The CAG has submitted its report on AgustaWestland chopper deal in which the government auditor is understood to have raised questions over various aspects of the deal, including conduct of trials outside the country despite the Defence Ministry rejecting such a proposal twice.
The report on the Rs 3,600 crore deal for 12 VVIP choppers was finalised during the tenure of former CAG Vinod Rai and was submitted on April 25, over a month before incumbent Shashi Kant Sharma took over, sources told PTI.
In its report, the CAG is understood to have raised questions over holding trials of the two helicopter vendors -- American Sikorsky and Anglo-Italian AgustaWestland -- outside the country, the sources said.
The auditor is believed to have noted that the trials should have been held in India since the helicopters to be procured were to be operated within the country.
In this context, the Comptroller and Auditor General has referred to the rejection of the proposal for conducting trials outside the country twice earlier by Defence Ministry.
The Defence Procurement Board (DPB), headed by the then Defence Secretary, had returned the IAF file recommending the trials to be held in foreign countries.
However, the IAF continued to insist on holding the trials outside the country, prompting the DPB to clear the proposal.
After that, Defence Minister A K Antony also raised objections over the trials being held outside the country but gave his consent later on the continued insistence of the IAF.
The trials of AgustaWestland helicopter were carried out in the UK while the Sikorsky chopper was tested in the US from 16 January 2008 to February 2008.
Antony and the Ministry seemed to be of the view that operational conditions in the UK and the US could not match those in India which included hot deserts, humid plains and high altitude areas such as the Siachen Glacier and the Ladakh region, they said.
The report is also believed to have mentioned the questions raised by the then Defence Minister Pranab Mukherjee over increasing the number of required choppers from eight to 12.
But the ministry finally agreed after then National Security Adviser M K Narayanan stated that more choppers were required for ferrying VVIPs, after consulting the Special Protection Group and the IAF.
The CBI is currently investigating corruption allegations into the alleged Rs 362 crore scam after the arrest of two former CEOs of Finmeccanica and AgustaWestland by the Italian authorities there.
India has already received three of the 12 helicopters for which the deal was struck in 2010 for Rs 3,600 crore.
After the scam broke out, Antony had said that India can "get its money back even at this stage".
He had said, "If the Indian government paid any amount of the money, as per the provisions of the integrity pact, we can get back the entire money we paid to the vendor."
The Indian government has also become a party to the ongoing trials in the case in Italy and has told the court there that its order in the case would not be binding on it and it will reserve the right to seek legal remedies available to it under the Indian Constitution.