April 28, 2015

Avro replacement order for new patrol aircraft may expand to Rs 17,500 crore

The mega Rs 12,000 crore pilot project for the Indian private industry to manufacture military transport aircraft is set to get bigger with the Coast Guard adding its requirement for new patrol aircraft to the plan.
ET has learnt that the Avro replacement programme, for which the Tata-Airbus combine is the frontrunner, will be expanded to add the Rs 5,500-crore Coast Guard requirement for a Multi Mission Maritime Aircraft (MMMA).
Sources said that the Coast Guard has initiated its requirement for six new aircraft for sea reconnaissance to be developed by DRDO and is requesting the defence ministry to club it with the ongoing programme to replace the Avro transport fleet of the air force.
This would give a fillip to the Avro replacement programme that is currently stuck as the ministry is yet to take a view on whether to go ahead with negotiations with the Tata-Airbus combine that has emerged as the single bidder.
The total value of this contract is now overRs 17,500 crore for a total of 62 aircraft. Further additions to this number are not being ruled out as the Navy too could have similar requirements.
While it is still unclear how the addition would affect the ongoing process to replace the Avro fleet, sources said that the views of the Gokhale committee that was set up by the Defence Minister to review the project has come in. It is believed that while the report does not have a negative view on taking forward the contract with a single vendor, there is room for ambiguity that will now require a political call by South Block.
Much like the Rafale purchase that required intervention from the top leadership to take forward the procurement, a definite political direction will be vital for the Avro replacement that can go either ways on the basis of the Gokhale committee report.
In the meantime, other competitors, including an Italian and Ukrainian firm have also written to the Defence Ministry, expressing their interest in the project in a bit to pip the Airbus-Tata consortium that is offering the C295 medium transport airlifter.

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