Two ministries of the austerity-conscious Congress-led United Progressive Alliance Government are locked in an argument over the right price to pay for the purchase of 12 helicopters to ferry VIPs.
The Defence Ministry has almost finalised a deal to buy the helicopters for Rs 3,600 crore from Italian aviation company Agusta Westland but the Finance Ministry has objected to the price.
The Finance Ministry’s dissenting note says that the price of approximately Rs 300 crore for one helicopter
-- Rs 3,600 crore for 12 -- is way too expensive.
The planned outlay for this purchase when it was given an approval was just Rs 1,400 crore.
The Finance Ministry is also not convinced how the Defence Ministry narrowed the selection to a single vendor.
Another red flag is a letter written by the MP from Daman to the Central Vigilance Commission and the Prime Minister’s Office alleging that technical parameters were diluted to push for the contract.
The two ministries have been communicating with each other about the helicopters for five months.
CNN-IBN learns the Defence Ministry is pushing for acquiring the helicopters though each costs as much as a frontline fighter aircraft.
If the VIP chopper deal comes through, this would be the third such purchase.
The Government has already decided to buy five Embraer jets and a deal for three Boeing Luxury jets is being prepared.
US President Barack Obama’s administration scrapped a plan to purchase presidential helicopters as an austerity measure.
The Indian government should perhaps make a note.