Article Posted on : - Oct 15, 2014

NEW DELHI (PTI): A tender for procuring 56 naval helicopters from abroad at an estimated cost of Rs 9,000 crore was on Tuesday scrapped by the Indian Defence Ministry which decided to get them manufactured in India by local players with foreign collaboration.

This is the third helicopter tender in the recent months to have been scrapped by the Indian government since the cancellation of Rs 3600 crore VVIP chopper deal with Anglo-Italian firm AgustaWestland in the wake of bribery allegations on January one this year.

The tender for procuring 56 Naval Utility Helicopters has been scrapped and a fresh acquisition process would be initiated where these choppers would be made in the country involving Indian manufacturers who will be allowed to partner with the foreign vendors, Defence Ministry sources told PTI here.

Two contenders were in the race for this Rs 9,000 crore tender including the European Airbus Helicopters and AgusstaWestland and they have been intimated about the decision, the sources said.

The Navy had plans of using these choppers for replacing its ageing fleet of Cheetah and Chetak helicopters, which have been in service for over 30-35 years.

The tender was issued two years ago by the Navy for procuring twin-engine choppers and was sent to major chopper makers including US firm Sikorsky, Eurocopter, Kamov and Italy's Agusta Westland.

In the tender, the navy has specified that the 4.5 tonne helicopters should have twin-engines to allow them to operate in rough sea conditions.

The decision to get the naval helicopters built in India is in line with Narendra Modi government's plans to encourage and build the manufacturing capabilities of the Indian private sector.

The government recently raised the cap for foreign investment in defence sector from 26 per cent to 49 per cent.

The Defence Ministry had scrapped the Rs 3,600 crore VVIP chopper tender on January 1 this year on the charges of breach of pre-contract obligations and payment of kickbacks allegedly by AgustaWestland to secure the deal.

The government had recently also scrapped the tender for buying 197 light choppers for the Army and the Air Force in a meeting of the Defence Acquisition Council couple of months ago.

The 197 chopper tender also had an AgustaWestland link as it was alleged that a Brigadier had sought Rs 5 crore bribe from the firm for helping it to bag the contract.

However, due to the frequent cancellations and delays in the finalisation of the contracts for replacing the vintage Cheetah/Chetak chopper fleet, the cost of acquiring these choppers has gone up significantly.