Friday, 29 July 2016

Recalling Gandhis’ deadly deal with Westland Part - II

(Part of my Memoirs)



    In Part I ( Recalling Gandhis' deadly deal with Westland, Part - I  you read how Rajeev Gandhi acquired Westland helicopters despite knowing very well the defects and is therefore squarely responsible for the death of 10 persons in two crashes. Now read the remaining part of the story.

Consequences faced by Mrs. Thatcher

 Mrs. Thatcher’s jubilation over the success of her plan proved short lived. The misuse of foreign aid meant for poverty alleviation programme in India was not sufficient to save the financially ailing company. The British government started scouting for a saviour for its last helicopter manufacturer. The process led to serious differences between Mrs. Thatcher who wanted the Westland Helicopters to merge with an American company, Sikrosky and her Defence Secretary Michael Heseltine who insisted on merger of Westland as well as British Aerospace with the Italian company Agusta and French companies. The relationship between the two became so sour that the Defence Secretary resigned in January 1986. It seriously damaged Mrs. Thatcher’s reputation and political stature.

After resignation, Heseltine returned to the backbenches from where he continued to create problem for Mrs. Thatcher. He strongly opposed her when she needed support for her extremely unpopular Community Charge (also known as the poll tax) in 1988-89. He challenged her leadership of the Conservative party in late 1989 and in the first round of voting secured enough number of votes to force second round. Fearing defeat Mrs. Thatcher resigned but it was more popular John Major who replaced her.    
 Westland continued to haunt Mrs. Thatcher for years even after her resignation and retirement from politics. In 1997, Clare Short, UK’s International Development Minister, ordered an enquiry into the deal with India. She described linking aid to domestic political and financial considerations by Mrs. Thatcher as “outrageous” and called for delinking aid from political considerations. Later, investigations carried out by the UK’s National Audit Office revealed that the Thatcher government lost ‘over 105 million pounds on the Westland-30 programme including money spent on its research and development.’  
 At the end, everyone was loser. It was ‘catastrophic waste of money", for Britain, as some British officials described it. India wasted huge amount of money on operation and maintenance of those faulty flying machines and 10 Indian lives were lost in two crashes.

End of Westland Helicopters as a separate entity  

Despite Mrs. Thatcher’s opposition, Westland Helicopters ultimately merged with the Italian company Agusta. Its management had already been taken over by the global engineering conglomerate GKN when Rajeev Gandhi was being pressurised by Mrs. Thatcher. Later in 1988, GKN acquired the shares held by another British company, Hanson plc. Six years later it became a wholly owned subsidiary of GKN. In 2000 GKN and Italian company Finmeccanica merged their respective helicopter subsidiaries. In 2001 the merged entity came to be known as AgustaWestland. Later, in 2004,Finmeccanica acquired GKN's too. The latest development (January 2016) is merger of AgustaWestland and Leonardo - Finmeccanica’s Helicopter Sector.

Westland’s revisit to India in the company of Agusta of Italy

Even after losing its separate existence, Westland continues to trouble India. When the people had almost forgotten the havoc caused by Westland Helicopters in the 1980s, tagging behind Agusta of Italy it made a fresh attempt to enter India . This time the strategy was different because no aid money was available as bait. AgustaWestland tried to get orders by following the international practice of ‘buying’ supporters, much more aggressively than what Bofors and others had done in the past. Unfortunately,  premature leakage of payments of huge amounts of bribes to those who could influence the decision, those who had to take the decision and those who had resources to influence public opinion spoiled the game, leaving the company as net loser. By the time the deal was cancelled, the company had paid millions of dollars as bribe. After cancellation India recovered Rs. 2068 crore – Rs. 200 cr. by encasing bank guarantee and the rest on order of the appellate court of Milan – as against Rs. 1620 crore it had paid to AgustaWestland.

Helicopters India did not need

The most important fact that emerges from the Westland and AgustaWestland sagas has been overlooked. In 1980s the Government of India imported 21 defective Westland helicopters which were not needed. In the latest scandal the Government decided to buy 12 very costly AgustaWestland helicopters which were unnecessary. The demand for VVIP choppers was artificially created more than a decade ago. Till date absence of such choppers has not been felt. We never heard that a Prime Minister or a Defence Minister could not visit a place for want of an AgustaWestland type chopper.

Demystifying a mystery

A mystery remains: what made Rajeev Gandhi change his mind on Westland helicopters? My research has revealed two explanations.

(1)   According to the declassified British government documents, Mrs. Thatcher twisted Rajeev Gandhi’s arms.  He yielded to her threat that that refusal to accept her proposal could prove ‘problematic’ for further economic aid.

(2)   According to an Indian author Jayanta Kumar Ray(India’s Foreign Relations, 1947–2007), “The decision was inexplicable, unless one referred to an important event in the life of Westland towards the end of 1985. At that time, an American-Italian consortium, with an in-law of the Indian Prime Minister in a dominant position, took over the Westland helicopter company.”

If the above claims are true, Rajeev Gandhi’s heart melted under pressure of two western women.

The bottom line is that to the old wisdom that ‘there is always a woman behind every man’s success’ should be added another worldly wisdom: ‘it is equally true that very often there is a woman behind a man’s foolishness.’


Devendra Narain
IRS(Retd)
A former head of the Project Appraisal Division of the Planning Commission

May 6, 2016

Please read Part I also. Link:
https://naraindevendra.blogspot.com/2016/07/recalling-gandhis-deadly-deal-with.html