India's ministry of defence has stepped up the pressure on embattled AgustaWestland with the issuance of a final show cause notice, which could lead to the cancellation of the contract for 12 AW101s that has proved so troublesome for the helicopter manufacturer.
So far the Indian air force has received three of the VVIP aircraft, with the remainder in various stages of completion at AgustaWestland's Yeovil, UK plant. The manufacturer has, however, received around 60% of the total payments on the €556 million ($767 million) deal.
India’s MoD has accused the Anglo-Italian manufacturer of “violating the terms of the pre-integrity pact and the contract for procurement of 12 VVIP choppers". As such, bribery investigations are ongoing in both Italy and India.
The airframer confirms receipt of the notice, which gives it 21 days to explain why “all or any action as prescribed, including cancellation of the contract, should not be taken against them”.
AgustaWestland says: “With reference to the Indian AW101 VVIP programme, AgustaWestland confirms it has received a show cause notice letter with a further request for information from the relevant Indian authorities, and is carefully analysing the request. The company wishes to underline the quality of the aircraft themselves is not in question.”
In October the company called for arbitration between the two parties in the hope of resolving the contract impasse, describing the move as a "last resort". It has in the meantime been aggressively marketing the AW101, displaying one of the Indian helicopters at several air shows.
Indian air force chief NAK Browne has called on New Delhi to take an early decision on the helicopters, which are to be used to transport India’s prime minister and president, as the Mil Mi-8 helicopters currently performing the VVIP transport mission are due to be phased out next year.