 "CAG faults high costs in AgustaWestland chopper deal")
The CAG today slammed the Defence Ministry and Air Force for "several instances" of deviation from rules in the procurement of VVIP choppers in the Rs 3,727 crore AgustaWestland deal.
In its report tabled in Parliament, the Comptroller and Auditor General also questioned the decision of the then IAF chief to hold the trials of the two contenders for the deal abroad.
The CAG also noted that the benchmark cost of Rs 4,871.5 crore for the 12 VVIP choppers was "unreasonably high" as compared to the Rs 3,966 crore quoted by AgustaWestland.
As per the DPP, a reasonable price is benchmarked by the Contract Negotiation Committee (CNC) while proceeding with a deal.
But the benchmark price of Rs 4,871 crore arrived at by CNC was "unreasonably high as it had provided no realistic basis for comparison with the offered cost of Rs 3,966 crore (by AgustaWestland) for price negotiations," the report said.
The report added that while an approval for deviation was required to be pursued with "extreme caution and in exceptional circumstances", the frequent deviations made in this case are counter to the clauses of the DPP 2006.
The CAG also criticised the procurement of four additional choppers in the deal at a cost of Rs 1,240 crore as "avoidable" and said that the assessed requirement was not commensurate with the low utilisation levels of existing helicopters providing transportation to VVIPs.
In its report tabled in Parliament, the Comptroller and Auditor General also questioned the decision of the then IAF chief to hold the trials of the two contenders for the deal abroad.
The CAG also noted that the benchmark cost of Rs 4,871.5 crore for the 12 VVIP choppers was "unreasonably high" as compared to the Rs 3,966 crore quoted by AgustaWestland.
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"Several instances have been observed where the Defence Ministry deviated from the 2006 Defence Procurement Procedure and the tender for the deal issued in Sept. 2006," the report stated.
As per the DPP, a reasonable price is benchmarked by the Contract Negotiation Committee (CNC) while proceeding with a deal.
But the benchmark price of Rs 4,871 crore arrived at by CNC was "unreasonably high as it had provided no realistic basis for comparison with the offered cost of Rs 3,966 crore (by AgustaWestland) for price negotiations," the report said.
The report added that while an approval for deviation was required to be pursued with "extreme caution and in exceptional circumstances", the frequent deviations made in this case are counter to the clauses of the DPP 2006.
The CAG also criticised the procurement of four additional choppers in the deal at a cost of Rs 1,240 crore as "avoidable" and said that the assessed requirement was not commensurate with the low utilisation levels of existing helicopters providing transportation to VVIPs.