Il Indian government has decided to cancel the 560 million euro order for 12 AW101 helicopters from AgustaWestland, a company of the Finmeccanica group. This was reported by the Indian newspaper "The Economic Times", stating that the decision is destined to jeopardize the outcome of a meeting scheduled for tomorrow between Indian defense ministry officials and representatives of the Italian company.
A ministerial source confirmed that he believed it impossible that the AgustaWestland managers could save the contract: "Tomorrow's meeting is just an attempt to save face, but the Government has already decided to cancel the contract because its 'integrity".
After the news spread, Finmeccanica's stock on the Stock Exchange accelerated downwards, losing more than one and a half percentage points. If officially confirmed, the decision to cancel the contract will reopen the tendering game in favor of other manufacturers, including Sikorsky Aircraft, EADS, Eurocopter and Lockheed Martin.
In recent months the same order had been the focus of a scandal linked to allegations of corruption. The story has created a lot of embarrassment for the Indian government in view of the elections, as well as putting the former number of Finmeccanica, Giuseppe Orsi, in prison some time ago. The group controlled by the Treasury has always denied any irregularity in the procedure for awarding the contract.
At the beginning of the year, India froze the contract and on 23 October the New Delhi Ministry of Defense sent AgustaWestland a note announcing its intention to cancel it. Last month the Italian company had requested arbitration on the case, but Indian Defense Ministry sources say it is not possible because the company would have violated the integrity of the contract. However, from a legal point of view, the case is still expected to be brought before Indian justice.
On 8 November, during the conference call with analysts on the quarterly results, the CEO of Finmeccanica, Alexander Pansa, had said that at present the matter would not have had "financial consequences" for the group, specifying that three AW101 helicopters initially built for the contract "have already been sold to other customers".
