India’s prestigious helicopter acquisition plans may finally get clearer by the end of the month as the Defence Ministry scrutinizes the report submitted by a special technical committee regarding the acquisition process. The deal to procure 197 light utility helicopters for the Army and Air Force was stalled due to complaints of tender deviations. The Technical Oversight Committee has now submitted a report to the Defence ministry and the decision to either scrap or go ahead with the deal will be finalized after studying the report.
The two firms participating in the tender for supplying 197 light utility helicopters (LUH) include the European Eurocopter and Russian Kamov. As of now, a report by the committee has been submitted and the Defence Acquisition Council headed by Defence Ministry AK Antony will now be discussing the issue of going ahead with the deal or aborting it due to inconsistencies. The deal was scrapped during its first try in 2007 as well and a new tender was floated.
Defence Minister AK Antony has stated that if any evidence is found relating to tender deviations or any other malpractice, the deal will be scrapped. While the two international bidders Eurocopter and Kamov are also jittery about the possibility of the deal getting scrapped, the Indian Army and the Indian Air Force (IAF) also stand to lose since the acquisition of the LUH has been getting constantly delayed.
The acquisition of LUH is crucial for the Indian Army and the Indian Air Force as they aim to replace the fleet of vintage Cheetah/ Chetak choppers procured in the 1970s. Out of the 197 choppers, over 130 will go to the army and the remaining will be operated by the air force. The LUH has been getting bogged down for four years. The previous tender was also scrapped at the last stage after certain discrepancies were noted in the process.
Earlier this year, Eurocopter, which is competing with its AS 350 Fennec chopper, had written to the Indian Army Chief to clarify the time frame and speed up the acquisition process which is worth over $ 1.5 billion. Eurocopter indicated that the technical evaluation process has taken over 38 months and not come up with a decision yet. The trials of the two helicopters, Eurocopters AS 350 Fennec and Russia’s Kamov 226 'Sergei', were completed in December 2010 and the reports were submitted to the Defence Ministry in 2011.
The Indian Army’s first attempt to procure 197 helicopters had got stalled in 2007 when the Defence Ministry cancelled the tender at the last moment. The second tender was issued in 2008 but this also ran into rough weather after an anonymous letter received by the Defence Ministry alleged roles of arms dealers in the contract issues related to the trials of the helicopters.
Even if the current situation is sorted and the DAC grants approval, the acquisition process of 197 LUHs will still take a long time as the next step in the process is opening of the commercial bids of the two contenders in fray. Following that, a commercial negotiation committee will be constituted to negotiate with the lowest bidder which will also be time-consuming affair.