Chhattisgarh Govt paid extra Rs.65 lakh to buy Agusta Westland Helicopter

 Chhattisgarh Govt paid extra Rs.65 lakh to buy AgustaWestland copter  Even as the nation is embroiled in the Agusta Westland Helicopter scam, the Comptroller and Auditor General, in its latest report, has indicted the Chhattisgarh government for overpaying Rs.65 lakh for the purchase of a VVIP chopper of the same brand. Chhattisgarh purchased Agusta A-109 Power helicopter, used for commercial, government and military purposes, in December 2007 for Rs.25.96 crore. Around the same time, the Jharkhand government paid just Rs.24 crore to buy the same model chopper.

When Chhattisgarh was carved out from Madhya Pradesh in 2000, it was given a Super King Air B200 aircraft. Within a year, it bought a new Eurocopter EC135 to complete its fleet for VIP use. Four years later, it bought a new King Air B200 for Rs.23.88 crore after selling the old aircraft for Rs.6.70 crore. In 2007, the state's aviation department felt it needed one more chopper for the VIPs, thanks to the growing Naxal menace.

Like the Union government, it zeroed in on Agusta  Westland helicopter for VIP use. To explore options for procuring a new copter, the government set up a committee, comprising the principal secretary to the chief minister and the finance secretary, under the chairmanship of the additional chief secretary, who was in charge of the aviation department. Instead of calling open tenders according to Store Purchase Rules, the committee approached the cabinet to grant  relaxation from calling a global tender on the ground that the helicopter was a specialised product''. The cabinet authorised the committee to negotiate with the Hong Kong-based dealer Sharp Ocean Investment Ltd and its India representative, OSS Air Management. The company quoted $63.15 lakh as supply price of the helicopter, including a premium of $2 lakh. The government paid $35.97 lakh as advance, and after negotiation, the dealer agreed to waive the premium and sell the chopper for $61.25 lakh (Rs.25.31 crore) provided the purchase contract was signed before March 29, 2007. But as the government failed to sign the agreement before the due date, the company refused to sell the chopper. It, however, returned the advance.

According to the CAG report, “having failed to sign the contract by the due date, the government had by this time (in May 2007) floated global tender for the purchase of the VVIP helicopter. Out of the five bids received, the cabinet approved the bid of the same Hong Kong-based dealer, who had offered to supply the helicopter earlier, and signed the agreement for $65.70 lakh (Rs.25.96 crore)''.The government purchased the same helicopter model from the same dealer at an extra cost of Rs.65 lakh. In its reply to the auditors, the Chhattisgarh government, in May 2011, said, “Before signing the contract, the government wanted the company to bring down the price to $55.91 lakh (Rs.24 crore at the exchange rate prevailing in 2005-06). Since the company did not agree to that price, global tenders were floated to maintain transparency.''This reply, however, did not cut ice with the CAG. “The state government's reply is not acceptable as the government failed to finalise the first offer in time,â€￾ the CAG report pointed out. “Further, at the first instance, relaxation from calling global tender was granted on the ground that the helicopter was a specialised product. Then, calling tender for a particular brand and model would not have in any case increased participation, and therefore was not justified. Thus, purchasing the same brand and model of helicopter from the same dealer at a higher price led to extra expenditure.''In excessWhat?The CAG has indicted the Chhattisgarh government for paying Rs.65 lakh extra to Hong Kong-based dealer Sharp Ocean Investment Ltd for the purchase of Agusta A-109 Power helicopter in December 2007.How?* The government's negotiating committee did not call for a global tender.* The dealer in Hong Kong agreed to sell the chopper for Rs.25.31 crore, the offer being valid only till March 29, 2007.* The government failed to sign the contract on the due date.* The government then floated a global tender in May 2007. * Of the five bids, the cabinet approved the bid by the same dealer in Hong Kong and paid Rs.25.96 crore.