Tata-Westland proposal to assemble choppers gets FIPB nod

Anglo-Italian company Augusta Westland, which is facing corruption charges over its now frozen contract for supply of 12 AW-101 VVIP choppers to the IAF, has been allowed to assemble AW119Kx helicopters in a joint venture with Tata Sons in India.

Augusta Westland, a unit of Italian group Finmeccanica, is facing criminal probe both in Italy and India over allegations that two top officials of the company were involved in payment of Rs360 crore as bribe for clinching the Indian contract.

The Foreign Investment Promotion Board (FIPB), at its meeting on 19 September, approved the proposal of Indian Rotorcraft, a joint venture between Tata Sons and Augusta Westland, to manufacture AW119Kx helicopters in India.

The Tata Group has a majority stake of 74 per cent in the venture while Westland holds the remaining 26 per cent.

Indian Rotorcraft will assemble AW119Kx helicopters, an upgraded version of AW119Ke chopper, in India and the joint venture expects to commence operations in March 2014.

While clearing the joint venture proposal, the FIPB observed, "the issue which was being investigated related to helicopter model AW101 and not this proposal."

The FIPB observed that the joint venture proposal is unconnected to any existing or future civil or criminal proceedings against the Italian group.

The proposal will now be placed before the finance minister for a final nod.

Meanwhile, the contract for the supply of 12 VVIP helicopters to the Indian Air Force stand frozen for violating the terms of the contract/

The defence ministry had, on 21 October, issued a final show-cause notice to Augusta Westland for violating the terms of the contract and asked the Anglo Italian firm to explain why "all or any action as prescribed, including cancellation of the contract, should not be taken against them for violating the terms of the pre-integrity pact and the contract for procurement of 12 VVIP choppers".