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July 18, 2014

IAF Planes Tender Limited to Private Sector

The Ministry of Defence is all set to approve its earlier proposal to involve only Indian private sector firms in the manufacture of a replacement for 56 Avros transport planes.

At its first-ever meet under the new government on Saturday, the Defence Minister Arun Jaitley-headed Defence Acquisition Council will give its nod for the tendering process. The tendering process had got stuck in November following objections from then Heavy Industries Minister and NCP leader Praful Patel and some others over keeping out Public Sector Undertakings such as Hindustan Aeronautics Limited.

The high-level panel is also set to approve the extension of the bidding process for this key Indian Air Force acquisition till August 28.

In 2013, the UPA government gave approval to acquire 56 new transport planes worth `15,000 crore, of which 16 would be bought off the shelf from a foreign vendor, and the rest would be produced by an Indian company at its domestic facilities, following a technology transfer from the original equipment manufacturer.

The new cargo planes will replace the IAF’s near-obsolete fleet of Avro planes.

Among the foreign original equipment manufacturers that have got the tender papers are Ilyushin of Russia, Antonov of Ukraine, European consortium’s Airbus, Brazilian Embraer, Italian major Finmeccanica’s Alenia Aermacchi, American firms Boeing and Lockheed Martin and Swedish Saab. One of the unstated intention behind the government keeping this tender an “Indian private sector only” venture is to establish an domestic competitor to HAL, which has the only aviation manufacturing facility in the country.

Foreign original equipment manufacturers are to tie up with Indian companies. The ministry, under A K Antony, had decided to review its ‘private sector only’ tender to build 56 military transport planes. It had also extended the last date for the submission of bids by foreign original equipment manufacturers till a call was taken on including public sector companies as production agencies.

- Defence news

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