Top level sources in Pawan Hans told The Financial Express: "The cabinet gave its approval for this deal involving sale of Westland choppers a month ago. We hope to sign on the dotted line shortly". The Westland helicopters were grounded for the past several years, proving to be a major drain on the resources of Pawan Hans.

Their resale value plummeted and the public sector company's attempts to find a buyer for the choppers have proved unsuccessful in the past. Experts opine that the Rs 70 crore price which AES Services is prepared to pay for 19 helicopters is well below the market price for machines which are operating. However, for the grounded choopers it can be quoted as a reasonable price.

Incidentally, the Westland helicopter deal, signed in 1986 when Rajiv Gandhi was the primeminister, raised a big controversy and is labelled one of the worst deals in the civil aviation sector. Due to political pressure, Pawan Hans had bought 21 Westland helicopters from the British manufacturer which was about to close shop. The choppers were meant primarily for Pawan Hans's off-shore operations for the Oil & Natural Gas Commission (ONGC). Just a few months after the agreement, it was discovered that the Westland helicopters were ill-suited to operate in the moist conditions which off-shore operations involved. The helicopters suffered from engine failure and torque mismatch, company sources said, besides being fuel guzzlers.

After a Westland helicopter crashed at Trombay, the entire fleet was grounded. Part of the fleet was later re-deployed. However, another crash at the Vaishno Devi shrine led to the permanent grounding of the Westland fleet. To top the woes of Pawan Hans, the Westland deal had involved a loan from the Government which the company has been unable to pay-off. It recentlyasked the Government to write-off the loan and the interest payment. While the Westland loan amount is Rs 130 crore, the interest payments on the loan have mounted to Rs 265 crore. The Government has promised to consider a loan waiver though no decision in this regard has been taken yet. The debt may prove to be a stumbling block in the Centre's attempts to divest its equity stake in Pawan Hans. While ONGC owns 21.5 per cent equity stake in Pawan Hans, the remaining stake is with the Government.

On the basis of the Disinvestment Commission's recommendation, the Government had offered full control of Pawan Hans to ONGC. The latter turned-down the offer, stating that operating a helicopter company did not synergise with its core competencies.