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RUSSIA LOOKS FOR AN OPPORTUNITY

RUSSIA LOOKS FOR AN OPPORTUNITY AS AGUSTAWESTLAND SCANDAL ROCKS MOD
By Bulbul Singh

19 Feb 13. The Russians have a chance to re-enter the Indian defence market which they had lost in the last decade to Israel, United States and France in the wake of the AgustaWestland VVIP helicopter alleged corruption scandal. As the Indian defence ministry bureaucracy is likely to become more cautious and slow in future weapons deals in the run up to the general elections in mid-2014, sources say the Russians could get the VVIP helicopter contract on the platter after the AgustaWestland is formally cancelled.

The Defence Minister A K Antony is not ready to compromise on any ground on the alleged AgustaWestland scandal and will use the Integrity Cause in the Contract to cancel the VVIP helicopter deal , said a source in the Indian defence ministry. The stakes for the government are too high ahead of the elections and Antony will not blink in scrapping the helicopter deal added the source. “After all it is only a helicopter for the VVIPs,” added the source.

The Indian defence ministry is likely to give an order to Russia for the MI-17 helicopters which it has already contracted and there will be no issue on the price as well because there is a clause in the contract that the earlier contracted price would hold good for future repeat orders.

Indian Air Force bought 80 Mi-17 V5 helicopters from Russia in 2008 on government to government basis at a cost of $19.25 million each and in a subsequent order bought 59 Mi-17 V5 helicopters at the same price. Additional orders for 12 MI-17 V5 helicopter will be at the $19.25 price which would work out cheaper than the order with AgustaWestland. An Indian Air Force (IAF) official said the Mi-17 V helicopter can be modified to the requirement for a VVIP squadron.

“The Russian made Mi-8S helicopters were modified for VVIP use in India in 2010 and can fly till 2014. The Mi-17V5 helicopters can be put to operation with upgrades for VVIP requirements by end of 2013 incase a formal order is given now,” said and IAF official.

India has been buying weaponry from Russia and erstwhile USSR since 1970’s and majority of the weaponry in its inventory is Russian-made. Despite buying weapons and equipment worth billions of dollars from Russia there have never been charges of corruption as has happened after India started buying weapons through open competition. Open competition in defence purchases has become very risky for any party in power and it could become convenient in the future for governments to buy weaponry on government to government basis, said an Indian defence ministry official.

Purchases from Russia have had their problems associated with future maintenance as the supply of parts has been tardy and of inferior quality and at very steep prices. Moreover Russia does not favour obliging India on the mandatory offset, an issue which has been discussed between the two countries on several occasions.

As Russia looks for an added opportunity in the Indian defence market in the wake of alleged scandals of procurement through open competition, many question silently why the leaks are selective and come from overseas.

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