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Reproduced from my blog at AgustaWestland Bribery Scandal - Timeline & Factual AnalysisQ: What is AgustaWestland?AgustaWestland(AW) was formed in 2000 as a merger of Agusta(Finmeccanica's subsidiary) & Westland Helicoptors(GKN's subsidiary). Agusta specialised in making commercial choppers while Westland was the only company manufacturing UK's military choppers. The two companies help merger talks while developing EH-101(aka AW-101), a military cum civil chopper, amidst the consolidation phase of Europe's aerospace and defense industry. The rationale of the merger was not exploiting synergies or cost-cutting but producing newer products used for both civil and military purposes as well as leveraging each other's geographical influence. GKN bought out its share in 2004 leaving Agusta as the sole owner.Q:Why were the choppers needed? What's the background?It was perceived that Mil Mi-8s, the existing choppers in until 2000, would become obsolete due to major operational constraints such as inability to operate efficiently during night time and adverse weather conditions. Also, after the 1999 Kargil war, it was required that choppers be procured which could operate at a height of 6000 meters(Siachen Glacier) and could also be used for transporting VVIPS since Mi-8s weren't that comfortable.Q:What was the criteria to select the choppers? Why were AW-101 selected over its competition?A Request For Proposal(RFP) with the above requirements was floated to 12 vendors out of which 4 responded and the IAF's technical evaluation committee shortlisted 3 including EH-101 of AW. But since EH-101 was not yet certified to fly at 6000 m, it didn't participate in the further flight evaluation round. The Russian helicopter Mi-172 could not comply with 7 mandatory Operational Requirements (ORs). That left only Eurocopter's EC-225 as the default choice and IAF's report was sent to PMO in the latter part of 2003. Then Brajesh Mishra, NSA to then PM Atal Bihari Vajpayee, asked the SPG, responsible for VVIPs protection, for its comments. The SPG apparently said the EC-225 was unsuitable because its cabin height was too short (at 1.39 metres) and that neither the VVIPs nor the SPG personnel would be able to stand upright inside such a cabin. Mishra then asked the then Air Chief Marshal to broaden the competition and consider SPG's concerns. The new specifications being considered suggested the helicopters must be able to fly at an altitude of 4500 meters(same as Mi-8s) since the PM & President rarely traveled at bigger heights and that its cabin must be at least 1.80 m in height. But, in January 2004, the Air Force insisted on keeping height at 6ooo m as anything less would cut off VVIP helicopters from traveling from Leh valley to Srinagar which involves crossing Zoji La Pass as well as the Siachen glacier. This view changed when Air Field Marshal SP Tyagi became the chief and agreed to the reduced height norm. Also, the quantity of helicopters proposed for procurement was revised from 8 to 12 helicopters by adding 4 helicopters in non-VIP configuration for security reasons. It was not until 2006 that a fresh RFP, with the same specifications, was issued under UPA-1 to six vendors. Three companies -- the makers of Mi-172, Sikorsky which made the S-92 helicopters and AW-101 -- responded to the RFP. Meanwhile, the defense ministry put in place a new concept -- the Defense Procurement Procedure. Under this, all companies that bid for contracts above Rs 1 billion have to sign an integrity pact that binds the companies to give an undertaking that no bribes would be paid or that agents would be used in the contracts. The Russian company that manufacturers the Mi-172 withdrew from the competition at an early stage refusing to sign the integrity contract. That left AW and Sikorsky in the race. According to IAF sources, the S-92 was found to be non-compliant on four counts:It could not reach 15,000 feet without maximum power.Its 'hover out off ground effect' was insufficient.Its drift down altitude did not meet the requirement.Its missile airborne warning system was not up to the mark.AW, with its three engines, was a bonus, according to IAF test pilots since one engine failure still meant it had two engines to fall back upon. Sometime in 2009, Air HQ sent its recommendation to the defense ministry and after going through stringent financial and technical requirements, a contract was signed in February 2010.Q:How do the various choppers compare? Which one should have been selected ideally?HOGE - The height at which the helicopter can fly in open air. HOGE = Hover Out of Ground Effect. As altitude increases, the air becomes thinner and at a point the machine will no longer be able to produce enough lift to support its weight.HIGE - Maximum height (measured in feet) at which the helicopter can fly over a surface. Flying near the ground requires less power to lift the machine.A HIGE altitude ceiling of 12,000 feet and a HOGE altitude ceiling of 10,000 feet means that a skilled pilot could fly over a 12,000 foot peak while keeping the helicopter close to the ground.Range - This is the distance that the helicopter is able to travel on a single tank of fuel.As you could