Home >Companies >HAL scraps chopper tender due to shortcomings

Bangalore: State-run Hindustan Aeronautics Ltd, or HAL, has scrapped a tender to co-develop 10-tonne helicopters for the Armed Forces, after responses from two shortlisted vendors exposed shortcomings in the Indian military plane maker’s proposal, two executives close to the development said.

Eurocopter Group, the helicopter subsidiary of European Aeronautic Defence and Space Co. and Mil Design Bureau, a unit of OJSC Russian Helicopters, were the final bidders to jointly design the choppers that would eventually replace the ageing fleet of Russian-built Mi-8 and Mi-17 helicopters in the Indian military.

Retendering projects: A file photo of helicopters at the HAL base in Bangalore. The firm plans to send a fresh request for proposal in a month. Hemant Mishra / Mint

One of the HAL executives confirmed the tender has been scrapped but didn’t provide more details. The other executive said the company scrapped the tender after Eurocopter and Mil Design proposed vastly different business models and HAL realized the specifications for the project were unclear. HAL is now retendering the project, he added.

One of the vendors had in its tender proposal offered to form a joint company for developing the chopper, while the other had offered some elements of design, transfer of technology in transmission, rotor assembly and gearbox for the helicopter project, the official said, without specifying which firm proposed which model. Both the HAL executives did not want to be named due to the sensitive nature of the deal.

Eurocopter said it has been talking with HAL for three years to build a version of its EC-725 helicopter.

“The project is still there. Now they want adjustments of the Armed Forces and of HAL in the project,"?Norbert Ducrot, vice-president for Asia-Pacific at Eurocopter, said over phone from Paris. “This is the best project we can have in India."

Ducrot, too, declined to specify the business model the firm offered to HAL. On whether the firm will rebid for the contract, he said, “We will see whether it fits the requirement. As far as we are concerned, we are interested to expand the footprint in India."

The 10-tonne helicopter project was conceived initially for the Indian Navy but later extended to the army and the air force. The chopper would be used to transport troops and cargo in all the regions, including in the Himalayas and the North-East. The development cost for the helicopter project is around Rs500 crore but the total value of the deal is unclear. The Armed Forces need around 350 such helicopters. Now HAL plans to send a fresh request for proposal in a month.

Analysts fear such delays in sourcing arms, aircraft or choppers could harm India’s military and its operations.

“People should be mindful of user requirement. Changing (the design requirements) frequently would harm the user," said K. Sridharan, a former air marshal with the Indian Air Force and president of the Rotary Wing Society of India, a body of helicopter pilots and engineers. “This is happening frequently."

In 2007, India withdrew a contract for 197 light helicopters from Eurocopter after complaints by rival Bell Helicopters Textron Inc. on the choice of the European vendor through unfair means. India later increased the order to nearly 400 choppers and floated a global tender for half the requirement. The remaining will be made indigenously by HAL.

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