Chopper firm puts up brave face, says deal not scrapped

A day after the defence ministry said it had "initiated action for cancellation of contract" in the VVIP chopper deal, Italian helicopter firm AgustaWestland remained defiant on Saturday, saying it is confident that "the good conduct" of its executives will come to light as far as the contract is concerned.

The manufacturer also claimed that the defence ministry has not cancelled the Rs 3546-crore contract for 12 choppers, but has only sought information on the recent investigations.

"As for media reports alleging that Indian authorities have cancelled the VVIP helicopters contract, AgustaWestland clarifies that the Indian ministry of defence has not cancelled the contract but has given notice requesting information within seven days. AgustaWestland is preparing its answers to timely meet the Indian ministry of defence's request," said a statement issued by the company today.

However, the defence ministry's statement on Friday clearly stated that the contract is being terminated. In the statement titled "MoD begins process of cancellation of AgustaWestland helicopter contract", the defence ministry said the firm has been put on a seven-day notice after which the contract will be terminated.

Reacting to the statement by the helicopter manufacturer today, defence ministry officials said the government's position is very clear and the process has been initiated to cancel the contract and recover the money that has already been paid.

"The government position could not be clearer. It has been stated that all payments that were being made to the company have been stopped. Also, a formal decision has been taken to terminate the contract. The seven-day notice is part of the procedure," said an official.

Sources said the process for recovery of the money that has already been paid by India would also begin after a formal cancellation of the contract for violation of the integrity pact that is very strict on the payment of bribes or commissions to middlemen. IAF personnel who are currently training in the UK to fly and maintain the choppers will also be called back shortly, while the three delivered choppers will be returned to the company.

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