see, AW-101, although expensive to procure and run, trumps other choppers on most of the counts. But that doesn't make it the right buy. We required VVIP choppers for high altitude areas(~6000m) and AW-101 doesn't do that job howsoever superior it might be performance-wise.One thing to note here is - IAF, in its evaluation report said that S-92's HOGE was insufficient. But data shows that it's(6500 ft) much better than AW-101's(3500 ft). Higher HIGE & HOGE are desired if the intended purpose of the chopper is to operate in high altitude areas. On these counts, S-92 would have been a better buy.Q:What does CAG have to say about it?PFB the CAG report's findings and my comments:The CAG report points out that the lowering of the altitude requirement(4500 meters) was against the operational requirement(6000 meters) of the procured helicopters, especially in many areas of the north and north east of India. In addition, the single vendor situation remained even after lowering the altitude requirement, because of which the AW-101 of AgustaWestland was selected.Comments - While it's true that the operational requirement was for 6000 meters, a cabin height of 1.39 m in EC-225 would have been very low. At the same time, in the interest of national security(reaching sensitive locations at heights>4500 m), we should have compromised a little on comfort and chosen EC-225 even if it meant no competition. PFB the guidelines as per Defense Procurement Procedure(DPP) 2002 dealing with single vendor situation.The revised Service Qualitative Requirements(SQRs) in 2006 made competition more restrictive instead of making the procurement procedures more broad based to increase competition. The fresh RFP with revised SQRs was issued to only 6 vendors as opposed to 11 in 2002.Comments - 4/12(33%) companies responded to the first RFP out of which 3 were selected for the next round whereas 3/6(50%) responded in the second round, which took place within the next 5 years, after a few SQRs along with the maximum altitude constraint were relaxed. The short number of vendors could be because of the minimum cabin height constraint too which choppers like EC-225 didn't satisfy.The Field Evaluation Trial (FET) of the AW-101 was conducted on representative helicopters and not the actual helicopter. The AW-101 was still at the development stage at the time of the FET.Comments - AW-101, aka EH-101, took its first flight in 2000 for Italian navy. The representative helicopters must have been provided due to either some added configurations required by us or transportation issues. Either way, CAG is right in saying that testing must have been done on the actual helicopter to confirm the deal.Although the 2006 RFP had laid down the necessity of carrying out the field evaluations in India, they were conducted abroad.Comments - The FET of AgustaWestland was carried out in UK and of Sikorsky in USA because of transportation and reassembly issues.Given the low utilisation levels of the existing fleet of helicopters, the Ministry was not justified in procuring four additional helicopters for VVIPs.Comments - AW-101s were supposed to be used by VVIPs such as the PM & the President apart from the defense forces for flying at very high altitudes. The defense ministry said that "The quantity of helicopters proposed for procurement was revised from 8 to 12 helicopters by adding 4 helicopters in non-VIP configuration for security reasons." There is no specific justification given for the increase.Q:How did Sonia Gandhi's name crop up in the entire issue?On April 8, the Milan Court of Appeals, equivalent to Indian High Court ruled that the Rs 3,565 crore AW contract involved payoffs to Indian officials. Overturning a lower court judgement that said corruption could not be proved, the court of appeals found Giuseppe Orsi, the powerful former chief of Finmeccanica, and Bruno Spagnolini — who headed chopper division AW— guilty of international corruption and money laundering.Prosecutors in the court produced a note purportedly written by Christian Michel to Peter Hullet, India head of the Anglo-Italian company, in 2008 revealing that he had advised the people handling the VVIP helicopter deal on the company’s behalf to target people close to Congress president Sonia Gandhi, including the prime minister and some of her closest advisers, to win the contract.Q:What about Congress' charge that "it blacklisted the company but was delisted & again offered a contract by the BJP"?There was an integrity clause in the VVIP choppers deal with AW and after the corruption allegations surfaced in Italy against the company, Congress had no option but to cancel the contract amidst the public outrage against corruption in general in India. But still, the company wasn't blacklisted.In 2012, both the Indian Navy and Coast Guard had issued a request for proposal (RFP) for 100 Naval Utility Helicopters(NUH). At that time, NUH was a ‘Buy Global’ RFP and only AW and Eurocopter (now Airbus Helicopters) had responded. But after the current government came to power, in a bid to promote Make in India which promotes local manufacturing, it was changed to 'Buy & Make in India' RFP. So, AW and its parent company, Finmeccanica, could bid for defense business, not as prime contractors