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Govt gives push to Make in India project, opens tech bids for Rs 21,000 crore defence deal

Three manufacturers, Airbus, Sikorsky and Kamov, have submitted bids for the 111 Naval Utility Helicopters. This is the government's first defence procurement under the new Strategic Partnership (SP) Model.

twitter-logoBusinessToday.In | June 4, 2019 | Updated 15:48 IST
Govt gives push to Make in India project, opens tech bids for Rs 21,000 crore defence deal
The 111 utility helicopters to be procured are meant to replace the Chetak Helicopters

The government's first defence procurement under the new Strategic Partnership (SP) Model reached second base on Monday with the opening of the technical bids for the 111 Naval Utility Helicopters (NUH) for the Indian Navy. The model envisages indigenous manufacturing of major defence platforms by an Indian private sector strategic partner that will collaborate with global original equipment manufacturers (OEMs), acquire niche technologies and set up production facilities in the country. Hence, the over Rs 21,000 crore acquisition, approved last August, is also the Modi 2.0 government's first major Make in India initiative in the defence sector.

The utility helicopters - meant to replace Chetak Helicopters - will operate from its frontline warships and will be used in attack missions as well as for rescue and surveillance operations. Sources in the know told The Economic Times that three foreign manufacturers have submitted bids for the programme - European aviation firm Airbus, US-based Sikorsky Aircraft Corporation (under Lockheed Martin) and Russia's Kamov. Airbus seems to have an edge since it is offering two platforms - the H 145M and the Panther AS565 - for local manufacturing in partnership with Mahindra Defence. The rivals have offered the Sikorsky S 76D and the Kamov Ka 226T for the mega project.

State-run aerospace major Hindustan Aeronautics Limited (HAL), which recently posted an all-time high turnover of Rs 19,705 crore for FY19, is reportedly separately pushing for the naval version of its Advanced Light Helicopter (ALH) for the contract.

In the next step, the Indian Navy will check the technical bids for compliance with its requirements. This process is expected to take two months, following which the choppers will go through exhaustive field trials to evaluate their performance. In tandem, the Navy is also vetting the credentials of the Indian manufacturers that had submitted Expressions of Interest (EoI) to be the local partners for the project. The Request for EoI from domestic companies had been put up on the Ministry of Defence and Indian Navy website in February 2019.

The ministry has several financial and technical parameters to shortlist Indian companies that will be considered for the bidding process, including criteria of a net worth of at least Rs 800 crore, a revenue of Rs 1,800 crore and a proven capability of delivering mega projects in the past. The domestic players currently being vetted are Tata Aerospace and Defence, Mahindra Defence, Reliance Defence, Adani Defence, HAL, Bharat Forge and Lakshmi Machine Works.

"The final step will be a formal request for proposal where the shortlisted Indian companies will make a commercial offer in partnership with the shortlisted foreign vendor," an official told the daily. The government hopes that the Indian Navy would have shortlisted both foreign and local vendors by the last quarter of 2019.

Given the size of the deal, Airbus has already thrown in a sweetener to land it. In April, Pierre de Bausset, president and managing director of the Airbus Group in India, announced that his firm has offered to set up a global manufacturing hub for its Panther helicopter in India if it bags the deal.

With PTI inputs

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