MoD cancels contract for mid-air refuelling aircraft

The Indian Air Force will have to wait at least five more years to get a new fleet of mid-air refueling aircraft with the Ministry of Defence...

The Indian Air Force (IAF) will have to wait at least five more years to get a new fleet of mid-air refueling aircraft with the Ministry of Defence canceling an ongoing contract that had led to the selection of the European Airbus 330 MRTT aircraft.

As first reported by The Indian Express,the contract had been put on hold in September last year after the Finance Ministry questioned the need to purchase a new fleet of tankers other than the IL 78s already in service and raised objections to the high price of the European aircraft.

The cancellation of the contract has come as a major blow to European consortium EADS which was very close to bagging the estimated $ 2 billion deal to supply six refueling aircraft for the Air Force.

This is the third major contract in the past few years in which European firms were the frontrunner that have been cancelled at the final stage by the MoD. This is also the second blow to EADS after the army light helicopter deal,in which the consortiums Eurocopter was the frontrunner,was cancelled in 2007 due to a dubious selection procedure.

Earlier,British firm BAE had also lost out on a contract to supply 155 mm artillery guns to the Army after the deal was cancelled at the last minute due to technical issues. The combined value of the three deals is close to $ 5 billion.

Last month,Defence Minister A K Antony had hinted that the contract could be scrapped as the Finance Ministry had expressed certain reservations relating to the competitiveness of the bids and the reasonableness of the price.

While fresh bids will now be called and more contenders are expected to take part in the new process,European giant Airbus will still be in the fray for the contract. Its closest competitor will be Boeing,which is also offering a similar sized refueling aircraft.

Story continues below this ad

The Finance Ministry had pointed out that the IAF already operates a fleet of the IL 78 refueling aircraft,the last of which was inducted in late 2004,making it easier to induct a larger number of the aircraft.

However,the IAF has made it clear that it is not in favour of continuing the Russian origin IL 78 aircraft as its mid-air tanker of the future. The Russian aircraft was the only other contender in the ongoing contract but was rejected by the IAF which found the Airbus a superior tanker.