but as partners or sub-contractors to principal vendors.The company was blacklisted, in 2014, after the NDA came to power, when CBI started investigating the issue.Q:What's the role of middlemen Christian Michel, Guido Hashke & Carlo Gerosa? What's the money trail?Christian Michel is the son of Wolfgang Max Richard Michel, who had close links with the Bitish Labor Party. He even pushed a deal that envisaged a biography of Gaddafi being published in the UK and that country's BAE Systems receiving lucrative contracts from Libya. The plan never materialised though.In 2008, Michel approached the then CEO of AgustaWestland John Grandy via email to provide promotional services for the UK firm that “could be paid monthly in connection with the signature of AW’s first new major contract in India.” His commission was paid by AW Ltd through Media Exim which carried out functions including “press services, Indian market analyses and local support in the office in Delhi, Mumbai and Bangalore”. Moorbank, a Singapore-based consulting firm also owned by Michel, was in charge of providing assistance with the offset agreement (post-contract) entered into with the Indian government as part of the deal. There's clearly a conflict of interest here since the same man is dealing with the government and one of the vendor companies, which eventually got the contract.The other two middlemen Guido Hashke and Carlo Gerosa used to inflate the price of consultancy contracts with AW. They would then buy softwares from companies owned by SP Tyagi's cousins, again at inflated prices.There was a note, written by Guido Hashke, and dictated by Christian Michel, about the payments which were divided in four parts carrying initials of "AF" (Air Force) 6 million, "BUR" (bureaucrats) 8.4 million, "Pol" (politicians) 6 million and "AP" (alleged to be Ahmed Patel) to be paid 3 million Euro.CBI & ED have to figure out the money trail to the Gandhi family & other politicians to put them behind bars.Q:Who is SP Tyagi? What's his role in the entire matter?SP Tyagi was the Chief in 2004 when IAF agreed to lower the maximum altitude ceiling from 6ooo m to 4500 m. In its findings the CBI claimed, that back in 2004, Sanjeev, Rajiv and Sandeep - all cousins of SP Tyagi, who had acquaintance with Guido Hashke and Carlo Gerosa and entered into a consultancy contract with Gordian Services Sarl, in Tunisia. Gordian Services belonged to Haske and Gerosa, both of whom stand accused in the scam. The agency found out that amounts of 1,26,000 Euros after May 2004 and 2 lakh Euro after Feb 2005 camouflaged as consultancy fee was paid to Tyagi brothers and some of the money was allegedly paid off to AFM Tyagi himself.Q:References?http://www.prsindia.org/administ...Full text: Statement by Defence Ministry on acquisition of AgustaWestland VVIP choppersHow Tyagi brothers lobbied for AgustaWestland after its disqualification in 2002 | Latest News & Updates at Daily News & Analysis‘Make in India’ saves AgustaWestland bidAgustaWestland AW101wikipedia.orgMil Mi-8Explained: The AgustaWestland VVIP chopper scam2013 Indian helicopter bribery scandalAgustaWestland

The short answer is by ordering 42 Su-30 MKI and LCA.Government Mulls Plan B if Rafale Deal Fails to Come ThroughThe long answer is we need to look into the premise of the Rafale acquisition. In 2001, IAF suggested to purchase 126 Mirage 2000 fighters and transfer the production line to India of Mirage 200 to upgrade India's fighter production ability (Dassault agreed to that), have a single engine high uptime fighter, low cost of operations, decrease the logistics as India was already operating Mirage 2000 as well as increase the number of fighters.Indian Government at that time, NDA, suggested to have an open tender and select the 126 fighter. This led to one of the most comprehensive testing of the 4+ generation fighter jets which comprises of taking off at 50 degrees in Jaisalmer, sea level trials, soaking at -20 degree overnight and taking off. At this gruesome evaluation, F-16, F-18, Gripen and Mig 35 failed. Only two of the most expensive and most capable 4+ generation fighters Rafale and Eurofighter were selected. Once they were selected, financial bids were opened and L1 (lowest quoted price) was determined and Rafale was winner.There are four important things to note here. In whole this tendering, evaluation, financial bids, almost 10 years were passed after 2001. Second thing is because of this tendering, the original Mirage 2000 lines which were there for India to take were closed. Thirdly, due to the structure of tender of technical evaluation followed by financial evaluation made it impossible to select or negotiate with other contenders including Eurofighter. So, briefly the process did not leave any scope of negotiation with other contenders if the L1 was exorbitantly high. The financial bids of other disqualified fighters were not opened. Thus, the tender was rightly fully cancelled.But lot has been passed from 2001 to 2016. Su-30MKI (more than 272 are contracted and 200 are delivered) are performing incredibly well. We have developed lot of experience in maintaining and operating them, they are the CROWN JEWEL of IAF. So capability wise (what a fighter would do in combat), Rafale does