement. ...(Interruptions)... He said, 'more than two years'. MR. DEPUTY CHAIRMAN: Mr. Anand Sharma, you were a Minister. When you were a Minister, did you not read after preparation? A Minister can do that. ...(Interruptions)... He is doing only that. ...(Interruptions)... What are you doing? ...(Interruptions)... SHRI ANAND SHARMA: I will tell you, Sir. ...(Interruptions)... Please hear me. ...(Interruptions)... MR. DEPUTY CHAIRMAN: He is not quoting. He is not quoting. ...(Interruptions)... SHRI MANOHAR PARRIKAR: ...spurred action from Government of India was based inter alia on the CAG Report from India. ...(Interruptions)... MR. DEPUTY CHAIRMAN: He is not quoting. He is reading his speech. ...(Interruptions)... SHRI ANAND SHARMA: I am not commenting on that. ...(Interruptions)... *+*,!- ).-/ "+0.1- "2 &.3- "+0! ( ! "456.& 789.* #:;!): W_, jMRS Wg RX WX\MX MO R_MX h[ ZL W~gX WUMMX MO gX _L P[ Z V_cRX mcR MO h[ ...(nZKoXM)... rbRS W~gX WUMMc bÄLYc[ ...(nZKoXM)... rb WUMMX MO gXVL, jWRX \V^T eÅ_ RU Ç YÄTÄ h[ ...(nZKoXM)... rb ]ZÉ MO WUM _L P? Z V_cRX mcR MO h, p\q ec[ ...(nZKoXM)... |}c rbRS WUMXZX h, |}c Ñ_ WUdMf[ ...(nZKoXM)... MR. DEPUTY CHAIRMAN: Mr. Anand Sharma, what is the problem? ...(Interruptions)... Sit down, please. ...(Interruptions)... SHRI ANAND SHARMA: Sir, please. ...(Interruptions)... MR. DEPUTY CHAIRMAN: Mr. Anand Sharma, I will hear you. ...(Interruptions)... Listen. ...(Interruptions)... I will give you time. Sit down. But, listen. ...(Interruptions)... SHRI ANAND SHARMA: Sir, I am not objecting to that. ...(Interruptions)... MR. DEPUTY CHAIRMAN: The fundamental thing is that... ...(Interruptions)... Now, please. ...(Interruptions)... A Minister has every right to prepare a speech and read it out. Whatever he says, he is responsible. ...(Interruptions)... SHRI ANAND SHARMA: But I am not objecting to that. MR. DEPUTY CHAIRMAN: Then, why do you worry? SHRI ANAND SHARMA: Now, hear me. ...(Interruptions)... I will sit down. ...(Interruptions)... Now, you hear me. ...(Interruptions)... Will you hear me? MR. DEPUTY CHAIRMAN: Yes, what is that? SHRI ANAND SHARMA: Sir, I am not objecting to the right of the hon. Minister to read. I will hear him with all respect. ...(Interruptions)... MR. DEPUTY CHAIRMAN: Then, what is your problem? SHRI M. VENKAIAH NAIDU: Sir, just now Antonyji read from a piece of paper. We listened to him patiently. ...(Interruptions)... Mr. Anand Sharma was then sitting by his side. ...(Interruptions)... SHRI ANAND SHARMA: Sir, what the Minister has said contradicts his statement in the Parliament. ...(Interruptions)... He has said, 'two years'. I have a reply which I am quoting. ...(Interruptions)... He is making a wrong statement. ...(Interruptions)... MR. DEPUTY CHAIRMAN: In that case, you can... ...(Interruptions)... SHRI ANAND SHARMA: If I am wrong, he can take me to the court. ...(Interruptions)... MR. DEPUTY CHAIRMAN: If the Minister is misleading the House, you have the rule book. ...(Interruptions)... You invoke the necessary rule. ...(Interruptions)... SHRI ANAND SHARMA: How can he contradict himself? ...(Interruptions)... He is making a wrong statement in the House. ...(Interruptions)... SHRI M. VENKAIAH NAIDU: This is not what he says. MR. DEPUTY CHAIRMAN: Mr. Anand Sharma, it is not going on record. ...(Interruptions)... Mr. Anand Sharma, it is not going on record. ...(Interruptions)... I am not allowing Mr. Anand Sharma to speak. ...(Interruptions)... SHRI ANAND SHARMA: * SHRI M. VENKAIAH NAIDU: Sir, hon. A.K. Antonyji just now read from the papers. ...(Interruptions)... MR. DEPUTY CHAIRMAN: Yes, correct. ...(Interruptions)... SHRI M. VENKAIAH NAIDU: What Shri Anand Sharma is saying... ---------------------------------------------------------------------- *Not recorded. MR. DEPUTY CHAIRMAN: Correct. ...(Interruptions)... I permitted him, and he can do that. ...(Interruptions)... A Minister can always do. ...(Interruptions)... SHRI M. VENKAIAH NAIDU: You want to disturb the House. ...(Interruptions)... THE MINISTER OF COMMUNICATIONS AND INFORMATION TECHNOLOGY (SHRI RAVI SHANKAR PRASAD): Let the truth come on record. ...(Interruptions)... MR. DEPUTY CHAIRMAN: Mr. Anand Sharma, if the Minister is misleading, you can invoke the rule. ...(Interruptions)... Now, you listen. ...(Interruptions)... SHRIMATI SMRITI ZUBIN IRANI: Why do they obstruct the Minister? ...(Interruptions)...

