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Friday, November 21, 2014

Will Parrikar give go-ahead for single-tender Avro replacement bid?

By Anantha Krishnan M

Manohar Parrikar
All eyes are on India’s new Defence Minister Manohar Parrikar, who is set to chair his first Defence Acquisition Council (DAC) meeting in New Delhi on November 22. Among the crucial decisions to be taken by Parrikar, the 13,000-crore ‘private sector only’ Avro replacement project initiated by the UPA-2 regime would be the most-awaited one. Aimed at encouraging the private sector to take major lead in India’s aerospace and defence programmes, the project envisages the delivery of 56 medium transport aircraft to the Indian Air Force (IAF), under the ‘Buy and Make’ category.
The decision to keep PSUs like aviation major Hindustan Aeronautics Ltd (HAL) at bay from the tendering process has already ran into trouble. The tender was issued during A K Antony’s regime in May 2013 and was strongly opposed by some of his Cabinet colleagues as well. The tender had sought foreign OEMs (Original Equipment Manufacturers) to identify an Indian partner other than HAL, to supply 16 aircraft from their original facilities and provide ToT (Transfer of Technology) for manufacturing the remaining 40 aircraft by the Indian partner.
As per the tender, foreign OEM would remain as the main contractor and the Indian partner would only remain as a vendor. The contract, when finalised, will be signed between the OEM and the IAF. The tender has so far been extended several times with the foreign OEMs failing to identify a capable Indian partner. Finally, the Tata-Airbus consortium (Airbus Defence & Space and Tata Advanced Systems) now remain as the single vendor, offering the Airbus C295 as a replacement to the Avros.
While the Defence Procurement Policy (DPP) prohibits clearances of defence projects under single tender, sources tell OneIndia that DAC can overlook the rulebook taking into account the ‘existing exceptional situation.’ If Parrikar uses this ‘special route’ to bring in the Airbus C295, it might be seen as a deviation from Prime Minister Narendra Modi’s strong ‘Make in India’ pitch. However, those supporting Airbus C295 would argue that a major work share will be done in India thereby fulfilling PM’s Make in India dream.

Also read:

* Make in India campaign in focus
* Choose independent directors carefully, MoD told 
* We should be allowed to compete, says HAL
* Future bids will be different, says expert
* About Defence Acquisition Council (DAC) 

Full report on OneIndia here: http://bit.ly/11Kny1q

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