not offer, if any, improvements. Thus, if needed 2 sqd. of SU-30 MKI can be ordered to make up the number.The real requirement was the replacement of Mig-21 fighters. Mig-21 are single engine fighters. They are cheap to operate. We needed cheap fighter at low cost that can be acquired quickly. Rafale is anything but cheaper. Moreover, Rafale is a two engine fighter jet, thus its operating cost is higher than single engine Mirage. Acquisition cost as well as weapon package is also very high as with all the European origin fighter. Thus, acquiring Rafale for cost effectiveness does not make sense. But we need numbers, low cost.LCA fits that fill. It is a homegrown fighter and it is an incredible fighter, not withstanding all the media lashes it has got. With IAF on board and govt. placing order of 8 Sqd. of LCA in its current form would give lots of maneuvering space to MOD and IAF. The cost of LCA is 25% of Rafale or even lower. It can be produced quickly by HAL. The recent estimate is 16 planes per year from 2018 onwards. In terms of capability, it is equivalent to Mirage 2000 or even better. Since, it is home grown fighter, we can add all the bells and whistles on it with time as Indian Navy is currently doing it while working with ADA for LCA MK-2. When LCA MK-2 with more powered engine would come, it will a fighter to reckon with. So essentially, lack of numbers due to Rafale not coming will be picked up by LCA with much less cost.Air force, DRDO, pleased with Tejas performance at BahrainThe only disadvantage of not manufacturing Rafale in India is we will not learn the new generation western manufacturing practices. Regarding TOT, no country in this world will part with their up to date technologies in the area of jet engines, radar codes and so on.So, to sum-up capability wise, Su-30 MKI would manage the higher end. As a work horse, LCA would fill the number with very good capabilities. I will go on a limp and say, LCA can handle all of our Western front without help from any Su-30. The money saved can be invested in modernization of airbases, SAM capabilities, precision munitions and many more.So, why then 36 only, I think it was done as a saving grace and not to invite fines for closing the tender. In my opinion, this number may increase to 76 in near future. Certainly, Rafale will bring extra good-to-have capability (higher uptime, low maintenance) but it was not the premise of original 126 MMRCA tender.

Why UGC Has Best ROI Compared To Traditional MarketingUser generated content (UGC) should be a big focus for all businesses looking to build an online community, get new leads, and make more sales. With the state of marketing being what it is today, you can technically get by without UGC. You can get some new clients and make some sales. You won’t, however, be able to maximize your profit, and you definitely won’t reach your full ROI potential. This sounds like a big claim, but we’ve got three case studies spanning multiple industries that back it up.Before we jump into the case studies, we’re going to take a look at why UGC and ROI are so intricately linked.Why UGC and ROI are CorrelatedSharing UGC on social media and on your website is more than just a marketing strategy or a passing buzzword. It’s a tool that can be used to create trust and a sense of authenticity amongst your website visitors and social media followers, and in time, it can help your brand to create an engaged and loyal community.Creating campaigns that focus purely on UGC can build an engaged community, and with it, more loyal customers, as shown in this example with Teva Socks.With the state of marketing today, traditional methods of marketing aren’t as effective. The reason for this isn’t just that the competition on ad platforms is so stiff (though it definitely is); it’s also because traditional forms of advertising are no longer trusted. Users might ignore the same Google-placed Ad for your business on 4 different sites, but will click if their friends share UGC about the business. The average consumer is now the best advocate you can have, with word of mouth marketing reigning supreme in today’s marketing process.UGC doesn’t have to only stay on social media; sharing it your site and even in person can help extend the reach of your campaigns and boost your ROI further, as shown in this example from Microsoft.UGC works as social proof, with everyone that’s engaging with your brand online essentially vouching for you and your products. This is more powerful than any form of marketing, and you’ll see your number of clients and your profit increase if you continually share UGC on different platforms online. Since UGC can be created in mass quantities without costing you a dime, it will lower your marketing costs. With an increased profit and lower overhead costs, you’ll be looking at your largest possible ROI.3 Case Studies that Show How UGC Maximizes ROIWhile some case studies end up with results that seem more like flukes (we’ve all seen the ones that “prove” some crazy things), when multiple case studies come up with consistent findings again and again, that shouldn’t be ignored.While there are a ton of case studies out there about UGC, these case studies run by three different brands show how UGC can