India’s Avro Replacement Program Gets First Bid, More To Follow?

  • Bindiya Thomas
  • 12:39 PM, October 29, 2014
  • 3387
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India’s Avro Replacement Program Gets First Bid, More To Follow?
India’s Avro Replacement Program Gets First Bid, More To Follow?

The Indian Air Force’s Avro replacement program could once again reach a stalemate after receiving only a single bid from Airbus Defence and Space and Tata Advanced Systems (TASL).


The ministry of defense was forced to extend the deadline to October, a month before, to seek price bids after foreign aircraft-makers showed no interest in bidding for the $3.5 billion RFP (Request for Proposal), making this the fourth extension in the last 18 months.


The Avro replacement program has been a troubled one and was nearly cancelled earlier this year for fears that it might become a single vendor contest.


And with only two days left to go it looks like foreign vendors such as Saab, Ilyushin, Alenia Aermacchi and Embraer will forego filing bids once again.


Under the terms of the RFP global aircraft makers will have to partner with Indian companies. 


The RFP likely saw poor response because private companies in India have little experience with building aircraft. Because they lack the infrastructure, they would have to buy and build facilities that include airport rights and a production line.


The RFP was first issued under ‘buy and make’ Indian to foreign vendors in May, 2012. The RFP calls for 16 aircraft to be brought outright with the remaining 40 being manufactured in India.


As earlier reported, this was a major departure from convention where the Indian partner has always been the government-owned Hindustan Aeronautics Limited (HAL). The decision to allow a private player to partner in this project was reportedly taken due to HAL being stretched with helicopter, fighter aircraft and other projects.


The ‘buy and make’ cases require the Indian Production Agency (IPA) to be approved by Defence Acquisition Council (DAC) which is headed by Defense Minister Arun Jaitley. Although, the IPA can be from either the public or private sector it the DAC usually nominated a defence public sector undertaking (DPSU) as the IPA.


Meanwhile, the Tata-Airbus partnership marks the first entry bid after the Narendra Modi government raised the FDI limit in defence production to 49% from 26%.


The twin-engine aircraft is planned to have a six to eight tonne payload capacity, cruise at a speed of 800 kilometres per hour with range of about 2,500 kilometres.


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