As FM, Pranab Mukherjee opposed changes in the AgustaWestland deal

During his tenure as the finance minister, President Pranab Mukherjee had, in 2009, raised some objections to the VVIP chopper deal, questioning the need to include new parameters after the Request For Proposal stage, which resulted in a cost escalation of over Rs 600 crore for the AgustaWestland helicopters.

The parameters of the deal were altered sometime in early 2009 to include Traffic Collusion Avoidance System (TCAS II) and Enhanced Ground Proximity Warning System for the 12 helicopters as well as Medevac system in eight VVIP helicopters. These changes were done following recommendations by the Air Headquarters and the SPG.

According to sources, Mukherjee cleared a three-page note from the Finance Ministry to the Defence Ministry, in which 18 points of objections were raised, that included a mention of the new parameters. The Indian Express had in August 2009 reported on the differences between the Finance and Defence ministries on the purchase of AgustaWestland helicopters. Mukherjee headed the Finance Ministry from January 2009 to June 2012.

According to sources, the Finance Ministry's key contention was that if the inclusion of systems like TCAS II and EGPWS were necessary for the VVIP helicopters, they should have been made part of the parameters during the RFP stage. There was no clear explanation on why the changes were necessary almost three years after the RFP was signed, the note said, according to sources familiar with it. Sources said that the Defence Ministry, in its reply, responded to only two objections raised. In a second note, the Finance Ministry pointed out that most of its reservations were unanswered. The issue was forwarded to the Cabinet Committee on Security on January 18, 2010, where it was cleared.

When the Defence Acquisition Council on January 3, 2006 approved the Acceptance of Necessity, which says the purchase of the VVIP helicopters are mandatory, it was Mukherjee who headed the Defence Ministry.

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