May 27, 2013
India's long-delayed effort to acquire 197 light reconnaissance and surveillance helicopters for its army and air force is spiraling toward what might be the program's second cancellation.
The billion-dollar deal, a fight between Eurocopter's AS550 C3 Fennec and the Kamov Ka-226T Sergei, has languished without decision since 2010, when field evaluation trials were completed. The helicopter sale has been further derailed by an army-recommended investigation into the role an Indian military officer played in a purported bribery attempt during the first stage of the competition.
Those allegations arose as part of an Italian investigation into the larger scandal involving Finmeccanica, which resulted in the ouster of CEO Giuseppi Orsi. Italian authorities discovered papers suggesting that an Indian military officer had offered to manipulate the specifications and trial process in the light helicopter program to favor AgustaWestland, which had been a contender at the time. The company's AW109 was eliminated from the competition on technical grounds shortly after the purported offer was made.
A senior Indian defense ministry source confirms that the Defense Acquisition Council, headed by Defense Minister A.K. Antony, will not move forward on the light helicopter program until inquiries into corruption charges by the officer are complete.
In March, Antony told the Indian parliament that “no formal inquiry has been instituted in the case of procurement of the 197 Light Utility Helicopters.” The statement was nuanced, though. Government agencies are investigating corruption charges against the Indian officer but not the helicopter deal itself.
The episode is the latest in a line of difficulties for the program. In 2007, the first time the competition was aborted, Eurocopter had won, but the program was scrapped in the final stage following allegations of non-compliance—a major blow to Eurocopter.
Now, the possibility of a second program kill has Eurocopter managers in India anxious to the extreme.