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Indian Aviation Modernization Moving in Fits and Starts

by: Matthew Potter
November 9, 2012

Category: Agusta Westland, Business Line, Companies, Contract Awards, Countries, Events, Finemeccanica, India, Military Aviation, production program, Suspensions | RSS 2.0

The Indian government has been trying for several years to procure new helicopters for its Army and Air Force. Some of the attempts have failed due to contract issues including problems with corruption. The supplier base has also been expanded as India has changed its offset laws and made it easier for U.S. companies to participate. This has allowed contracts to be awarded beyond the traditional U.K. and Russian contractors.

Recently it was announced that Boeing (BA) would receive a contract for 15 CH-47 cargo helicopters and 22 AH-64 attack helicopters. This could be worth up to $2.4 billion for the Chicago based aerospace and defense contractor. The CH-47 have seen a great deal of use in Afghanistan due to its capability at high altitude. The addition of the CH-47 and Apache attack helicopters represents a significant improvement to current capabilities.

At the same time a contract for a new utility helicopter is facing cancellation. Augusta Westland, a Finmeccanica subsidiary was awarded a contract for 12 AW101 helicopters for VIP transports. Now this contract award is under investigation in Italy. As part of this it came out that an officer involved in the new tender which is now reaching the point of near award intervened on Augusta’s behalf to make the requirements more palatable. AW was eventually eliminated. Currently a Eurocopter and Kamov aircraft are in contention.

Because of the potential corruption in the process India might be forced to abandon it and try again. Augusta Westland also faces a ban on bidding on future contracts. This will lead to a delay in the delivery of the aircraft as well as limit those vendors. The VIP aircraft contract is currently planned to continue.

Corruption has historically been a problem with arm sales, especially those overseas. The U.S. has very strict laws governing it but not all country’s do.

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