Ukraine Misses Deadline, Lone Bidder Remains for Indian Aircraft Compe

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    Sep 22, 2012
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    Ukraine Misses Deadline, Lone Bidder Remains for Indian Aircraft Competition

    NEW DELHI — A blown deadline by Ukraine’s Antonov means that a joint venture between Airbus and Tata Group has emerged as the sole bidder in a $3 billion deal to sell 56 military transport aircraft to the Indian Air Force, according to an Indian Defence Ministry source.

    Airbus Defence and Space has tied up with India’s Tata Advanced Systems Ltd. for the program to replace India’s fleet of Avro transport planes. The MoD refused to give Antonov an extension on its bid after it missed the Oct. 22 deadline.

    The Avro replacement program is the MoD’s first attempt to involve only domestic private-sector companies — in the process sidestepping state-owned Hindustan Aeronautics Ltd. (HAL).

    The source added that the MoD is unsure whether to award the contract to Airbus, since it awards contracts to single vendors only in exceptional cases.

    Airbus and Tata announced their joint bid on Oct. 28. They plan to offer the Airbus C-295 to the MoD, but neither company would comment.

    The Air Force, fearing that the tender could be canceled, has asked the MoD to ignore its practice of canceling bids in single-vendor situations and award the contract to the Airbus-Tata team, the source said. An Air Force official agreed that this is an exceptional case.

    In July, Antonov informally told the MoD that it could not transfer technology of its AN-148 aircraft, as the majority of the systems are sourced from Russia’s Voronezh Aircraft Production Association. The Russian company has stopped exporting those technologies to the Ukrainian company.

    Other recipients of the tender, issued in May 2013, were Alenia Aermacchi, Boeing, Lockheed Martin, Ilyushin and Embraer.

    However, the procurement process was stopped by the former government, after Praful Patel, minister for heavy industries and public enterprise, complained to former Defence Minister A.K. Antony that HAL should be included in the program.

    In July, the new government set aside the complaint and excluded HAL from the competition.

    Under the Avro replacement program, 40 aircraft would be license-produced in India and the remaining 16 would be imported.

    A senior executive with domestic private firm Larsen & Toubro, which was also negotiating to team with an original equipment manufacturer, said the small size of the program could make it economically difficult.

    “Building only 40 aircraft is a major challenge,” the executive said. “This is so because the program requires a very heavy investment, is capital-intensive and highly complex as no Indian private sector company has ever manufactured, assembled and tested a complete aircraft on its own to date. It is not viable for amortizing the complete investment over these small numbers.”

    The executive said he hoped the order would be increased.

    “There is a huge risk for the original equipment manufacturer and its Indian production partner if that does not happen,” he said. ■

    Ukraine Misses Deadline, Lone Bidder Remains for Indian Aircraft Competition | Defense News |

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