AgustaWestland issue: Company threatens to reconsider ongoing projects

Stung by India initiating process of blacklisting it, AgustaWestland VVIP chopper scam-tainted Italy’s Finmeccanica, has warned that it may ‘assess’ its ongoing projects of supplying components and essential services if ‘agreeable and transparent solution’ to current uncertainty was not found.

Stung by India initiating process of blacklisting it, AgustaWestland VVIP chopper scam-tainted Italy’s Finmeccanica, has warned that it may ‘assess’ its ongoing projects of supplying components and essential services if ‘agreeable and transparent solution’ to current uncertainty was not found.

The new Finmeccanica's logo, Leonardo, is seen on a screen during a meeting of shareholders in Rome, Italy, April 24, 2016.(Reuters)

In a statement, Leonardo-Finmeccanica also said that its business to India was “very marginal” and said “despite the context of uncertainty”, the company “in the spirit of cooperation”, has over the past few years continued to supply components and services essential to ensuring the operation of platforms and equipment for the Indian armed forces.

Finmeccanica is a major player in the Indian defence market. From 127 mm guns to the 76 mm guns on various naval ships and spare parts for Seahawk helicopters to radars on several ships and helicopters, the group has a huge presence.

Terming India as an “interesting market” for it, the company hoped that “an agreed and transparent solution” was found as soon as possible, in order to shed light on current initiatives and future business opportunities.

“Should this not be the case, the company will not refrain from assessing the situation given the limited size of the ongoing business in the country,” it said.

Defence minister Manohar Parrikar had said the government has decided to cancel all ongoing tenders for defence equipment won by Finmeccanica as a precursor to blacklisting of the firm, which is being investigated for bribery in the AgustaWestland VVIP helicopter deal.

“Wherever there is capital procurement of Finmeccanica and their subsidiaries, all Requests for Proposal [RFP] will be closed. I am very clear,” he had said.

Parrikar clarified that only fresh capital acquisition was being cancelled and the firm would continue to conduct annual maintenance and supply spare parts for defence supplies already acquired.

The company in the statement said it acknowledges the statements made by Parrikar even though to date it has not received any official communication from the delegated government authorities.

It said the exposure of company’s business to India is very marginal, since over the past few years no new orders coming from the country have been included in Leonardo- Finmeccanica’s budget forecast.

In particular, the contract for the supply of torpedoes, being cancelled by India, was never formally signed and therefore never included in Leonardo-Finmeccanica’s backlog, it said.