 MR. DEPUTY CHAIRMAN: This side has made all its speeches. And, these were heard by the House. Now, you have the responsibility to hear the Minister also. Please do that. Mr. Minister, please speak. You address the Chair and do not look at them. ...(Interruptions)... The Minister can always read his speech. ...(Interruptions)... The Minister can always read his speech. ...(Interruptions)... There is no need of speech being authenticated. ...(Interruptions)... That is his speech. ...(Interruptions)...  2,- ..(%
).. That is his speech. ...(Interruptions)... SHRI MANOHAR PARRIKAR: Sir, on 5th August, 1999, the Air Force proposed the replacement of MI-8 VIP helicopters due to various constraints imposed by the MI8's limitations. ...(Interruptions)... MR. DEPUTY CHAIRMAN: That is his speech. ...(Interruptions)...   
  : ,   3 
,- SHRI MANOHAR PARRIKAR: A global RPF was issued to eleven vendors on 20th March, 2002. The technical evaluation ...(Interruptions)... The Technical Evaluation Committee shortlisted three vendors viz., MI- 172, EC-225, and EH-101. The flight evaluation of EH-101 could not be done as the helicopter was not certified for an altitude of 6,000 meters. There was a mention that this did not participate. They did participate, but it was not certified for an altitude of 6,000 meters, as a mandatory operational requirement. The EH-101 helicopter was later renamed as AW101 of AgustaWestland. After flight evaluation, only EC-225 was found suitable for acquisition, as it had met all mandatory operational requirements. The PMO, in December, 2003 – I am confirming that – observed that the framing of mandatory ORs has effectively led to acquisition into a singlevendor situation. It was inter alia considered to make the operational altitude of 4,500 meters as mandatory and a higher flying ceiling of 6,000 meters and a cabin height of 1.8 meter as desirable operational requirement, 'desirable'. From 2005 onwards, a series of measures were taken by the then Government which resulted in eventual acquisition of AW helicopter. These steps constituted a subject matter of stringent criticism by the Comptroller and Auditor General of India. And, tragically, the motives behind these decisions are today being doubted by the entire nation. As I said in my opening remarks, the fact that there was corruption in the matter is brought out in extensive details – Mr. Antony himself said that there was corruption – in recent judgements of Milan High Court. It dominates our public discourse. Sadly, it has also dented the country's image and standing in the world. The country wants to know as to who instigated, who supported and who benefited from the corruption. We cannot let this pass. On 1st March, 2005, a meeting was chaired by the National Security Advisor. As I said, this was during UPA-I. The PMO wherein it was inter alia agreed that the ORs should broadly confirm to the parameters of MI-8 helicopters. It was also agreed that the Defence Secretary would take a meeting with participation of the Air Force, the SPG and the Secretary (Security) to draw up the operational specifications and the single-vendor situation should be avoided. The ORs were accordingly finalized in a meeting chaired by the Defence Secretary on 9th May, 2005. (Contd. by 4k _ PK) -USY/PK-GS/6.40/4K SHRI MANOHAR PARRIKAR (CONTD.): The cabin height of 1.8 metres was made mandatory in the revised Service Quality Requirements. ...(Interruptions).. The acceptance of necessity for the procurement of 12 helicopters at Rs.793 crores was accorded by the Defence Acquisition Council on 3rd January, 2006, under 'Buy' category with 30 per cent offsets. The Request for Proposals was subsequently issued to six vendors -- b
