With an eye on a direct foreign-military-sales procurement route, the government has scrapped about $2 billion tender to buy six mid-air refuellers for the Indian Air Force over high life-cycle costs.
Defence ministry sources told a news agency that the government had last month written to Airbus — with which it was in talks for the deal — intimating the decision to withdraw the tender.
With the finance department raising concerns over the high cost, a top defence source said: “The main reason for the cancellation of the tender is very high life-cycle cost which was not calculated properly in the beginning.”
Mid-air refuellers are seen as vital force multipliers for the armed forces and more so in India’s case as they were to be used for the frontline SU-30 fighter jets which would have augmented operational capabilities immensely.
This is the second time that the tender has been scrapped. The first time was in 2010 after the finance ministry’s objections on the procedure.
Recently, documents relating to the mid-air refuellers’ proposal were recovered from the possession of defence consultant Sanjay Bhandari during income tax raids on his premises.
Besides the cost factor, an ongoing CBI probe into an agreement inked by the civil aviation ministry during the UPA era with Airbus had acted as roadblock to the finalisation of the deal.
Airbus’s A-330 MRTT had emerged as the lowest bidder in the IAF contract for procuring these six tanker aircraft. At present, the Indian Air Force has six Russian-origin IL-78 mid-air refuellers.
