$1.5-bn deal for light utility choppers uncertain

The much-anticipated $1.5-billion deal for 197 light utility helicopters is facing cancellation for the second time as the decision has been deferred by the Defence Acqusition Council (DAC) in the Ministry of Defence.

The MoD has been in the process of procuring 197 helicopters for the Indian Air Force and the Indian Army. According to sources, the MoD has now decided to delay the process as a result of deviations in the deal, coupled with the issue of the kickback allegations in the deal for 12 VVIP choppers.

The process to acquire these high altitude reconnaissance and surveillance helicopters worth $600 million was in the final stage.

While sources claimed that the decision on the deal will be taken later, which has been in work since July 2008 and delayed because of the bureaucratic process. However, industry watchers told Financial Express on condition of anonymity that the RfP for the 197 helicopters may even be scrapped.

French company Eurocopter's Fennec and Russian Kamov Ka-226T are participating in the tender for the supply of light utility helicopters to the two forces for replacing the fleet of vintage Cheetah/Chetak choppers procured in the 1970s, might lose out if the MoD decides against the deal. Italian company AgustaWestland was also a contender originally, but was eliminated on technical grounds.

As reported by Financial Express earlier, sources confirmed "both the Eurocopter's Fennec and its competitor, the Russian Kamov Ka-226T, have not completely met the specifications". However, a technical panel has studied the deviations and made certain recommendations to the MoD. The decisions made have not been accepted by the Defence Acquisition Council, said the sources.

The Indian Army has been trying to replace its fleet of the ageing Cheetah and Chetak helicopters for nearly a decade. In 2007, the tender for 197 helicopters floated in 2003, had reached a stage where the Eurocopter AS 550 Fennec had emerged as the winner.

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