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Eurocopter still hopeful of mega Indian Army deal

The deal for 197 military helicopters was aimed at replacing the Army's ageing fleet and was expected to be signed as a highlight of French President Nicholas Sarkozy's visit to New Delhi.

business Updated: Dec 18, 2007 17:49 IST
YP Rajesh

Eurocopter, the world's top helicopter firm, mounted a strong defence on Tuesday of a cancelled $600-million bid to sell military choppers to India, and said it remained optimistic of the deal going through.

The deal for 197 military helicopters was aimed at replacing the Army's ageing fleet and was expected to be signed as a highlight of French President Nicholas Sarkozy's visit to New Delhi early next year.

But earlier this month, the Indian defence ministry said it would request fresh bids in two or three months without giving a reason, even as price negotiations were on with Eurocopter, a subsidiary of European aerospace group EADS.

Indian newspaper reports, quoting defence sources, said the deal had collapsed due to a violation of bid terms by Eurocopter and the illegal use of middlemen to push it.

Eurocopter had not received any official communication from New Delhi that the deal was off, said Norbert Ducrot, the firm's senior vice-president for sales and customer relations in the Asia-Pacific region.

"We never changed our technical aspects in any respect, we never changed our proposal," Ducrot told a news conference. "As far as we are concerned, all trials have been approved by the Indian ministry of defence."

Eurocopter was dealing directly with the Indian defence ministry for military contracts and had no middlemen, in strict compliance with New Delhi's policy that bans brokers in arms deals, he said.

Asked about the likelihood of the contract being signed during Sarkozy's visit, Ducrot replied: "I am always optimistic."

Indian defence officials were not immediately available for comment.

Civilian Vs Military

India has forged strong defence ties with France in recent years, sourcing Mirage jets and Scorpene submarines in mega deals to modernise its military, the world's fourth largest, about 70 per cent of whose equipment is of Russian origin.

Indian civilian airliners, including state-run Air India, have also placed large orders for planes with Airbus, also made by EADS.

India, the developing world's top arms buyer this decade, is also being wooed by the United States as the two countries overcome years of estrangement and build strategic ties.

The US Bell helicopter unit of Textron Inc was the other contender for the deal which was floated in 2001 and given to Eurocopter in February this year.

Indian defence deals have come under a cloud frequently due to charges of irregularities in the bidding process, use of middlemen and payment of commissions.

The Indian newspaper reports, which a defence spokesman had said were "more or less correct", had accused Eurocopter of using a civilian helicopter for trials while the Indian Army was looking to buy a military aircraft.

But Ducrot said there was no difference between the two versions.

"As far as performance is concerned and technically the two helicopters are the same. It is just a question of the nomenclatures," he said. "The request for proposal did not ask for the military version to be fielded for trials in India."