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HindustanTimes Wed,20 Aug 2014

VVIP chopper deal: Italy's loss could be Russia's gain

Rahul Singh, Hindustan Times  New Delhi, February 17, 2013
First Published: 00:19 IST(17/2/2013) | Last Updated: 02:12 IST(18/2/2013)

Russia may end up the big winner if India’s cancellation of the Rs. 3,760-crore helicopter contract with AgustaWestland goes through.

Top air force sources said India would consider going back to Russia to acquire a new VVIP fleet to replace its ageing Russian-made Mi-8 choppers of 1970s vintage, due to be phased out next year. A fresh global tender may not be floated as this could delay the process by seven to eight years, as reported by HT on Saturday.

All military purchases have to be made through competitive bidding. However, switching to a new vendor, Russia in this case, would not require tendering as this would be considered a “follow-on” order since India has already booked 80 Mi-17 V5 choppers. More than 20 of these have already been inducted.

“The air force can’t afford to wait another seven years. The Mi-8s, modified for VVIP use in India, were upgraded in 2009-10 to keep them flying till 2014. We have no choice but to turn to the Russians if we are to maintain a VVIP fleet in the current scenario,” a source said.

India ordered 80 Mi-17 V5 helicopters from Russia in 2008 for $1.4 billion ( Rs. 7,700 crore). The follow-on clause was invoked to buy 59 more choppers for $1 billion ( Rs. 5,500 crore). That order could be expanded.

“The Mi-17 V5s can be upgraded in India for VVIP requirements as was done with the Mi-8s,” the source said.

The air force has been operating the Mi-17 platform since 1986.

The contract with AgustaWestland, a subsidiary of Italian defence group Finmeccanica, for 12 choppers was signed in February 2010 and three choppers have been delivered.

But allegations that the firm paid more than Rs. 375 crore in kickbacks have prompted the government in the last few days to initiate action to cancel the deal and announce a CBI probe.

This is a big setback to the IAF since the proposal to replace the Mi-8s — considered unsafe beyond 2,000 metres — was made a good 14 years ago.


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