NEW DELHI: The Comptroller and Auditor General of India ( CAG ) said on Tuesday that the government had failed to follow defence procurement policy rules in awarding a 560 million euros luxury helicopter deal to AgustaWestland , a division of Italy's Finmeccanica.

"Several instances have been observed where the ministry had deviated from the provisions of the DPP (defence procurement policy) 2006 and RFP (request for proposals) issued in September 2006," the Comptroller and Auditor General said in the report presented to Parliament.

Both Italy and India are investigating the deal.

Some highlights of the CAG report:

*The benchmarked cost of Rs 4871.5 crore for AgustaWestland VVIP helicopters was unreasonably high compared to the offered cost of Rs 3966 crore.

*There were violations of defence procurement procedure in the contract for 12 choppers in the nearly Rs 3727 crore deal.

*Defence ministry deviated from procurement procedure and tender on several instances in the deal.

*CAG questions the decision of the then IAF chief in 2007 to hold trials abroad.

