Praful Patel letter-bombs Antony over IAF contract

With Heavy Industries Minister Praful Patel batting for Hindustan Aeronautics Limited (HAL), Defence Minister A K Antony on Wednesday said he was reviewing a suggestion from Patel to open up an Indian Air Force (IAF) tender to procure 56 carriers to the public-sector aviation major, which was barred from the tender by design.

While floating the Rs 12,000-crore tender in May, the Defence Ministry had deliberately kept HAL at bay and encouraged a handful of foreign companies to respond to the tender with the underlying objective of creating an aircraft manufacturing facility in the private sector that would act as an alternative to HAL.

One of the mandatory preconditions in the acquisition programme was inclusion of an Indian agency for manufacturing the aircraft in India.

The first 16 aircraft are to be delivered by the foreign manufacturer in a flyaway condition.
The remaining 40 will be made in India. They will replace the Avro aircraft the IAF now flies.
The companies which responded to the tender are Illyushin of Russia, Antonov of Ukraine, European firm EADS, Italy's Alenia Aemacchi, Brazilian Embraer, Swedish Saab and US major Lockheed Martin.

“By restricting the PSUs from even participating in this tender, the facilities or expertise and manpower created from public funding may remain idle, while at the same time the government will make a huge funding to the private sector for ab-initio creation of the same facilities,” said Patel in his letter.

In the letter, dated October 7, Patel said that this being a public procurement, equal opportunity and a level playing field should have been provided to all capable entities irrespective of being “public” or “private” in nature.

“Any preference or discrimination among potential Indian entities — public or private — is likely to be construed as an act against the spirit of public procurement,” he said.
Antony has asked Defence Ministry officials to examine the issues raised by Patel, who was in charge of the Civil Aviation Ministry before moving to heavy industry.

Hindustan Aeronautics Limited chairman R K Tyagi was in Pawan Hans – a PSU under the Civil Aviation Ministry – before taking over the reins of HAL. The Defence Ministry designed the Avro replacement programme so it can lead to the creation of an alternate manufacturing base for aircraft.

As Hindustan Aeronautics Limited enjoys a monopoly at the moment, the ministry realised its hands are tied, despite gross slippage on the part of HAL to stick to time schedules and cost of projects as per contract.

The tussle has been on projects like the indigenous Tejas light combat aircraft, which has been in the development phase for three decades.

The latest bone of contention is the intermediate jet trainer, which the IAF badly requires, as its Kiran intermediate trainers are about to be phased out.