Saturday, October 9, 2010

Hunt begins for refuelling aircraft

New Delhi: Almost nine months after cancelling a contract to buy a new fleet of mid-air refueling aircraft, the Defence Ministry has started a new hunt, with tenders for a fresh procurement being sent to global aviation companies.

Fresh requests for proposals (RFP) have been issued to aviation firms in the US, Europe and Russia for six tankers that are expected to cost around $2 billion.

The fresh requests come after the earlier purchase bid hit a nasty roadblock last year. The Finance Ministry had objected to the high cost and lack of commercial competitiveness in the contract that led to the selection of the European Airbus 330 MRTT aircraft.

While the requirements have not been changed in the new tender, life cycle costs have been added to the RFP, sources said.

In the last selection round, only two companies — European Airbus (EADS) and Russian Rosoboronexport — made it to the trials. This time, more are expected to take part. “We have received the RFP and are conducting a detailed evaluation of the request and will make a decision based on that information,” Vivek Lall, vice-president, Boeing Defense, Space and Security, India said.

It will take at least two years for the Defence Ministry to select an aircraft as per the procurement policy.

As first reported by the Indian Express, the previous contract was put on hold in September last year after the Finance Ministry questioned the need to purchase a new fleet of tankers other than the IL 78s already in service and objected the high price of the European aircraft.

The contract was finally cancelled in January, coming as a major blow to European consortium EADS which was very close to bagging the estimated $2 billion deal to supply six refueling aircraft for the Indian Air Force.

In February, Defence Minister AK Antony revealed that despite repeated requests by the Air Force, the Finance Ministry scuttled a mega tender but cleared another contract to procure VVIP choppers because of ‘changed security scenario’.

Antony said the controversial cancelling of the tanker contract, in which European aircraft Airbus 330 MRTT had been chosen, took place after the Finance Ministry categorically refused to support the deal in a meeting of the Cabinet Committee on Security (CCS).

Antony said the Defence Ministry sent the tanker contract for clearance thrice to the Finance Ministry but was forced to withdraw it due to the Finance Ministry’s disapproval. “We had sent it to the Finance Ministry three times. Unless Finance Ministry agrees to take it up with CCS, we cannot go ahead. Finance ministry told us categorically they will not support it (in the CCS),” Antony had said.

The Finance Ministry had pointed out that the IAF already operated a fleet of the IL 78 refueling aircraft, the last of which was inducted in late 2004, making it easier to induct a larger number of the aircraft.

The IAF, however, made it clear that it was not in the favour of continuing the Russian origin IL 78 aircraft as its mid-air tanker of the future. The Russian aircraft was the only other contender in the ongoing contract but was rejected by the IAF, which found the Airbus a superior tanker.

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