Airbus-Tata group gets nod to replace Avros for Rs 12,000 cr

The government on Wednesday night cleared the lone bid of a Airbus-Tata consortium for replacing Indian Air Force's fleet of ageing Avro transport aircraft for Rs 11,930 crore, besides approving Russia's offer to build Kamov Ka-226T helicopters under the 'Make in India' initiative.

The defence acquisition council (DAC), which met here, also cleared the proposal to convert two Boeing 777-300 ERs for very very important person (VVIP) travel, defence sources said.

Other major proposals cleared in the meeting, chaired by Defence Minister Manohar Parrikar, included six new BrahMos supersonic cruise missile systems for the Indian Navy worth Rs 2,700 crore and acquisition of 145 pieces of M777 Ultra-Light howitzers from the US under a government-to-government deal.

The DAC also set up a committee to work out the modalities for the purchase of 36 Rafale fighter jets from France.

The big take-away from Wednesday's meeting was the approval of the bid of Airbus-Tata consortium to replace IAF's 56 Avro aircraft with C-295 transport carriers.

While 40 aircraft would be manufactured here, 16 would be bought off-the-shelf.

A final decision was anticipated in November last year, but Parrikar had then sought more information about the necessity of the aircraft and the bidding process.

Under the current defence procurement policy, a single- vendor situation is not entertained unless cleared by the DAC.

In May 2013, the ministry had issued a request for proposal (RFP) to original equipment manufacturers, including US firms Boeing and Lockheed Martin, European multinational Airbus Defence and Space and Antonov of Ukraine, among others.

They were required to tie-up with an Indian private firm.

However, only Airbus and TATA responded to the RFP.

"The Avro deal will create the necessary ecosystem for the growth of the domestic aerospace sector," sources said.

Another major bid cleared is the Russian proposal to assemble advance twin-engine Kamov helicopters.

The offer was made during the visit of Russian president Vladimir Putin last year in December.

Sources said that 200 light utility helicopter Kamov Ka-226T would be manufactured in India under Make in India initiative, adding that the cost and other modalities would be worked out later. They also said that some could be bought off the shelf.

The DAC also cleared Army's proposal to buy 145 pieces of BAE's M777 Ultra-Light for Ts 2,900 crore. The Army is in desperate need of new artillery guns.

Sources said this deal would be through Foreign Military Sales (FMS) but the "spares, maintenance and ammunition will be operated through Indian systems".