Govt yet to decide on HAL bid, foreign cos tie up with private firms to build naval helicopters

Govt yet to decide on HAL bid, foreign cos tie up with private firms to build naval helicopters

Foreign helicopter manufacturers are chasing Indian private sector players for a Rs 21,000 crore plan to manufacture naval utility helicopter, a project for which the defence ministry is moving fast but needs to take a call after state-owned Hindustan Aeronautics Ltd (HAL) entered the fray.

The plan to manufacture 111 helicopters under the strategic partnership process kicked off earlier this year after the ministry sent out a public request for bids by Indian companies. The bid – an Expression of Interest (EOI) – specified that the applicant company needs to be a ‘private sector company’.

However, HAL put in two bids for the project – one through the parent PSU and another through its joint venture company with Russian Helicopters. With the clear specification that the government wants to invite only private sector companies for the bid, foreign manufacturers who have to tie up with Indian players are not taking any risks, with an assumption that HAL’s bids would have to be rejected.

Three foreign helicopters manufacturers are participating in the competition. The European player for the contract, Airbus, which has offered two separate choppers for the contract has already announced that it will be tying up with Mahindra Defence for the project. Similarly, US firm Sikorsky, which is now part of the Lockheed Martin group, had formed up an alliance with Tata Aerospace and Defence.

Sources have told ET that Russian manufacturer Kamov, which is offering its KA 226 chopper for the contract and already have a JV with HAL for making it for the army and air force is now looking at alternate options.

Advanced talks are on between the Russian company with Bharat ForgeNSE -0.83 % to forge a partnership for the final tenders that the defence ministry has officially said are expected by the end of this financial year. Other Indian players who have applied for shortlisting for the mega project include Adani Defence, Reliance Defence and Laxmi Machine Works that are yet to tie up with a foreign manufacturer.

Sources said that while HAL is not likely to be selected as a strategic partner as the project is reserved for the private sector, the public sector company will get a big share of the actual work. HAL is likely to be a primary tier 1 supplier for the contract given the existing production facilities and infrastructure that it has invested in.