The Air Force has got special exemption from the government to deal with banned Swiss company Pilatus to get spares and a maintenance contract to ensure that the in-service fleet of basic trainers remains airworthy.
The exemption has been given for the ‘uninterrupted sustenance’ of the fleet of 75 aircraft that forms an important part of the training programme for new pilots. As reported by ET, the Swiss firm was banned in July following registration of cases by the Central Bureau of Investigation (CBI) into alleged corrupt practices by the company to bag the Rs 2,800 crore deal in 2012.
Following the ban, the Air Force appealed to the defence ministry to grant it exemptions so that the trainer aircraft are not grounded — an action that would have a severe impact on its ability to train new pilots. The ministry has now allowed the Air Force to finalise a follow-on support contract (FOSC) for the aircraft and to continue supply of spares for orders that have already been placed.
The Air Force has also been given a four-month deadline to ink a ‘mean time between failures’ warranty clause with Pilatus for the in-service aircraft. The exemption order makes it clear however that no additional aircraft will be procured by the air force under the capital route.
Other conditions that the ministry has put in includes an undertaking that the Swiss company discharges its remaining offset obligations at the earliest and that the exemption will have no impact on ‘various probes by investigating agencies’.
As reported by ET, the defence ministry has also indefinitely banned all business dealings with a company owned by fugitive arms dealer Sanjay Bhandari, who is being investigated by Indian agencies on several counts, including fixing of a deal for the Pilatus basic trainers.
Bhandari, who is alleged to have business dealings with Robert Vadra, managed to escape India following raids at his residence and offices and is currently in London.
His company, Offsets India Solutions, had been barred from business in India.
The defence ministry notification into the Pilatus ban says that in response to a show-cause notice in January 2017, the company admitted to engaging OIS and paying it at least 1 million Swiss francs in 2010 in connection with the deal for the trainers.
These payments were made before the deal was signed with the Indian Air Force. While the Air Force was in discussions for an additional order for 38 Swiss trainers, the contract was cancelled following the ban.