Good news for Uncle Sam, govt ditches Eurocopter

Americans had lobbied against the move

NEW DELHI: The ministry of defence on Thursday cancelled ongoing negotiations with the European Aerospace and Defence Systems (EADS) for the purchase of 197 helicopters worth almost Rs4000 crores ($1 billion), leaving the Army worried, the Europeans upset and the Americans rejoicing.

The decision comes at the end of several months of aggressive, in-your-face lobbying by the American Bell Aircraft Corporation, which had lost out to the European firm’s Eurocopter during technical trials. Fielding high-level American officials and diplomats in a high-voltage PR campaign, much of it factually inaccurate, the American firm has been mounting intense pressure on the government demanding that the negotiations be scrapped. Bell had even hired the services of NR Mohanty who as HAL chief was involved in the initial negotiations by the government.

Curiously, the decision comes at a time when the internal political situation has created uncertainty about the Indo-US nuclear deal, and Indo-Russian relations have nose-dived.

Sources among the Europeans here told DNA the decision would anger the German and French governments, who have stake in EADS.

The decision comes after Prime Minister Manmohan Singh assured German chancellor Angela Merkel in the last week of October that the deal was on.
 
Also, it comes a few days after Indian defence secretary Vijay Singh was told in an official communication by his French counterpart that they hope to sign the deal when French president Nicolas Sarkozy comes to India next month as the chief guest of the Republic Day parade.

Defence officials said the decision was taken “as it was felt that the field trials were vitiated” by the fact that the European Consortium EADS had “offered the AS 550 C3 model with an ARRIEL 2B in their Request for Proposal, but sent for trials the AS 350 B3 model with ARRIEL 2B 1 engine. “Such a deviation can be approved only by the RM (Raksha Mantri) after it goes through the Defence Procurement Board, which was not done in this case,” MoD officials explain.

However, the Army and the EADS had different explanations. The Army Aviation Directorate, according to a dependable Army source, had clarified as late as last Thursday to the ministry that both the contenders — EADS and Bell — had fielded civilian versions because the Indian Army had not finalised its armaments. According to official documents available with DNA too, it is clear that early in 2005, when the field trials were beginning, the aspect of civilian helicopters being fielded was recorded and clarified.

The EADS in a statement on Wedneasday had said, “The AS350 B3 civilian version presented by Eurocopter in India is exactly the same helicopter as the AS550 C3 military version in terms of airframe, systems, main gear box, rotor head, blades, engine and performances. In the same manner Bell has presented its civil version the B407 for trials in India.”

Dismissing the entire exercise as “hair splitting”, a senior Army officer said it would now take at least three to four years for the new process. In the meanwhile, “we will have to stretch the old helicopters further to sustain many of our posts in places like Siachen, if that is possible.”

The MoD says it referred the file to the Central Vigilance Commission, which “concurred with the views of MoD that there were major deviations from the approved parameters in terms of both engines and platforms. Consequently, the MoD has now directed the Army to float a fresh RFP for the helicopters.”

What adds further curiosity to the entire affair is the fact that for months now some MoD officials have been informally claiming that the contract was being cancelled. This when the file was yet to be referred to the CVC, the Defence Minister and the secretary were yet to be apprised. And the claim of the cancellation was being made when the ministry was carrying on technical and offset negotiations with the EADS.