India Cancelled $1.5-billion Contract for A-330 Midair Refuellers

Josy Joseph

In a development that could severely hamper the Indian Air Force’s (IAF’s) ability, the government has cancelled a $1.5-billion contract for midair refuellers for fighter aircraft. Midair refuellers extend the reach and endurance of the aircraft. Defence ministry sources said the contract was cancelled after the finance ministry raised several objections to the acquisition. The ministry’s objections, sources in the military said, were due to a lingering L1 (lowest item in a contract) syndrome in the government.

The air force pleaded hard with AK Antony to not cancel the contract after a few years of trial and evaluations, but the defence minister decided not to oppose the finance ministry. Under the norms of contract of government of India, the cheapest item that satisfies the parameters must be bought.

The air force is upset at the cancellation. When it comes to the military, technological capabilities and sophistication make a huge difference, “but that is immaterial if the finance ministry is to be trusted”, a source in the force said. “For every bit of sophistication, we have to pay a price, and that makes a huge difference in the battlefield,” he said.“It would take us a few years now to select a tanker, unless they force us to buy the Russian tanker,” an IAF officer said.

“We need to break the logjam” on opting for the cheapest, another air force officer said. He pointed out that the contract for the purchase of 12 helicopters for transporting VVIPs, such as the president and the prime minister, was also facing resistance from the finance ministry. The ministry has argued that the deal is far more expensive than what was projected. However, since there is no “L1 trouble” in the chopper deal, it may “finally go through”, the officer said.

The finance ministry had also objected to the acquisition of the costlier Airbus 330 multi-role tanker transport aircraft six years after the air force bought the Russia-made Ilyushin-78. But, sources said, the force justified the buy in a detailed written reply, saying Airbus was technologically superior than Ilyushin-78 and that the overall cost of the European product would be competitive. IAF pointed out that Airbus was fuel efficient and most of its civilian parts could be serviced in India.

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Posted in: India,Tanker aircraft