Ten years after floating global tender for 197 light utility helicopters worth over Rs3,600 crore for Army and IAF to replace ageing Cheetah and Chetak helicopters, which are lifeline of troops in Siachen, the Government on Friday scrapped the tenders due to alleged irregularity in field trial and bribery charges. This was the second time the tender was scrapped after the first cancellation in 2007.
Revoking the tenders, Defence Acquisition Council (DAC) headed by Defence Minister Arun Jaitley opted for the Indian industry to manufacture the helicopters as per ‘buy-and-make-in-India’ policy.
It allows the private or public sector company to procure technology from abroad and build the weapon systems in India. The Government hopes that this project has the potential of generating business worth over Rs40,000 crore.
The DAC, apex body for clearing procurement proposals of three Services, also cleared several projects worth over Rs20,000 crore.
These include procurement of 15 Chinook and 22 Apache attack helicopters from the US after clearing the off-set clauses, mid-life upgrade
of six submarines worth over Rs4,800 crore, and procurement of 118 Arjun Mk II tanks for Rs6,600 crore, and 40 self-propelled catapult guns worth Rs820 crore, officials said.
The six submarines include four Sindhu class made by Russia and two Shishumaar class built by Germany. While two Sindhu submarines will be refitted in Russia, Mazgaon Docks limited (MDl) will upgrade the other two in Mumbai besides the Shishumaar submarines.
The DAC also cleared a Rs900-crore proposal for setting up dedicated mobile communication systems for troops deployed along the China
border under Tezpur-based 4 Corps, Dimapur-based 3 Corps and leh-based 14 Corps. The Navy was also allowed to go ahead with its plan to acquire 16 multi-role helicopters and the bids will be opened shortly.
American Sikorsky and European NH Industries, which include AgustaWestland, are in contention.
The decision to give the go-ahead for opening the bids of the two competitors in the race was taken after the Defence Ministry issued guidelines for dealing with cases involving Italian defence group Finmeccanica and its subsidiary companies.
The Ministry also cleared a Rs1,700-crore proposal for anti-submarine warfare suite for 11 warships. However, the DAC deferred its decision regarding a proposal for procuring the Israeli ‘Spike’ anti-tank guided missiles.
The cancellation of 197-helicopter proposed deal will have long-term impact on the Army and IAF’s modernisation plans as Cheetah and Chetak helicopters are in the final phase of their operational life. The light helicopters sustain troops deployed in Siachen and other inaccessible areas in ladakh and Arunachal Pradesh.
Given the lack of industrial base within the country to manufacture helicopters except public sector Hindustan Aeronautics limited (HAl), replacement for the ageing fleet will take some more years, sources said. HAl is already burdened with several projects and the private sector is in nascent stage as regards aerospace and buy and make policy will not be able to hasten the process of procurement of these helicopters, they said.
Coupled with this situation, the complicated process of defence procurement starting with floating global tenders or request for information and proposals followed by technical trials and negotiations with the lowest bidder is time consuming, sources said.
The 197-helicopter tender was floated in 2004 and then Defence Minister AK Antony scrapped the tender in 2007 at the last stage after wrongdoings came to light during the technical trials.
At present, Eurocopter (joint product of UK, France and Germany) and Russian Kamov were competing for the contract which was put on hold two years back due to an ongoing CBI probe.
The probe was ordered into the deal in view of allegations in the AgustaWestland VVIP helicopter scam that a Brigadier had asked for a bribe of Rs30 crore from the Anglo-Italian firm for helping it in the light utility helicopter deal. AgustaWestland was eliminated during the technical trials leaving Eurocopter and Kamov in the race.