Centre scraps light utility helicopter tender, opens it to Indian players

The DAC decided to retract from the tender and opens doors for the Indian industry.

By: Press Trust of India Written by Pranav Kulkarni | New Delhi | Updated: August 30, 2014 7:01 am
The Navy will also get six of its submarines refitted partly from the original equipment manufacturer as well as Indian shipyards at Rs 4800 crore. (Source: Reuters photo) The Navy will also get six of its submarines refitted partly from the original equipment manufacturer as well as Indian shipyards at Rs 4800 crore. (Source: Reuters photo)

The government on Friday scrapped a tender worth Rs 6,000 crore to procure 197 light utility helicopters from foreign vendors for the armed forces and decided to allow domestic players to manufacture these helicopters.

Scrapping the tender, the Defence Acquisition Council chaired by Defence Minister Arun Jaitley put the acquisition under the “Buy and Make Indian” category, allowing the Indian industry to make the helicopters under a joint venture with a foreign manufacturer.

This is the second defence tender under the new government to be opened to the Indian industry. Last month, the government had opened the process to develop 56 transport aircraft to the domestic private sector.

The scrapping of the tender is significant as former defence minister A K Antony had deferred a decision on it following the VVIP helicopters scam. Investigations into the scam had also revealed alleged kickbacks in the light utility helicopters procurement process.

In January, the Central Bureau of Investigation had registered a case against a Brigadier working with Army Aviation Corps for allegedly fudging trial flight records of these helicopters.

While this decision is likely to spell bad news for two foreign vendors — one European and one Russian — who were in the race to equip the Indian forces with 197 light utility helicopters to replace their aging Cheetah and Chetak helicopters, sources in the Defence Ministry said it is likely to bring in business worth Rs 40,000 crore for the Indian industry.

“The DAC retracted the Request for Proposal for the procurement of 197 LUH and decided that it would be under Buy and Make Indian category. It confirms the policy of the Indian government to encourage Indian industry,” an MoD official said.

While clearing proposals worth Rs 20,000 crore in one go, the Defence Acquisition Council also cleared decks for the procurement of 22 Chinook heavy lift helicopters and 15 Apache attack helicopters for the IAF by approving the offset proposals of the US manufacturer. Jaitley also cleared the proposals for Navy, which include equipping 11 of its ships — four destroyers and seven frigates — with anti-submarine warfare suit at Rs 1,770 crore and a mid-life upgrade for six of its submarines at Rs 4,800 crore.

It also accorded extension of the Acceptance of Necessity for the indigenous MBT Arjun Mk-II tank, clearing the Rs 6,600 crore purchase for the Army, a mobile cellular communication system for 3, 4 and 14 Corps at Rs 900 crore and 40 self-propelled guns on the MBT Arjun chassis — provided all of them successfully completes the validation trials.

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  1. A
    Ajay Krishna
    Dec 15, 2014 at 9:11 am
    Instead of going in for another type of choppers, why no select the ALH Dhruv to replace the current fleet. Dhruv can perform the roles currently done by Cheetah & Chetak. It has flown to Siachen, the worlds highest battlefield. It can carry around 12 pengers, i.e. a the size of any army unit. It is already been inducted by Army and Airforce. Then why is it not been inducted in more numbers?
    Reply
    1. A
      Anonymous
      Aug 30, 2014 at 3:00 am
      Good job Modi govt, jai ho
      Reply
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        Bharatvasi
        Aug 29, 2014 at 1:49 pm
        This should have been done long back . Arms lobby had been calling the shots and obliging the power corridors . Private sector getting in will also shake HAL out of slumber or will shut down due to its inefficiency dia is moving towards becoming true power to recon with . Mr Modi is taking steps forward . Light Helicopters purchase had the most scandalous procedure for its evaluation and selection.
        Reply
        1. B
          Brijkhanna
          Aug 29, 2014 at 5:15 pm
          AMMA AUR UNN KEY CRONIES JO PAISA KHAYA HAI OSS KA KYA HOGA?
          Reply
          1. S
            Sameer Sameer
            Aug 29, 2014 at 1:39 pm
            Well done to NDA Government, Vande Mataram, Jai Hind
            Reply
            1. R
              ramdas
              Aug 29, 2014 at 1:51 pm
              It's a good move but late. Siachen troops will suffer futher hardships until the chopper gets made in India tag. Chetak and cheetah helicopters have served the purpose and nearing it's life span. But DAC has cleared chinook & apache offset.
              Reply
              1. S
                Sachin Jagade
                Aug 30, 2014 at 8:54 am
                CONGRESS led by its incompetent defense minister Antony, made a mess of India' defense industry. It was a shame to have an ineffective guy and hi family psycho to run the most important government ministry.
                Reply
                1. S
                  Sachin Jagade
                  Aug 30, 2014 at 8:49 am
                  Well done. This should give a fillip to the Indian arms industry and hopefully private players are encouraged to come up with high quality delivery. Way forward Modiji. Thank you. And by the way, shame on you Congress and Antony.
                  Reply
                  1. S
                    Sibu Kurian
                    Aug 29, 2014 at 9:09 pm
                    This move will benefit India not only in terms of saving billions of dollars, but will encourage Indian industry as a w. JVs for technical knowhow is a great option to bring in foreign technology which will boost the Indian industry whether public or private enterprise. This would also ensure more employment in India, thereby more individual and corporate taxes to the government. Being self reliable on the arms industry also opens up our possibilities for external s.
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                      Slayer
                      Aug 29, 2014 at 4:29 pm
                      Apache is ace fighter helicopter...have seen its video on youtube...bad@ss machine
                      Reply
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                        Vijay S
                        Aug 29, 2014 at 12:30 pm
                        That's what expected from Modi Ji
                        Reply
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                          v raju
                          Aug 31, 2014 at 6:24 pm
                          The in-efficient and in-competent defense minister Mr. Anthony put India behind by two decades in military power by his indecisiveness.well done Modiji. In this 197 Light Utility Helicopter deal also public sector should be kept away and private sector should be encouraged to build strong and sustainable aerospace base in the country.
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