Monday, 6 April 2015

TWO FOREIGN COS SHOW INTEREST IN AVRO REPLACEMENT PROGRAM



Two foreign firms have written to the Defence Ministry expressing their interest to be part of the nearly USD 2.5 billion Avro replacement programme even though they had stayed away from the original bidding process.

Both the companies have offered to set up their respective platforms in India with local partners to meet the IAF requirement for the replacement of the ageing fleet of 56 Avro transport aircraft, defence sources said.

Analysts said that the development will not have any "direct" bearing on the lone bid by the Airbus-TATA consortium as other companies cannot be brought into the middle of an ongoing process.

A committee set up by Defence Minister Manohar Parrikar to look into the lone bid has already submitted its report. The committee was looking into the details and procedures of the bid since only one consortium responded to the Request for Proposal (RFP) for the Avro replacement programme.

Defence sources said that the committee in its report last month suggested various changes to attract greater private sector participation. The Defence Acquisition Council, to meet later this month, is likely to take a call on the project.

One of the options is to go for re-tendering in which the Indian companies become the main player rather than the foreign ones. Under the current defence procurement policy, a single- vendor situation is not to be entertained unless cleared by the DAC.

Another option is to put the project on hold and go ahead with the joint development and production of a 'Multi-role Transport Aircraft' with Russia, defence analysts said.

In May, 2013, the ministry had issued an RFP to original equipment manufacturers, including US firms Boeing and Lockheed Martin, European multinational Airbus Defence and Space and Antonov of Ukraine, among others. They were required to tie-up with an Indian private firm to produce 40 of the aircraft in the country while the remaining 16 were to be bought off the shelf.

However, only a single bidder -- the Airbus Defence and Space and Tata Advanced Systems Ltd (TASL) consortium -- had shown an interest in the proposal in October last year. The consortium plans to replace the Avro with C-295 transport carriers. Indian Air Force is keen to replace the fleet as it feels that the vintage Avro does not serve the purpose in the modern era.

IAF wants a replacement cargo aircraft with "back ramp" and the ability to land in "under-prepared ground".

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