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INDIA PUTS ON HOLD AWARD OF HELICOPTERS CONTRACT

INDIA PUTS ON HOLD AWARD OF HELICOPTERS CONTRACT TO EUROCOPTER IN THE WAKE OF PRESSURE FROM WASHINGTON
By Bulbul Singh

14 Jul 07. The Indian defence Ministry has put on hold the award of a tender to Eurocopter for the supply of 197 light observation helicopters for the Indian Army worth $650m. The decision to put on hold the program follows intense pressure from Washington to the effect that the helicopter deal was not transparent.

In March this year the Indian defence ministry had announced that Eurocopter’s AS 550 had emerged as the winner over Bell 407 from Bell Helicopters, United States after series of trials.

In response to a global tender in 2002, only two vendors were short-listed, as the third Kamov of Russia with its KA 226 dropped out and only the Bell 407 and the Eurocopter 350B3 were left in the fray.

Whereas one Indian defence ministry official said that Bell failed to meet the qualitative requirements, a diplomat of the U.S. Embassy in New Delhi said the necessary requirement pertaining to axis autopilot was finally fulfilled but the Indian defence ministry never took cognisance of this in July 2006 and went ahead to reject Bell 407 in March 2007. The diplomat said, this was despite a number of meetings during July 2006 and February 2007 between the U.S. DoD officials and Indian defence ministry officials.

Indian defence ministry officials refused to comment on the whole issue saying the matter has got “too complicated” after pressure from Washington. Indian defence ministry officials only said that no deal has so far been struck between Eurocopter and the Indian Army for the acquisition of 197 light observation helicopters for the Indian Army.

Officials from Eurocopter or Bell were unavailable for comment. The Indian Army is acquiring 197 helicopters to replace the Cheetah and Chetak helicopters licensed produced by state-owned Hindustan Aeronautics Limited ((HAL). Under the program the selected vendor will build 60 helicopters at its facilities and co-manufacture the remaining 137 at Indian facilities.

One Indian defence ministry official said in private that with the United States aggressively vying the Indian defence market, estimated at around $60bn in the next ten years, procurement decisions are getting difficult to arrive as bureaucrats and officials are going slow on procurement decisions fearing strong backlash from competitors.

The U.S. diplomat said, the procurement process in the Indian defence ministry needs to be made more transparent, adding that a rejected vendor should have the right to know after the award, the reasons for rejection.

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