Negotiations between India and Eurocopter on a $500 million contract for 197 military helicopters have been suspended, with defence ministry sources saying a fresh tender could be issued because of alleged irregularities in the original selection process.
New Delhi started price negotiations with EADS subsidiary Eurocopter, which is offering the AS550 Fennec, around June after disqualifying the Bell 407 on technical grounds. However, it now appears that Eurocopter used the AS350 B3 Ecureil, the civilian variant of the AS550, for the trials. While both aircraft are similar, defence ministry officials say that the trials should have been conducted with the actual helicopter that India will buy.
"There has definitely been some rethinking," says an official source. "The ministry has been taking a closer look at Eurocopter's bid since September and there are some red flags." Ministry officials are deciding on the next course of action, with a second source saying negotiations are likely to be cancelled and fresh bids invited in a few months. Given past controversies relating to Indian military procurements and defence minister A K Antony's comments in recent months that transparency is essential in all deals, an investigation into the episode could also take place.
This is not the only issue facing the competition, according to the Indian media. An official with Eurocopter's agency in India is supposedly related to a senior member of the selection committee, and they speculate that this possible conflict of interest has also caused consternation in the ministry.
Bell and the US government have also been urging New Delhi to issue a fresh tender, arguing that the 407's disqualification was unwarranted. Sources familiar with the bid say that the 407 was rejected as the helicopter that took part in the trials did not have a heavy winch and was unable to perform certain manoeuvres. They add that the company did not get a response to a letter it sent to the selection committee saying that it could provide a heavy winch and inviting Indian officials to come to Canada for further trials.
Eurocopter and Bell will both be allowed to take part in any fresh tenders, say the sources. Italy's AgustaWestland and Russia's Kamov and Kazan were also in the fray before being excluded from the shortlist, and it is not clear if they would be invited to take part.
India's army urgently needs the helicopters to replace its ageing 1970s-vintage Chetak and Cheetah aircraft. Under the terms of the competition, 60 helicopters will be bought in a fly-away condition while the remaining 137 to be licence-produced by Hindustan Aeronautics. Under India's offsets policy, 30% of the contract's value must be reinvested in the country.
Source: Flight International