^L 11 Kàs_ âX, |T 6 Kàs_ S YZX -- including M/s AgustaWestland, Italy, on 27th September, 2006. These changes in SQRs eliminated the EC-225 helicopter which had met the Operational Requirements earlier and allowed AW-101 helicopter to enter the fray. As highlighted by the CAG in its Report, instead of making the SQRs broadbased to increase the competition, those were made more restrictive, thereby narrowing down the choices to a limited range of helicopters. The purpose of avoidance of resultant single vendor situation could not be met and the acquisition process, again, led to a resultant single vendor situation. In effect, by changing the SQRs, a situation was created in which EC-225 helicopter, which had met all Operational Requirements earlier, was eliminated by putting the requirement of 1.858 metres of cabin as an essential criterion from the competition and facilitated emergence of AW-101 as a single vendor. While the RFP was issued to M/s AgustaWestland, Italy, the response to RFP was received from M/s AgustaWestland International Ltd., UK, which was not the entity to whom RFP was issued. Did the then Government examine the serious legal implications of this aspect? It later emerged that the Memorandum of Association of M/s AgustaWestland International Ltd., (AWIL) does not provide for any activity of M/s AWIL as an OEM and its Annual Report indicated that its business was coordinated with other group company, wherein its responsibility extended to customer relationship and coordinating customer requirements. I think that is what they did. The bid of M/s AgustaWestland International Ltd., UK, should have been rejected outright as it was not the agency to whom the RFP was issued. But for the logic, purpose and motive best available with the leadership of the then Government, this did not happen. Instead, the relentless push in favour of AWIL continued. In effect, the Government of India was signing an agreement for supply of helicopters with a company that had no OEM capability, which would appear highly irregular. There is also no tangible reason stated for this unusual structure. During the processing of the case, the following deviations from RFP or DPP were approved by the then Raksha Mantri. Now, I come to conduct of field trials abroad. I agree that you initially objected; that is your nature. The CAG Report has highlighted that the Field Evaluation Trial..(Interruptions).. of AW101 of AgustaWestland was conducted on representative helicopters Merlin MK-3A and CIV01 and mock-up of the passenger cabin and not on the actual helicopter, whereas actual S-92 helicopter of Sikorsky was evaluated. Even at the stage of FET, the helicopter offered by AgustaWestland was still in its development phase. DPP mandates that FET must be carried out in all conditions where the equipment is likely to be deployed. RFP has categorically stated that FET would be carried out in India-- this was the specific requirement of RFP-- in varying climates, altitude and terrain conditions, on 'no cost no commitment' basis. (Contd. by PB/4L) PB/4L/6.45 SHRI MANOHAR PARRIKAR (CONTD.): Conduct of trials in India is extremely critical, especially, for helicopters meant to carry VVIPs because the terrain, climate and topographic conditions greatly vary with those of USA and UK. This crucial aspect has been given a go-by by permitting trials in foreign lands. The serious nature of deviations from standard FET conditions for the AW-101 in terms of trials being held outside India and not on the actual helicopter was exacerbated by the fact that even at the time of FET, the Augusta Westland helicopter was in developmental stage. ...(Interruptions)... Mr. Deputy Chairman, Sir, this created some problems when the three helicopters were received and were being put on test trials. I will just read one para from a file of Air Force where the trials were taking place. I will read one para only. I quote, "At Srinagar, 5,400 feet above the sea level, effective payload of this helicopter is nil in OGL configuration at all ranges of temperature. Even in IGE configuration, a reduced payload is to be accepted. The common VVIP sorties to Nehru Helipad cannot be undertaken. Similar is the case of Gulmarg, Pahalgam where VVIP sorties have been flown in the past using Mi-17iv helicopter." This file luckily was saved from a devastating fire which took place on 3rd of June, 2014 which burnt down all the records in that particular office. But this file remained in the drawer of the officer. So, it survived. ...