Collateral damage: India puts Rs. 3,000-cr agreement on hold

The allegations of kickbacks in the R3,760-crore VVIP helicopter deal with Italian defence group Finmeccanica subsidiary AgustaWestland seem to have had certain peculiar side-effects.

A day after defence minister AK Antony ordered a CBI probe into the VVIP chopper contract, India on Wednesday put on hold a Rs. 3,000-crore deal to equip its armed forces with 197 reconnaissance and surveillance helicopters (RSH).

It was found during the course of Italian investigations into the controversial VVIP helicopter deal that some serving and retired Indian military officers had offered to help swing the RSH deal in favour of AgustaWestland.

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However, the firm was knocked out of the competition in the early stages of the process.

Defence ministry sources, however, said the defence acquisition council - headed by Antony - did not discuss the proposed RSH procurement as army chief General Bikram Singh was on an official tour to Japan.

Eurocopter's AS 350 Fennec and Russian Kamov 226 had been shortlisted for the tender. Highly placed sources said the tender could be scrapped.

The proposal to purchase RSH had come under the scanner due to some technical deviations from the tendering process.

Antony had said at the Aero India-2013 show last week that the DAC would decide the future of the proposed acquisition.