$600 mn helicopter deal crashes | india | Hindustan Times
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$600 mn helicopter deal crashes

india Updated: Dec 07, 2007 04:32 IST
Jatin Gandhi
Jatin Gandhi
Hindustan Times
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Acting ON allegations of corruption during the procurement process, the Defence Ministry has called off a likely deal worth $600 million for the purchase of 197 helicopters from the European consortium Eurocopter, for the Army's Aviation Corps.

“The government has decided to cancel the RFP (request for proposal) and a fresh RFP will be issued soon,” ministry spokesman Sitanshu Kar said on Thursday.

Sources said a fresh RPF will be issued early next year, and indicated that the entire procurement process will likely take about two years from the time the tenders are issued. This sets back the Army’s modernisation plan and the replacement of its ageing fleet of Cheetah and Chetak helicopters by more than two years.

Eurocopter, the helicopter arm of the European Aeronautic Defence and Space Company (EADS), which makes civil and military aircraft, was on the verge of clinching the deal. However, a senior Army officer who inspected the trials was later found to be a relative of the company’s Indian agent.

Both the Army and Central Vigilance Commission (CVC) are now probing the officer’s links.

Yet another anomaly came to light during the ministry’s internal investigation into the matter. While Eurocopter had offered the Army the AS 550 C3 Fennec helicopter for sale, it sent a civilian version for the trials, an officer said on condition of anonymity.

“The CVC concurred with the views of the ministry that there were major deviations in terms of both engines and platforms,” the Press Trust of India quoted sources as saying.

Furthermore, according to the PTI report, the trials were conducted without clearance from the defence ministry. Officials said that such a deviation can be approved by the defence minister, after the proposal goes through the Defence Procurement Board, but it was not done in this case.