Airbus pips Russia to seal 9,000-crore aircraft deal with India

Airbus pips Russia to seal 9,000-crore aircraft deal with India

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New Delhi/Paris:  Russia's hope of bagging the Rs. 9,000-crore contract to supply mid-air refuellers to India is over. It has been pipped at the post by the European aviation giant, Airbus.

This is the second time that Airbus A-330 Multi Role Tanker Transport (A-330 MRTT) has emerged as the first choice of the Indian Air Force (IAF). The IAF has a fleet of six Russian-made Illyusin-78 (IL-78) refuellers; it wants to acquire another six mid-air refuellers.

In 2006, Russia and Airbus were among those who had bid to supply mid-air refuellers to India.

In 2010, after the entire process of selection was completed by the IAF, the Union Finance Ministry scrapped the purchase. The Finance Ministry had expressed apprehension about the selection process and the pricing of the Airbus A-330 MRTT. Fresh tenders were called for; Russia and Airbus emerged as top contenders.

The acquisition of the A-330 mid- air refuellers underlines the need to streamline the defence procurement process. For, while the IAF will be buying the same aircraft, which it had shortlisted in 2009, Indian tax-payers will have to pay more because of cost escalations that have occurred over the past four years.

The European Aeronautics Defence and Space Company (EADS) and the Ministry of Defence (MoD) will soon start "the final commercial negotiations," MoD sources said. It is understood that the contract will be finalised only in the next financial year (2013-2014).

The budget cuts forced on the Defence Ministry, however, means that the government will have to do a tightrope walk in finding the money to purchase the mid-air refuellers. The MoD's budget has been cut by almost Rs. 10,000 crore, which was allocated for capital expenditure.

The IAF has been operating mid-air refuellers for about a decade now. Mid-air refuellers act as 'force-multipliers', allowing fighter planes to stay in the sky for longer durations, and reach targets located much deeper in enemy territory.

The twin-engine A-330 pipped  the four-engine IL-78 at the post because of its superior running and maintenance costs. The A-330 emerged the cheaper option when the life-cycle costs of both the aircrafts were considered, MoD sources said.

The A-330 is the modified version of the Airbus A-330, and works as a transport aircraft as well as a mid-air refueller. It has a fuel capacity of about 110 tonnes. Alternatively, it can also carry as much as 45 tonnes of cargo. The A-330 is also capable of refuelling several fighter planes at the same time.

Despite the setbacks, however, Russia remains the biggest supplier of arms to India. Russia and India are soon likely to sign a contract for joint production of the fifth-generation stealth fighter aircraft at an estimated cost of over US $30 billion.

(With inputs from AFP)

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