Narendra Modi govt to fast-track $1.5-bn deal, Army to get 197 light utility helicopters

Written by Huma Siddiqui | New Delhi | Updated: Jun 3 2014, 14:17pm hrs
Arun JaitleyOnce the RFP process is competed, it would take another two to three years before the first helicopter is delivered.
The Modi government is set to fast-track a $1.5-billion deal to acquire 197 light utility helicopters (LUH) for the army. The award of the contract was stuck with the previous UPA government, the latest delay coming after the controversy over buying helicopters for VVIP use surfaced.

Sources told FE that a fresh request for proposal (RFP) for the chopper deal will be issued by the new government within a month's time. Defence minister Arun Jaitley has already been been briefed about the delayed/on hold projects, including the procurement of the LUHs.

Once the RFP process is competed, it would take another two to three years before the first helicopter is delivered. The delays in the previous rounds of bidding have already hurt the army badly as it has been searching for a modern helicopter to replace the aging Cheetah/Chetak helicopter. Most of these are already running on an extended lease of life and need immediate replacement.

With defence as one of the priority areas for the BJP-led government, it is widely expected to clear the policy logjam and speed up the award of critical projects including the much-delayed $20-billion medium multi-role combat aircraft or MMRCA deal.

The process to replace the Cheetah/Chetak helicopters which undertake patrol, reconnaissance and evacuation missions in forward locations and high-altitude areas like Siachen had been cancelled twice earlier by the UPA government and initiated afresh only to be put on hold again after the AgustaWestland row came to light where allegations were levelled that the deal was being designed to favour the Italian defence major.

As a consequence, the army had requested the ministry to delay the acquisition process and the Director General (Acquisition) had asked Eurocopter and Kamov to extend their bids offer till the end of 2013. Two rounds of trials of aircraft from these companies had already taken place at a substantial cost. The procurement of the 197 light helicopters has been dogged by technical problems as well. In 2003, India issued an RFP, estimating a deal worth $500-600 million to buy 60 helicopters outright, with the remaining 137 being built under licence by Hindustan Aeronautics (HAL). Eurocopter's AS550 C3 Fennec and Bell Textron's 407 competed in the second and final round of summer trials, and in 2007 the process ended up completely derailed.

A new RFP out for a successor "Reconnaissance and Surveillance Helicopter programme" (RSH) went out in 2008, and testing was done in 2010. 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.

According to the last RFP issued by the MoD, initially 60 helicopters will be acquired off the shelf and the balance will be manufactured in India under licence by the HAL.

However, HAL has since claimed that it had developed its own LUH, and that the 3-tonne aircraft will roll off its assembly line by 2015. With the state-run company entering the fray, though still not a part of the RFP process, the entire process may take an interesting turn.