(Interruptions)... This could not be further verified because obviously the helicopter was stopped from testing after that. ...(Interruptions)... Additional commercial quotes sought from both the vendors. Third, acceptance of the partial compliance of the two SQRs in respect of AW-101 non-VIP version helicopter. Neither S-92 nor AW-101 fully complied with SQR in the FET. However, AW-101 was recommended for induction in spite of emerging as a single vendor by waiving off two parameters, while no such concession was granted to S-92. The warranty of 'three years/2000 hours whichever is earlier' on the airframe and 'three years/1200 hours whichever is earlier' on the engine offered by M/s Sikorsky and 'three years/900 hours whichever is earlier' offered on the whole helicopter by M/s AWIL was accepted instead of RFP stipulation of 'three years/900 hours whichever is later'. Acceptance of option clause for three years instead of five years. Inclusion of additional items such as Traffic Collision and Avoidance System, Enhanced Ground Proximity Warning System for all 12 helicopters and Medevac system for 8 VVIP helicopters at CNC stage. ...(Interruptions)... Deletion of Active Missile Approach Warning System, Incorporation of Rear Air Stairs in 04 non-VVIP helicopters. ...(Interruptions)... Completion of helicopter delivery in 39 months instead of 36 months. The accepted principle in procurement is that deviations must be approved only under exceptional circumstances, for robust rationale and exercising extreme caution. ...(Interruptions)... The numerous deviations approved appear to flout this norm, as has also been pointed out by the Comptroller and Auditor General in their report. That CAG Report has highlighted that the allowed offsets were not compliant with DPP and many Indian Offset Partners were not eligible. Augusta Westland gave a year-wise breakup of work from 2011 to 2014 to be executed by IDS Infotech under this offset programme even though the work has been completed well before the conclusion of the contract in 2010. (Contd. by 4m/SKC) SKC/4M/6.50 SHRI MANOHAR PARRIKAR (contd.): Now, this is very important. Investigation in the matter so far revealed involvement of IDS Infotech as a conduit for transfer of bribe money. We have already got court orders on that too. I would explain what action we have taken on that. The benchmark cost arrived by CNC was unreasonably high and had provided no realistic basis for price negotiations. The benchmark cost as worked out by CNC was Euro 727 million, approximately, Rs. 4,877.50 cores, which is six times the estimated total project cost of Rs. 793 crores, in January, 2006, wherein the estimated unit cost of AW-101 – this is very important – was considered as Rs. 100 crore, approximately Euro 15 million, at the time of SOC. When the recommendation was given for acceptance of RFP, this was the price quoted by the Air Force – Rs. 100 crores, that is, Euro 15 million. The CAG Report has stated that the base price of US $ 27 million for the year 2000 was adopted by CNC, while the base price of AW- 101 VIP helicopter was US $ 18.2 million in the year 2010, as seen from the Internet. SHRI ANAND SHARMA: Internet? SHRI MANOHAR PARRIKAR: Even the Air Force has estimated it as 15 million dollars in 2006. It is there on the records. SHRI ANAND SHARMA: What is the date of this document? SHRI MANOHAR PARRIKAR: I am reading from the CAG Report. I would provide whatever clarifications you may need later. ...