With Ministry of Defence unable to decide on who would be the Indian partner -- a private company or a Public Sector Undertakings (PSU) -- Indian Navy's acquisition of 111 helicopters under the strategic partnership model remains grounded for now.
The acquisition, estimated to be worth Rs 21,738 crore, of Naval Utility Helicopter (NUH) is the first one being processed under the new Strategic Partner procurement model. It is aimed to boost domestic manufacturing in collaboration with foreign firms.
Earlier, Indian Navy had shortlisted three foreign and four private Indian companies. But now discussion over making state-owned Hindustan Aeronautics Limited (HAL) the strategic partner has delayed the entire acquisition process.
"There is a lack of consensus within the Ministry of Defence as to whether Hindustan Aeronautics Limited (HAL) should be made the strategic partner or private firms," said a source in the ministry.
This has further delayed the issuance of the Request for Proposal (RFP) for Naval Utility Helicopters.
In 2019-end, the Defence Acquisition Council headed by Defence Minister Rajnath Sigh was expected to give a final clearance next week for the Request of Proposal (RFP) after having identified the Indian firms and foreign manufacturers who will get together for the production of the helicopters.
But it did not happen and the matter was referred back to Indian Navy to consider the proposal of involving Defence PSUs.
The decision to go with private Indian industry was taken in August 2018.
Out of the 111 helicopters, 95 will be manufactured in India by the selected Indian Strategic Partner.
These helicopters will replace the ageing Chetaks and would to be used for search and rescue operations, casualty evacuation, low-intensity marine operations and torpedo drops.
Sources said that Navy has lost around five Chetak helicopters in the last seven years. Further, Chetaks' availability with the Navy will reduce by 2023 considerably. To procure helicopters was first proposed in 2008. The procurement was under 'buy global' category.
It was only in 2014 that the DAC directed the Indian Navy to withdraw the earlier procurement process and initiate a new proposal under 'buy and make Indian' category. Later it was decided to go for strategic partnership model.
Through the strategic partnership model, the government has aimed at reducing defence imports that currently account for 60 per cent of military acquisitions.
(Sumit Kumar Singh can be reached at email@example.com)
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