Agence France-Presse, India’s army may scrap a $600 million deal for 197 helicopters from an EADS unit because of complaints about the bidding process and the role of agents, an official said Dec. 2.
India’s policy-making Defence Acquisition Committee is expected to issue a fresh tender for the helicopters in the next financial year, said an official with the committee who did not want to be named.
An Indian army spokesman declined comment on the deal, awarded in February 2007 as part of an army modernization program.
The official said New Delhi was probing links between an army general and Indian agents of Eurocopter, part of the European Aeronautic Defence and Space Company, which makes civil and military aircraft.
The deal was suspended in June 2007 on the recommendation of a federal watchdog overseeing major government purchases.
“Some aspects of the deal probed by the Central Vigilance Commission also included complaints from (U.S.-based) Bell Helicopter that it had been rejected on flimsy grounds,” the committee official said.
“There are elements of truth in the complaints, especially the one involving an officer who was part of the evaluation committee while his brother headed the company that is Eurocopter’s sole distributor in India,” he said.
India banned middlemen in military deals following allegations of bribery in a multi-billion dollar artillery deal in the 1980s that brought down the government of former premier Rajiv Gandhi.
Military observers say the cancellation would deliver a blow to EADS, which views India as major client for Airbus passenger planes among other things. It plans to invest 2.5 billion dollars over 15 years in research and production here.
An Eurocopter spokesman earlier declined comment on the allegations, but said the firm did employ agents.
“We do not have a family tree of all people working with Eurocopter,” the Indian Express newspaper quoted the spokesman as saying.
“We have hundreds of agents and representatives across the world,” the spokesman added.
Eurocopter has also been accused by the vigilance commission of not providing the right helicopter for use in field trials and did not closely monitor the implementation of the deal, the official said.
“Eurocopter acted more as the buyer than a supplier in this particular deal,” the official said.
Several firms bid for the contract, including Russian helicopter-maker Kamov, which dropped out in 2004.
Indian defense specialists selected the Eurocopter 350B3 light reconnaissance model over Bell’s LongRanger, which cost less, after an intensive testing period.
The Indian army also wants to buy 285 heavy- and medium-lift helicopters to replace the bulk of its fleet of 500 Soviet-era machines.
The military establishment, which invited tenders earlier this year for 126 fighter jets worth $10 billion, has emerged as one of the biggest buyers of armament products among developing countries.
