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Rs 21,738-crore naval helicopters to be new govt's first defence buy

Business Standard:  May 31, 2019

New Delhi: The Rs 21,738-crore procurement of 111 light Naval Utility Helicopters (NUH) for the Navy is on track to be the first big procurement of the new National Democratic Alliance (NDA) government. 

On Thursday, the last day for vendors to submit responses to an expression of interest (EoI) floated by the defence ministry on February 12, at least three international original equipment manufacturers (OEMs) submitted proposals to build their helicopters through an Indian industry designated as strategic partner (SP). The OEMs that have responded include Lockheed Martin, Airbus, and Bell Helicopters.

Business Standard has learnt that the vendors proposals were not opened on Thursday. They are likely to be opened on June 3.

This NUH acquisition, which the defence ministry green lighted on August 25, is the first one being processed under the SP procurement model. This involves chosen Indian SP firms building major defence platforms in India with niche technologies and production knowhow supplied by a foreign OEM. “The OEMs have been mandated to set up (a) dedicated manufacturing line, including design, integration and manufacturing processes for NUH in India and make (the) Indian manufacturing line as a global exclusive facility for the NUH platform being offered,” stated the MoD in February, while releasing the EoI.

Business Standard has learnt that the Navy has listed out six “must-have” technologies that the OEMs must transfer as part of the contract. In addition, the vendors will be required to transfer “manufacturing technology” that will drive the assembly line.

The proposal for building 111 helicopters allows the OEM to deliver the first 16 from its home production facility, but at least 95 helicopters must be manufactured in India with an ambitious level of 60 per cent indigenisation stipulated.

The Indian SPs are likely to be chosen from among Tata Advanced Systems, Mahindra Defence, Adani Defence, Larsen & Toubro, Kalyani Group and Reliance. 

While the SP model of procurement was intended primarily for private sector firms, Hindustan Aeronautics and Indo-Russian Helicopters have also applied to be SPs.

 

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.