(Interruptions)... MoF, in their observation on CCS note, stated that they are unable to support the proposal. The Ministry of Finance also asked that a response to the letter of the MP, Shri Nathubhai G. Patel to the CVC may be incorporated in the final CCS note along with MoD’s response thereon. The salient observations of MoF were based on following aspects: Final negotiated price being high as compared to the estimated AoN cost; SQRs not being broad-based; while the proposal of M/s ROE was rejected for want of EMD and Integrity Pact, the other two were considered despite certain features of both proposals not conforming to RFP requirements. The remaining two vendors were allowed to submit additional commercial quotes and later, M/s AWIL was allowed to make corrections in its EMD and Integrity Pact; FET not conducted in Indian conditions. During FET/SE, the helicopter offered from M/s Sikorsky was not accepted due to noncompliance with certain requirements and partial compliance with certain others while the helicopters offered by M/s AWIL were accepted despite partial compliance with certain requirements; and changes to the technical requirements made after opening of price bid and changes to certain terms and conditions of RFP made. Similar concerns were raised by the MP before the CVC, stating that the case is in violation of CVC norms. The CCS approved the proposal for procurement of 12 VVIP and VIP helicopters from Messrs Augusta Westland, UK, in the meeting held on 18th January, 2010, for the following reasons: (i) Augusta Westland helicopters have been selected after multivendor competition bid, for which RFPs have been issued to six vendors, out of which only two vendors responded. (ii) Augusta Westland helicopter was the only helicopter that met the SQRs framed for the VVIP version and the operational requirements of the IAF. The other helicopters participating in the trial did not meet the SQR. (iii) The present fleet of VVIP helicopters will complete their total technical life in the year 2010. SHRI SHANTARAM NAIK: Sir, point of order. ...(Interruptions)... Sir, point of order. ...(Interruptions)... SHRI MANOHAR PARRIKAR: (iv) The RFPs for the present procurement was issued on 27th September, 2006 and any further delay would jeopardize the requirement. ...(Interruptions)... (v) Now that considerable time has elapsed, it is likely that a fresh tender would lead to further escalation of costs. ...(Interruptions)... SHRI SHANTARAM NAIK: Sir, point of order. ...(Interruptions)... Sir, point of order. ...(Interruptions)... SHRI MANOHAR PARRIKAR: The CCS approval for the decision appears predicated primarily on Augusta Westland being the “only helicopter” meeting the SQRs and multiple deviations from the SQRs including shortfalls were approved. ...(Interruptions)... MR. DEPUTY CHAIRMAN: Mr. Shantaram Naik. ...(Interruptions)... What is your point of order? ...(Interruptions)... SHRI SHANTARAM NAIK: Sir, the Defence Minister is not responding to the issues raising by Members. Various issues were raised by each one of us here. No response has been given. He has to reply. ...(Interruptions)... MR. DEPUTY CHAIRMAN: Mr. Anand Sharma, what is the problem? ...(Interruptions)... SHRI ANAND SHARMA: Sir, under Rules 176, 177 and 178, there is a point of order. ...(Interruptions)... (FOLLOWED BY HK/4N) -SKC/HK-AKG/4N/6.55 SHRI ANAND SHARMA (CONTD.): There is a point of order under Rules 176, 177 and 178. When a discussion is raised by the Members, the Minister responds to the Members. ...(Interruptions)... He has come with a prepared speech. ...(Interruptions)... Number two, it has to be circulated. ...(Interruptions

ZL respond R_ _L P[ ...(nZKoXM)... SHRI MANOHAR PARRIKAR: All questions are being responded. ...(Interruptions)... SHRI ANAND SHARMA: Nobody has a copy of it. ...(Interruptions)... He is not responding to what we have asked. ...(Interruptions


SHRI MANOHAR PARRIKAR: ...for the supply of 12 AW-101 VVIP/VIP helicopters with associated engineering package at an aggregated price of Euro 556.262 million ...(Interruptions)... MR. DEPUTY CHAIRMAN: I cannot ask him how he should speak. ...(Interruptions)... But he can read a prepared speech. ...(Interruptions)... SHRI MANOHAR PARRIKAR: In accordance with the payment terms, ...(Interruptions)... 15 per cent of the total contract price ...(Interruptions)...



