February 8, 2017

Navy deal to procure multi-role helicopters from the US on deathbed

A key Navy deal to procure 16 multirole helicopters from the US is virtually on deathbed as it has been stuck for over two years over the issue of price.
"The contractual validity of the bid submitted by the American firm Sikorsky for its S-70 Seahawk choppers has already expired but the deal is stuck at the contract-negotiations stage for the last two years, including the price," Navy sources told Mail Today.
Now, the deal will move forward only if Sikorsky, which has now been acquired by American defence giant Lockheed Martin, agrees to extend the validity of its commercial bid and also agrees to reduce the price of its choppers, they said.
Sources in defence ministry said the price of choppers asked for by the American firm is considered to be on a higher side when compared with the benchmark price decided by it at the time of issuing the tender nine years ago.
The 16 multirole helicopters are sought by the Navy for its warships and upgrading its anti-submarine warfare capabilities which are on a decline as the Seaking helicopters bought from the UK in the 1980s would be on their way out from the force in near future, they added.
Sikorsky was selected by the Navy for its requirements in December 2014 as it emerged as the only bidder in the race after Finmeccannica was chucked out of the competition due to the chopper scam allegations on it.
After the tender bid was opened, sources said there was a demand made to raise the price of the choppers to meet inflation, but the defence ministry sought a further cut in the price demanded by the firm originally in its commercial bid.
Other issues like liability clause were also responsible for holding up the deal for some time, sources said.
Navy sources said the deal is required badly for the force as it has to find a replacement for the SeaKing - 42 choppers bought from British firm Westland helicopters.
The Seahawk is a naval variant of the US Army's legendary Black Hawk UH 60 helicopter.
The Navy had floated a tender for 16 helicopters with an option for another eight in 2008. Seahawk S-70B can be used for advanced anti-submarine and anti-surface warfare to take on underwater and over water threats.
Even if India signs the deal immediately for the S-70 choppers, it will take at least three years for the first chopper to be delivered as they are complex machines and take time to be integrated.
The Navy also has plans of buying 123 more naval multirole helicopters which would be a more than `673.62 million (USD 10 billion) affair as it has plans of deploying two choppers each on its outgoing destroyers and frigates which operate in high seas and need these planes for critical operations.
Navy's light utility chopper contract was scrapped two years ago and the force is continuing flying the vintage Cheetah choppers. The tender for new choppers is stuck as the defence ministry is waiting to clear the strategic partnership policy.


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