France admits Indian helicopter deal off and says will re-bid

France admits Indian helicopter deal off and says will re-bid

New Delhi: France’s foreign minister Bernard Kouchner admitted on Friday that a deal for European aerospace giant European Aeronautic Defence and Space Co.‘s (EADS) unit Eurocopter to supply 197 helicopters to the Indian army had been officially cancelled.

Kouchner said he was “not satisfied" with the collapse of the $600 million (Rs2,376 crore) deal, but asserted Eurocopter would re-bid once India floats fresh global tenders.

India’s defence ministry said on 6 December that Eurocopter’s successful tender for the helicopters had been scrapped, although the firm and the French embassy here contested the validity of that announcement.

The ministry has not said publicly why the deal was pulled, but senior defence sources have alleged that Eurocopter used a local go-between despite an Indian ban on the use of middlemen in defence deals.

Eurocopter, part of EADS, was also accused of presenting a civilian helicopter instead of a military version for statutory field trials by the Indian army.

“I am not satisfied, but we have been told by the Indian government that the bidding process has to be launched again because of procedural details," Kouchner told reporters.

Indian media have reported that Paris had protested at the cancellation but the minister said EADS will remain in the race for the contract.

“Yes, we can complain but it is useless to complain ... So we have to participate in the new bidding process," Kouchner said.

“This is not the end of the story ... we will win the new bidding process."

The issue figured during Kouchner’s overnight meeting with his counterpart Pranab Mukherjee.

“They reviewed the entire gamut of bilateral relations including the growing ties in the defence sector and during their talks this issue (cancelled deal) also came up," said a foreign ministry official, asking not to be named.

Press reports have also claimed the Indian defence establishment came under pressure from Bell, which is trying to sell its LongRanger helicopters to the Indian army.

The final signing of the deal was also supposed to be one of the highlights of a visit to India next month by French President Nicolas Sarkozy.

French President Nicolas Sarkozy is to visit India on 24 January, with Paris hoping to sign a nuclear energy accord with New Delhi, Kouchner said.

He added that he hoped India would soon reach an agreement with the UN’s atomic watchdog on inspections and safeguards, a precondition to an accord with the US and any future deal with France.

“We are in favour of initialing a sort of strategic agreement but we have to wait for the (International Atomic Energy) Agency," Kouchner said after meeting Prime Minister Manmohan Singh.

The India-US pact would end three decades of international sanctions on nuclear trade with India imposed after New Delhi tested nuclear weapons.