SHRI MANOHAR PARRIKAR: ...followed by a report of arrest of M/s Finmeccanica Chief, ...(Interruptions)... the action of putting on hold all procurement/acquisition cases in the pipeline with the entire Finmeccanica Group of Companies and other companies figuring in CBI FIR was approved on file by the then RM only on 12.05.2014 towards the fag end of the then Government's tenure. ...(Interruptions)... It was the present Government that finally issued the order on 03.07.2014. ...(Interruptions)... 10 Uncorrected / Not for Publication 04.05.2016 As regards the issue of alleged substantial disregard and extensive delay in providing necessary documents by the Ministry in the Criminal court proceedings at Milan, it is stated that the documents were not in the custody of the MoD but in the custody of CBI before MoD became a civil party to the criminal proceedings at Milan. ...(Interruptions)... MR. DEPUTY CHAIRMAN: Mr. Minister, how many more minutes you want? ...(Interruptions)... How many more minutes... ...(Interruptions)... SHRI MANOHAR PARRIKAR: Another eight to ten minutes, Sir. ...(Interruptions)... MR. DEPUTY CHAIRMAN: Be brief. ...(Interruptions)... Please try to conclude. ...(Interruptions)... SHRI MANOHAR PARRIKAR: Sir, vide its letter dated 12.02.2014, it has executed the LRs received from Italy on 27.01.2014. ...(Interruptions)... MR. DEPUTY CHAIRMAN: Please sit down. If he is misleading, there is a rule for that. ...(Interruptions)... SHRI MANOHAR PARRIKAR: As far as the investigation by the CBI and the ED is concerned, it is strange that the CBI which registered an FIR in the matter on 12th March, 2013, based on the reference made by the 11 Uncorrected / Not for Publication 04.05.2016 Ministry of Defence on 12th February, 2013, did not bother to forward a copy of the FIR to Enforcement Directorate for nine months. ...(Interruptions)... It was only in December, 2013, that is, after a gap of nine months, CBI forwarded the FIR to Enforcement Directorate. (Contd. by SK-4Q) SK-MCM/4Q/7.10 SHRI MANOHAR PARRIKAR (CONTD.): Even more strangely, the Enforcement Directorate did not act on the FIR in July, 2014. ..(Interruptions).. It appears that invincible hand was guiding the actions or inactions by CBI and ED. ..(Interruptions).. SHRI BHUBANESWAR KALITA: Sir, he is misleading the House. ..(Interruptions).. This is a wrong statement. ..(Interruptions).. SHRI MANOHAR PARRIKAR: After the present Government took over, CBI and Enforcement Directorate have been vigorously pursuing all aspects of the investigation ..(Interruptions).. SHRI BHUBANESWAR KALITA: I am on a point of order, Sir. ..(Interruptions).. You have allowed him to read ..(Interruptions).. But he is misleading the House. ..(Interruptions).. 12 Uncorrected / Not for Publication 04.05.2016 MR. DEPUTY CHAIRMAN: If he is misleading, you have the Privilege Motion. ..(Interruptions).. SHRI MANOHAR PARRIKAR: ... including the arrests and/or extradition of three foreign nationals, namely, Mr. Carlo Gerosa, Mr. Guido Haschke and Mr. Christian Michel James. SHRI BHUBANESWAR KALITA: He is only misleading the House, stating the wrong facts. ..(Interruptions).. MR. DEPUTY CHAIRMAN: If the Minister is misleading, the rule is there. ..(Interruptions).. Take up the rules. ..(Interruptions).. Go by the rules. ..(Interruptions).. SHRI MANOHAR PARRIKAR: Red Corner Notices were issued in December, 2015 and January, 2016 ..(Interruptions).. MR. DEPUTY CHAIRMAN: What can I do? ..(Interruptions).. I don’t know whether he is misleading or not. ..(Interruptions).. I don’t know. ..(Interruptions).. SHRI MANOHAR PARRIKAR: Extradition request has also been made for Mr. Christian Michel James. ..(Interruptions).. One of the agencies has arrested an Indian national and attached property worth Rs. 11 13 Uncorrected / Not for Publication 04.05.2016 crores belonging to Indian nationals and Mr. Christian Michel James. ..(Interruptions).. SHRI ANAND SHARMA: Sir, he is contradicting himself, what he informed the Parliament. ..(Interruptions).. And he is being allowed ..(Interruptions).. He is misleading the House. ..(Interruptions).. SHRI MANOHAR PARRIKAR: Pursuant to the judgment of Milan Appellate Court, Ministry of Defence have written to both the ED and the CBI to take into account the contents of the judgment and conclude the investigations expeditiously. ..(Interruptions).. MoD is initiating the process of blacklisting the concerned companies. ..(Interruptions).. SHRI BHUBANESWAR KALITA: Sir, I am on a point of order. ..(Interruptions).. Up to what time are you going to run the House? ..