maximize ROI.ROI and UGC is closely linked, and brands need to be paying attention to both.1. Nielson GlobalNielson Global ran an in-depth survey and study in 2015 to find out how consumers felt about the ads they were seeing, and what types of advertising they trusted most and responded best to. They found that there were three important factors in how well your campaigns performed, which were reach, resonance, and reaction. UGC and other consumers’ opinions, it turns out, resonated a great deal with consumers.Some important highlights of the study include:· Two-thirds of users trust the opinions of other consumers posted online· Recommendations from family and friends were the most trusted form of advertising (with 83% of users trusting in the recommendations), with a branded website coming in second· Only approximately 6 in 10 users trust more traditional sources of advertisingConsidering that 83% of users trust opinions from those that they know and 63% trust the opinions of other random consumers posted online, but only 57-58% trust ads on TV or in Newspapers, UGC is exceptionally important and will likely resonate best with your audience.2. PercolatePercolate recently wrote a report on their research that evaluated how businesses could improve ROI with user generated content. The study took a close-up look at Millennials in particular, who are heavily influencing and shaping the world of marketing today.Some important highlights of the case study include:· 86% of Millennials believe that UGC is a good indicator of the quality of a product, brand, and/or service· 8 in 10 Millennials say that UGC has influence over what they buy, with 25% saying that UGC has “a lot” of influence and 59% saying that UGC has “some” influenceWith the majority of Millennials believing that UGC is an indicator of high quality, it makes sense that so many of these users would allow it to influence their buying behavior and purchase decisions, and that this impact directly translates into more sales (and higher ROI) for businesses.3. TINT Case StudiesTINT works with businesses of all sizes and in any industry. We’ve helped brands in a large number of industries implement UGC on their sites and increase their ROI because of it. With brands like Universities and Travelocity seeing increased ROI thanks to UGC, it’s clear to us that UGC isn’t just beneficial for brands with physical products.We had three particularly notable case studies, which were from campaigns we ran for Speciality Produce, Travelocity, and The Bubble Foundation.Specialty Produce is a family owned fresh produce supplier, serving both wholesale and retail customers. They utilized TINT and UGC to share the food’s journey from farm to table online with their customers, aided by the hashtag #specialtyproduce that was featured prominently in their warehouse (displayed below)and on their site with user generated content. As a result, they saw a 13% increase in engagement on posts that were attached to a hashtag, and had a boom in user generated content being shared to the hashtag. You can see more about this case study here.When Travelocity ran a campaign that prioritized UGC, it became their most successful marketing campaign to date. They hosted a contest that focused on inspiring UGC with the hashtag #IWannaGo and offered a prize of a dream vacation. More than 25,000 people jumped at the chance to win and have fun with the contest, and they each created content and helped to spread Travelocity’s message across multiple social media accounts, gaining new followers at ridiculously low costs compared to typical lead generation campaigns. They also got more engagement; in 26 posts aggregated on Travelocity, 95% of visitors engaged and scrolled through the content. You can learn more here.Finally, The Bubble Foundation’s #wearyellowforseth campaign had incredible success. Seth is a young boy who needed a bone marrow transplant, and to support him, his family asked for people to wear yellow, his favorite shirt. They launched the hashtag #wearyellowforseth, which blew up instantly and even garnered celebrity attention. The Bubble Foundation worked with us to create a website that allowed UGC images from multiple platforms to be displayed in one place. They received thousands of images. Seth received tons of images, the family received financial donations to offset the cost of the surgery, and the Bubble Foundation gained the kind of exposure that you can’t put a price tag on. It was a win-win for everyone. You can read more about this case study here.These case studies all came from brands in very different industries and in very different sizes, but showed consistent results for the power and influence that UGC can have on both online engagement and ROI.Final ThoughtsUGC isn’t just necessary to build social engagement and the number of followers you have on Instagram; it’s an essential selling tool that shouldn’t be overlooked. While you may be able to sell without it, you’ll miss out on its optimum potential, and you won’t reach maximum ROI. These case studies discussed above were all from different types of businesses in different industries, demonstrating the universality of these statistics.Source: Why UGC Has Best ROI Compared To Traditional Marketing