Analysis

Augusta Westland Corruption

Why Government Must Cancel Deal!

Recently the cabinet was in two minds whether or not to cancel the Augusta Westland helicopter deal in which serious corruption allegations have surfaced. Reportedly the Defence Ministry favoured cancellation while the Ministry of External Affairs was against it. Official sources even leaked to the media that Defence Minister Mr. AK Antony was threatening to resign. Subsequently Mr. Antony turned turtle and said that he would not resign but perform his duty as the Minister. He echoed the Prime Minister to assert that there was nothing to hide and he would face any debate in parliament. It matters little which side in the cabinet relented. What needs to be seen is what happens to the helicopter deal.

Experts have strenuously opined that the deal must not be canceled because that would further harm procurements that affect national security.

An opposite view may be considered.

Only if the deal is actually threatened would the international mafia see the writing on the wall. Only then would it expose the Indian collaborators, no matter how highly placed, in order to obtain its pound of flesh.

In the long term would it not be better to cleanse once and for all the system operated by a murky mafia that has monopolized not only defence contracts but all deals involving procurement from abroad? Reform is required in order to legitimize consultants allowed payment for services rendered in totally transparent fashion. Instead of paying commission that is a percentage of the contract it might be better to pay them a fixed fee negotiated at the outset. That would not create an incentive to enhance the quantum of the contract. One fee might be fixed for ongoing services and the remaining if the contract is obtained.

It is necessary to clean up the system if India is at all serious of expanding future trade. Mr. Antony therefore should not be deflected from his first impulse to cancel the deal. Instead of outright cancellation the government can put the decision on hold until preconditions are met.

Readers might recall that months before the arrest of the Italians connected to the deal this writer had demanded last October:

“There is one thing that the Indian government can do, and must do. It should cancel the contract with the Augusta Westland Company. After full information related to the case is made available the contract can be revived or renegotiated as events might dictate. The indemnity or penalty clause of the signed contract can be invoked by the government if necessary. In light of the information already available this is the least that the Defence Ministry must insist.”

I venture to suggest that had the government acted then the arrests in Italy would have occurred much earlier.

British Prime Minister Mr. David Cameron’s concerns are legitimate. Although the Augusta Westland Company operates in Britain it is owned by Italians. British concerns are related to continuance of the company’s operations in order to perpetuate employment of British workers who are doing a commendable job. The employment situation in Britain is critical. The Indian government should appreciate this and tell the Brits:

“Fine, we will not cancel the contract if you can ensure that the whole and credible truth regarding all the Indian recipients of kickbacks is revealed to us.”

Mr. Cameron if he puts his mind to it has enough leverage with Italy to deliver this. If Britain and India are to expand a mutually satisfying commercial and cultural partnership in the years ahead this must be done for sake of both nations.

Would the serious threat of cancellation work? I believe it would. Only if the deal is actually threatened would the international mafia see the writing on the wall. Only then would it expose the Indian collaborators, no matter how highly placed, in order to obtain its pound of flesh. Remember, kickbacks have already been paid. The mafia would not tolerate losing the deal altogether after paying the bribes. That is how hard headed members of the corruption mafia operate.
  

20-Feb-2013

More by :  Dr. Rajinder Puri

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