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June 8, 2013

IAF to close deals worth $25 bn this fiscal including MMRCA, Boeing Apache Longbow helicopters


Deals worth $25 billion are expected to be closed by the Indian Air Force (IAF) this fiscal, its largest ever procurement. These include the long-awaited $20-billion 126 MMRCA, three C-130J special-operations planes (as a follow-on order), 22 Boeing Apache Longbow strike helicopters ($1.2 billion), 15 heavy-lift Boeing CH Chinook helicopters ($1.4 billion) and six European A-330 MRTT ($2 billion) mid-air refuelling tanker planes. Air Chief NAK Browne said: “IAF is witnessing an unprecedented phase of modernisation. Capability enhancement can be seen across the spectrum. Five major deals estimated at $25 billion are slotted to be closed this fiscal.”
Sources told FE: “Talks are on for a follow-up order for six more C-130J from Lockheed Martin. Orders for three have been placed. Also, the IAF is expected to get 10 Boeing C-17 Globemaster III heavy-lift aircraft at $5 billion. The delivery of the aircraft is scheduled between June 2013 and June 2015. Like in the case of C-130J, IAF also plans to increase its C-17 fleet by 10 more such planes.”
The IAF is also inducting 139 Russian Mi-17 V-5 medium-lift helicopters for an estimated $2.4 billion. The workhorse Mi-17 has been in service for decades, but the new-model, V-5, is a vastly superior machine with new engines, rotor blades and avionics. An IAF order for 80 Mi-17s is already being delivered, which is likely to be followed by an order for 59 more.
As part of its modernisation plans, earlier in May, the ministry of defence issued a Request for Proposals (RfP) to eight foreign aerospace vendors, inviting tenders for co-producing 56 medium transport aircraft to replace the aging fleet of Hawker Siddeley 748M Avro aircraft. The deal could be worth about R28,000 crore.
Among the companies invited to bid are Boeing of the US, Ilyushin of Russia, Antonov of Ukraine, Franco-German consortium EADS and Alenia Aeromacchi of Italy. As reported earlier by FE, the pre-bid meeting will take place on June 19. The MoD has given bidders five months to choose and tie up with an Indian Production Agency (IPA) and submit their “techno-commercial proposals”. Of the total capital outlay of R86,741 crore for new buys this fiscal, finance minister P Chidambaram has allocated the maximum for IAF (R38,558 crore), followed by Army (R17,822 crore), Navy (R9,626 crore) and Defence Reseach and Development (R5,058 crore)

Financial express

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