The contract, for the supply of 100 light utility helicopters by the Indian Navy, is estimated to be worth around $2 billion. (Reuters)
In a relief to Italy-based AgustaWestland, which is currently being probed by the Central Bureau of Investigation (CBI) regarding an alleged graft case, the government has decided to allow the firm to bid for a naval utility helicopter (NUH) contract on the condition that it ties up with a local vendor.
The contract, for the supply of 100 light utility helicopters by the Indian Navy, is estimated to be worth around $2 billion.
According to sources, the defence ministry’s decision to let AgustaWestland, a Finmeccanica Group company, to participate in the bidding is in sync with the six conditions laid down by the government when Arun Jaitley held the defence portfolio to deal with this group of companies for all procurement deals. What also helped the firm is the defence ministry’s intent to promote the ‘Make in India’ campaign unveiled by Prime Minister Narendra Modi that aims to push local manufacturing, including in the defence sector.
“The company has got a lifeline on the grounds of a ministry of defence proviso under which AgustaWestland and its parent company, Finmeccanica, can bid for defence business, not as prime contractors but as partners or sub-contractors to principal vendors,” a source privy to the development told FE.
The Anglo-Italian defence firm is fielding the AW-109 helicopter in response to the navy’s request for information (RFI) for the NUH contract and has submitted its proposal with Bharat Forge, another source told FE. However, the Kalyani Group firm could not be reached for confirmation of its tie-up with AgustaWestland. The deadline for the RFI response was February 28.
The 100 helicopters that would become part of the Indian Navy are under the ‘Buy and Make in India’ category of the Defence Procurement Procedure 2013, where the company would buy a foreign design that would be assembled in India by local partners. Entities including the Tata Group, Anil Ambani’s group firm Reliance Defence and Aerospace, Axis Aerospace, Bharat Forge, Hindustan Aeronautics (HAL) and Larsen & Toubro are among those who have sent in details about the original equipment manufacturer to the defence ministry.
Indian banks are facing a staggering amount of bad loans accumulated over the last three years as a slowdown in the economy and the government’s tardiness in giving clearances brought many big projects to halt.
In contrast to popular perception that small loans and those to weaker sections run the biggest risk of turning bad, the agricultural loan book of banks has seen a slower rise in NPAs compared with that of the corporate loan book.
In 2012, both the Indian Navy and Coast Guard had issued a request for proposal (RfP) for utility helicopters. In 2014, however, the BJP-led government cancelled the competition and restarted it under different terms, which will require full manufacturing in India. A fresh RFI was issued last year, which was extended by a couple of months.
It may be recalled that in its previous avatar, the NUH was a ‘Buy Global’ RfP and only AgustaWestland and Eurocopter (now Airbus Helicopters) had responded. Airbus Helicopters is in the race with the AS565 Panther. In fact, according to industry sources, AgustaWestland and Airbus Helicopters are the two most serious contenders for the NUH programme.
India’s premier investigative agency CBI is looking into the 556-million-euro deal for supplying 12 AW-101 VVIP helicopters to the Indian Air Force where AgustaWestland is alleged to have paid a bribe to middlemen in India and abroad get the deal. However, an Italian court last October unequivocally exonerated former AgustaWestland executives Giuseppe Orsi and Bruno Spagnolini.