NEWS
Indian Army’s hopes of replacing the ageing Cheetah and Chetak helicopters anytime soon have received a blow. Plans were afoot for the acquisition of 197 light helicopters for the Army. But allegations of irregularities in the trials of two contenders—Kamov and Eurocopter—has forced the Defence Ministry to order an independent probe into the evaluation process. The Defence Acquisition Council, headed by Defence Minister A.K. Antony has set up a Technical Oversight Committee (TOC) under a Lieutenant General to go into the flight evaluation process followed for the two contenders. The committee has been asked to submit its report within a month.

VIEWS
Allegations of irregularity, kickbacks, deviation from procedure and involvement of middlemen appear to have become routine in global tenders for procurement of defence hardware under the Defence Procurement Procedure (DPP). In an effort to replace the ageing fleet of Cheetah and Chetak helicopters of the Indian Army, a request for proposal (RFP) was floated by the Ministry of Defence (MoD) in 2003 for 197 light utility helicopters. Of the initial five contenders in the race, Eurocopter AS 550 C3 Fennec and the Bell-407 were the two shortlisted for flight evaluation in which the Fennec emerged as the preferred machine. However, in December 2007, the tender was cancelled by the MoD at the last minute following investigation into allegations by one of the contenders for wrongdoing. The investigation revealed that indeed there was deviation from procedure in flight evaluation in which Eurocopter had fielded the AS350 B3, the civilian version of the helicopter for high altitude trials instead of the AS550 C3 military variant. The company maintained that there really was no qualitative difference in the performance of the two machines, a contention, though logical, was not accepted by the MoD. Investigations also indicated the involvement of middlemen prohibited under the rules.

The sudden cancellation of the tender especially when it was in the final stages, sent shockwaves in the global aerospace industry as also impinged on the credibility of the Indian defence procurement system. What was more agonising was that over five years of laborious and expensive exercise by the vendors and the Army, proved futile. Incidentally, this was the second major defence tender to be cancelled by the MoD in 2007, the first being a Rs. 4,000-crore proposal for purchase of 400 upgraded 155mm artillery pieces for the Indian Army.

The tender for helicopters was floated a second time in July 2008. This time, the Indian Air Force (IAF) and the Indian Navy also joined in with their demands pushing the total requirement to 384 machines. However, for procurement from a foreign vendor, the figure of 197 machines was retained with the imported assets being shared amongst the three services. The responsibility to design and develop by 2017 a helicopter of the same class and performance was assigned to the Hindustan Aeronautics Limited. Initially, the company is required to supply a total of 187 for the three services as part of the initial order.

For the 2008 RFP, once again two machines were shortlisted for flight trials, the single-engine Eurocopter AS 550 C3 Fennec and the twin-engine Russian Kamov-226 Sergei. Surprisingly, Bell Helicopter that had filed a complaint in the first round did not participate this time. Flight trials on the two machines were completed in December 2010 and the report submitted. However, the tender process hit the first roadblock in November 2011 when the Defence Finance raised issues regarding deviation from RFP during flight evaluation wherein the capability of the machines to hover at an altitude of 6,000 metres was not tested. Considering this capability to be irrelevant as the requirement of the RFP was somewhat over-pitched, the MoD set aside the observation, ordering further processing of the tender.