(Interruptions).. You have to take the sense of the House. ..(Interruptions).. It is beyond 6 o'clock. ..(Interruptions).. SHRI MANOHAR PARRIKAR: It is most obvious to the entire nation that M/s AWIL was favoured at every stage. ..(Interruptions).. Even after the conclusion of the contract, when reports of wrong doing and unethical practices started appearing in February, 2012 and thereafter, ..(Interruptions).. 14 Uncorrected / Not for Publication 04.05.2016 SHRI ANAND SHARMA: Sir, after 6 o'clock, you have to take the sense of the House. ..(Interruptions).. When will the Members seek clarifications on the Statement? ..(Interruptions). MR. DEPUTY CHAIRMAN: Mr. Anand Sharma, ..(Interruptions).. SHRI MANOHAR PARRIKAR: It was only after the arrest of Mr. Orsi by Italian Authorities, the matter was referred to CBI for investigation. ..(Interruptions).. SHRI ANAND SHARMA: Sir, at what time will we seek clarifications? ..(Interruptions).. MR. DEPUTY CHAIRMAN: Mr. Anand Sharma, please. ..(Interruptions).. Are you on a point of order? ..(Interruptions).. What is the matter? ..(Interruptions).. He is not yielding. ..(Interruptions).. SHRI ANAND SHARMA: When will we seek the clarifications on this Statement? ..(Interruptions).. SHRI MANOHAR PARRIKAR: Even after handing over the matter to CBI ..(Interruptions).. no concrete action was taken to terminate the contract till January, 2014. ..(Interruptions).. SHRI ANAND SHARMA: Sir, when will the clarifications be sought? ..(Interruptions).. 15 Uncorrected / Not for Publication 04.05.2016 MR. DEPUTY CHAIRMAN: No clarifications. ..(Interruptions).. It is the reply. ..(Interruptions).. SHRI ANAND SHARMA: No, Sir, it is not the reply. ..(Interruptions).. MR. DEPUTY CHAIRMAN: It is the reply. ..(Interruptions).. SHRI MANOHAR PARRIKAR: MoD had no option but to cancel the contract based on legal advice ..(Interruptions).. SHRI BHUBANESWAR KALITA: It is beyond 6 o'clock. ..(Interruptions).. You have to take the sense of the House. ..(Interruptions).. SHRI MANOHAR PARRIKAR: ... on the verge of completion of the 2014 general election. ..(Interruptions).. If the then Government had acted in right earnest and took proactive action immediately after appearance of reports of wrong doing ..(Interruptions).. SHRI PRAMOD TIWARI: Sir, I have a point of order. ..(Interruptions).. I am quoting rule 178. ..(Interruptions).. SHRI MANOHAR PARRIKAR: ... the country would not have been saddled with delivery of three helicopters in December, 2012 and the entire advance payment could have been recovered. ..(Interruptions).. There is an agreement that the corrupt practices were involved in the 16 Uncorrected / Not for Publication 04.05.2016 procurement of the AgustaWestland helicopters. The previoius Government recognized this and approved putting on hold of the group in May, 2014 and the present Government passed the order. ..(Interruptions).. The Italian court judgement also unequivocally accepts and on that basis has passed jail sentences against involved individuals that the deal involved bribery and corruption. The Italian court judgement has outlined the payment of bribes to decision makers in India, in the bureaucracy, political establishment and the Air Force. The text of the judgement also makes reference to various individuals such as Tyagi family as well as some bureaucrats. ..(Interruptions).. SHRI PRAMOD TIWARI: Sir, my point of order is on Rule 178. ..(Interruptions).. SHRI MANOHAR PARRIKAR: The central matter in this issue is that of corrupt practices. Hence the main action required is to trace, detect and unmask the means of these corrupt practices and bribery through a thorough enquiry and investigation by agencies. SHRI V. HANUMANTHA RAO: What he wants to say, nobody understands. ..(Interruptions).. 17 Uncorrected / Not for Publication 04.05.2016 SHRI MANOHAR PARRIKAR: Given the above background, this inquiry will necessarily focus on the roles of those named in the judgement of the Italian court. ..(Interruptions).. It is also important for ensuring a comprehensive investigation that any individuals with involvement in the AgustaWestland deal, even in tertiary manner, are removed from any direct or indirect role in investigation. ..(Interruptions).. SHRI PRAMOD TIWARI: Sir, my point of order is on Rule 178. ..(Interruptions).. SHRI MANOHAR PARRIKAR: The Government will leave no stone unturned to bring to justice those that have committed this corrupt act against our national interest. Kiska ka 4 inch ka bamboo cut ho gaya , wo samajh gaya. 

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