The disgrace of Giuseppe Orsi, the enigmatic chief of Italian defence contractor Finmeccanica, has a hitherto unreported angle, the company’s joint venture in India. 

Particularly, because the JV partner is no less than Tata Sons, who pride reputation over everything else.

The story of the JV began in 2009 when Orsi, arrested Tuesday under global archlights, and Ratan Tata announced a final assembly line for the AW119 helicopter. This wasn’t a one-off trading foray. It envisaged a move over in the complete final assembly, completion and delivery of that particular model from AgustaWestland to the JV in India.

Please visit Finmeccanica statement on the subject dated 2.12.2009:

http://www.finmeccanica.it/Corporate/EN/Corporate/
Press_and_Media/Comunicati_stampa/args/detail/
details~press~Comunicati_Stampa~2009~
press_dettaglio_00118.shtml/title/AgustaWestland%20and%20
Tata%20Sons%20sign%20Memorandum%20of%
20Understanding%20for%20AW119%20helicopter%
20final%20assembly%
20in%20India///index.sdo

The relationship ramped up rather quickly and a shareholder’s agreement was announced between Orsi and RatanTata on 16.2.2010. Please see:

http://www.agustawestland.com/news/agustawestland-and-tata-sons-establish-joint-venture-company

The Tatas put in the requisite effort and invested considerable monies in Indian Rotorcraft, the name given to the JV, to be located out of GM Rao’s Hyderabad SEZ:

http://www.tata.in/media/reports/inside.aspx?artid=8Faqs0G41h8=

The logical corollary was a ground-breaking ceremony. The venue naturally was the Hyderabad SEZ and Rao played host. Details:

http://www.agustawestland.com/news/indian-rotorcraft-holds-ground-breaking-ceremony-new-helicopter-production-facility-hyderabad

Fresh from the JV signing ceremony of 16.2.2010, Orsion 11.2.2010 reported a stirring success, the award of a Euro 560 million Indian Air Force order, presently under cloud.

Here he inexplicably made a mention of Ratan Tata: “This significant order by the Indian Air Force to meet its government transport helicopter requirement confirms the correct vision and strategy of AgustaWestland in India. Several years ago we identified India as one of the pillars of our expansion strategy, from both the market and the industrial points of view. Today we have a significant and growing presence in both the military and commercial markets. Additionally we now have strong industrial relations with Tata Son, with whom we have established a Joint Venture initially for the production of the AW119 Koala but soon this will become a wider platform for our growth in the region. The particularly good personal relations with Ratan Tata, who recently visited AgustaWestland at Cascina Costa, will further enhance the joint commitment to the expansion of the helicopter industry in India to satisfy various requirements which are estimated to be valued at €5-6 billion in the short to medium term.” Link: 

http://www.agustawestland.com/news/indian-air-force-signs-560-million-contract-12-aw101-helicopters-strengthening-agustawestland

So, key questions emerge:

1. Pending the enquiry, would defence minister AK Antony slap applicability of the “Integrity Pact” to blacklist AgustaWestland, or will he cover the entire Finmeccanica group?

2. Will a blacklist include contracts still in service with the Indian Navy and other government agencies?

3. In any event, will the shadow fall on Indian Rotorcraft, the AgustaWestland-Tata Sons JV, even though the company has had no direct bearing on the Indian Air Force (IAF) order? In case there is collateral damage, what legal recourse would the JV have?

4. What happens to monies that Antony has no doubt paid for the next three deliveries the IAF expected in the next few weeks? Will the Italians refund?

5. Finally, what of the three choppers whose deliveries have been made? Will they continue to receive sales and support back up? Or will they just remain grounded, the money sunk in them pending a hefty legal recovery notice to Orsi and his employers?

Anecdotal footnote on AgustusWestland in India:

1971: The initial batch of Sea King helicopters to the Indian Navy for anti-submarine warfare. AgustaWestland continues to provide support, training and upgrade services to the Indian Navy for its fleet of Sea King helicopters. 

In 2005 AgustaWestland sold its first AW109 Power helicopter to the Government of Rajasthan and since then sales of its civil product range have taken-off with orders being placed for over 30 aircraft including additional AW109 Powers, the new Grand light twin engine helicopter, the AW119Ke single engine and the AW139 medium twin. 

In the commercial market, AgustaWestland’s authorized distributor, Sharp Ocean, got orders for two VIP-configured Grand New light twins and one AW119Ke, marking the entrance of the state-of-the-art Grand New type in India.

For customer service and support, OSS Air Management Pvt.Ltd and Air Works India Engineering Pvt.Ltd, began service and support.

The AW119 was also the AgustaWestland contender for the Defence Ministry’s Reconnaissance and Surveillance Helicopter (RSH) programme. AAW119 demonstrator conducted a series of demonstrations to the Armed Forces as part of the evaluation. The company claimed outstanding capabilities operating at altitudes in excess of 6,000 m in the Himalayas and hot environmental conditions, plus capability to bolster additional Army, Navy, Air Force and Coast Guard helicopter requirements for light observation, anti-surface and anti-submarine warfare, combat, border and coastal patrol duties, “a potential market worth approximately €5-6 billion for over 600 military helicopters in India in the next ten years.” But the RSH tender is considered as good as dead.

The company’s websites say the choppers are also in service with the Indian Navy. “All the current?commercial range products such as the AW119, the AW109 Power, the Grand and the AW139 have?achieved a relevant success in India in just four years with orders for more than 20 units.?VIP/Corporate transport and Offshore transport are included among the operational applications?performed by these latest models,” the websites inform.