Major Blow To Airbus, India Scraps $1.5-bil Light Copter Buy

It's the unthinkable for Eurocopter (now Airbus Helicopter), but it had been on the horizon for at least 18 months now. India's agonisingly long-drawn out procurement programme for 197 light multirole helicopters (officially 'Reconnaissance & Surveillance Helicopter' or RSH) was scrapped today by the MoD. The decision brings to a close nearly four years of uncertainty since field trials on the two competing helicopters (the AS 550 C3 Fennec and Kamov Ka-226T Sergei) were completed in December 2011.

Nervous about proceeding with a decision ever since it emerged last year during the AgustaWestland investigations that an Indian Army Brigadier may have separately offered to compromise the light helicopter competition in its first avatar (the effort was scrapped in 2007), the Army and MoD have finally pulled the shutters down on the deal. The Indian government first sent out an RfP in 2003, and its second one (the current competition) in 2008. That's 11 years down the drain, and a second major blow the Airbus Helicopter that had been shattered by the first abort in 2007.

The Indian government has decided to re-open the light copter shortly as 'Buy & Make' programme, in which the Indian private sector has a magnificent opportunity to procure technology from abroad through a joint venture, and manufacture the helicopters in India. Airbus, Kamov and other firms would presumably be among the potential technology partners in such an effort. Either way, the decision is in keeping with a resolute new impulse pervading procurement: no more simply buying stuff; if you want to sell to India, you had better make a large part of your kit locally.

But the implications of the scrap are major: it places many years of additional pressure on India's current fleet of Cheetah and Chetak utility choppers operated by the Army and IAF especially in high-altitude zones. The scrapping also does little for India's existing reputation as an unpredictable, whimsical and inefficient customer of military hardware.

The folks at Kamov and Airbus both confirmed tonight that they hadn't heard from the MoD, and had only read about the decision in the press.

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