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India Cancels $1 Billion Light Helicopter Tender

Aug. 29, 2014 - 10:13AM   |  
By VIVEK RAGHUVANSHI   |   Comments
An Indian Army Chetak helicopter makes a fly-past during a National Cadet Corps parade in New Delhi. A competition to replace Indian Chetak and Cheetah helicopters has been canceled.
An Indian Army Chetak helicopter makes a fly-past during a National Cadet Corps parade in New Delhi. A competition to replace Indian Chetak and Cheetah helicopters has been canceled. (Prakash Singh/ / AFP)
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NEW DELHI — India has canceled the purchase of 197 Light Utility Helicopters (LUH) worth $1 billion in which Airbus Helicopter’s AS550 was competing with Russia’s Ka-226T built by Kamov. The cancellation followed lengthy corruption investigations.

Cancellation of the LUH helicopter program, which was a re-tender from an earlier cancellation, would hamper Indian Army logistics operations in the Himalayas above 20,000 feet. The Army has been waiting eight years for new helicopters to replace aging Cheetah and Chetak platforms, said an Army official.

The Cheetah and Chetak helicopters, made by state-owned Hindustan Aeronautics Ltd. under license, are 40 years old and being flown beyond their age limitations, the Army official added.

The decision to cancel the LUH tender was made Friday by the Defense Acquisition Council, which is headed by the defense minister and is the highest Defence Ministry agency that makes decisions on weapon purchases.

“The move to cancel the LUH tender even at the cost of defense preparedness by the new government is contrary to expectations,” said defense analyst Nitin Mehta.

Last week, the Defence Ministry officially announced the imposition of a partial ban on purchases of weapons from Italy’s Finmeccanica and its subsidiaries in the wake of investigations by India’s anti-fraud agency, the Central Bureau of Investigation (CBI), into alleged corruption charges regarding the purchase of 12 VVIP helicopters by the Indian Navy in 2010 from AgustaWestland, a Finmeccanica subsidiary.

An MoD source said cancellation of the LUH tender comes after allegations of corruption against an Indian Army brigadier general, which surfaced last year during investigations into the VVIP helicopter program. The official allegedly promised to swing the LUH deal in favor of AgustaWestland. AgustaWestland, however, was eliminated at the technical evaluation stage in 2010.

The MoD source added that the CBI has leveled charges against the unnamed Indian Army brigadier general for his alleged involvement in manipulating the trial report of the LUH procurement.

The recent LUH tender was canceled after an earlier tender for LUH had already been canceled. In 2007, Eurocopter, with its Fennec helicopter, was on the verge of being declared the winner when US-based Bell Helicopter complained to the Defence Ministry about a lack of transparency in the procurement. The tender was canceled in 2008 and reissued in 2009. ■

Email: vraghuvanshi@defensenews.com.

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