May 17, 2018

Rs 27,000-crore anti-aircraft missile deal hits hurdle

A mega deal to procure shoulder fired anti-aircraft missiles for the Indian Army has hit controversy after competitors alleged that a Russian system was qualified even though it failed to meet technical requirements and could not fully demonstrate capabilities during trials.

The Rs 27,000 crore deal to procure Very Short Range Air Defence (VSHORAD) missiles was initiated in 2010 under the previous UPA government and has gone through several twists and turns over the years that has left the French, Swedes and Russians in the fray.

Sources have told ET that after the IGLA S system was qualified in January after five years of trials by the Army, competitors have approached the defence ministry with protest letters, alleging that the system did not meet specified requirements, contending that norms have been tweaked to favour the Russians.


The high value VSHORAD procurement has gone through a tricky phase since 1999, when the file was first moved to replace the Russian IGLA M systems that were being used by the Army since the 1980s. Despite the urgent requirement of a missile to take down aerial targets at a short range, the procurement process did not begin until 2010 when global tenders were floated.

Out of the four respondents, the Koreans did not make it but others, including SAAB’s RBS70 NG, MBDA’s Mistral and the Russian IGLA S were found to be compliant to requirements in January.

However, official complaints by the competitors are also being examined, given the scale of the deal. It is learnt that one point raised by competitors is that the IGLA S did not demonstrate low level target hits in desert environments during summer season and failed to lock into targets at long distance.


The particular test – to intercept a target at a distance of 500 meters, travelling 10 meters above ground – is alleged to have not been passed by the Russian system in the summer season, when the hot sand makes it difficult to track incoming aircraft.

It has also been alleged that the Russian side modified the sights of the IGLA S during trials by changing the optics and sensor, in a violation of rules that permit only minor alternations. And, that the Russian side did not turn up for trials ate least two times, in a violation of norms. Detailed questionnaires sent to the three competitors and the defence ministry by ET did not fetch any comments.


A critical milestone for the contract will be on Friday when commercial bids are set to be opened by the defence ministry. However, it is unclear how the Army will muster the funds needed to ink a deal of such value this year, given that it is extremely short on budget.

In a presentation to the parliament panel on defence in March, the Army had said that the VSHORAD procurement is likely to be impacted as it has been given Rs 17, 756 crore less in the annual budget than what it had requested. The Army had also named the light specialist vehicle procurement as a project that would be impacted, however a contract is believed to have been signed now with Force Motors for the same.


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