Indian Govt scraps Rs 17,000cr army helicopter deal

[KENT]

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Govt scraps Rs 17,000cr army helicopter deal

Press Trust of India / New Delhi December 6, 2007



The government today scrapped a Rs 17,000 crore helicopter deal with European aviation consortium, Eurocopter, accusing it of "deviating from approved parameters" of the choppers urgently required by the army."A fresh request for proposals (RFP) would be issued shortly," defence ministry spokesman Sitanshu Kar said.Eurocopter and US firm Bell Helicopters were shortlisted for the contract, which visualised purchasing 60 helicopters off the shelf and another 137 being manufactured in India under technology transfer.The cancellation comes at a time when the $4 billion deal was almost at the finalisation stage with defence ministry officials carrying out price negotiation with the France-based company.This is the second major defence deal to be scrapped this year. Earlier, the defence ministry had cancelled international tenders for the Rs 4,000 crore deal to purchase 400 upgraded 155mm .52 caliber guns for the army.Eurocopter had earlier in the day claimed that it was very much in contention in the race to acquire 197 light helicopters and was expecting the deal to be finalised in the "coming weeks".


http://www.business-standard.com/com...N&autono=30966

[Neo]

India scraps $600m helicopter deal

* Deal called off over corruption allegations
* Indian army may have to wait three years to replace aging choppers

By Iftikhar Gilani

NEW DELHI: India on Thursday scrapped a 600 million dollar deal with Eurocopter, a French-German-Spanish consortium to buy 197 light helicopters for the Indian Army, following allegations of corruption.

Involvement of a retired general as the middleman in the deal had shocked the government as middlemen are banned in the defence deals since after the multi-million dollar Bofors kickback scandal resulting in downfall of the Rajiv Gandhi’s government. The order was suspended in June while the decision to cancel it was taken by the defence ministry on the recommendation of the Central Vigilance Commission (CVC) that confirmed irregularities in the bidding process. The ministry had asked the CVC to examine the deal.

Army to wait: Fresh tenders will be issued after April and the Indian Army may have to wait for another three years to replace its aging fleet of Cheetah and Chetak helicopters under a sanctioned modernisation programme as the entire selection process has to be repeated before placing the order. Discrepancies in the selection process to give an alleged unfair advantage to the Eurocopter over the only other contender, US-based Bell, had formed the basis of the investigation

CVC inquiry further unearthed the alleged role of the middleman. The US government had officially complained twice about discrimination against Bell in finalising the deal. Confirming cancellation of the order, a defence ministry spokesman said “The government has decided to cancel the Request for Proposal (RFP) for 197 helicopters for the army. A fresh RFP will be issued soon.”

A complaint by Bell along with one by the US government that its bid was rejected on flimsy ground also weighed in the CVC recommending scrapping of the order, besides the allegation of the retired general’s role as a middleman in the deal. The order was put on hold in July following allegations that retired Lieutenant General SJS Saigal, head of Global Vectra Helicorp and Vector Aviation, the sole distributor of Eurocopter in India is brother of Lt Gen HS Sehgal, who was closely involved in the year-long field trials to evaluate the Eurocopter and Bell machines.

The cancellation of the order would deliver a blow to EADS, which had listed India as a major client for its Airbus passenger planes and has even plans to invest 2.5 billion dollars over 15 years in research and production in collaboration with the Hindustan Aeronautics LimitedThe Indian army also wants to buy 285 heavy and medium-lift helicopters to replace the bulk of its fleet of 500 Soviet-era machines.

Daily Times - Leading News Resource of Pakistan

[BATMAN]

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Long time ago, I once read a bussiness quote, don't remember it exactly but it was some thing like:
'A sales deal is never lost, it is simply taken over by some one else'
Some one familiar with the quote is more than welcome to correct it in its orignal form.
Thanking in anticipation