The government on Thursday scrapped the Rs 17,000 crore helicopter deal with European aviation consortium, Eurocopter, accusing it of “deviating from approved parameters” of the choppers urgently required for the army.
“A fresh Request for Proposals (RFP) would be issued shortly,” Defence Ministry spokesman Sitanshu Kar said.
Eurocopter and US firm Bell Helicopters were shortlisted for the contract, which visualised purchasing 60 helicopters off the shelf and the rest 137 being manufactured in India under technology transfer.

The cancellation comes at a time when the 4 billion US dollar deal was almost at the finalisation stage with defence ministry officials carrying out price negotiation with the French company. This is the second major defence deal to be scrapped this year. Earlier, the defence ministry had cancelled international tenders for the Rs 4,000 crore deal to purchase 400 upgraded 155 mm .52 calibre guns for the army. Eurocopter had earlier in the day claimed that it was very much in contention in the race to acquire 197 light helicopters and was expecting the deal to be finalised in the “coming weeks”.

Officials said: “The field trials were vitiated. No clearance from the Ministry of Defence was taken for the trial of the new model.”

They clarified that such a deviation can be approved only by the Defence Minister after the proposal goes through Defence Procurement Board.

“This was not done in this case,” they added.

The Defence Procurement Policy 2006 specifies that a technical offer once submitted should not be materially changed subsequently.

European Aerospace and Defence Systems, makers of the Eurocopter, had offered the AS 550C3 military version of the chopper with Arriel 2B engines in their RFPs floated in 2001. But what the company sent for trials was the AS350 B3 model powered by Arrield 2B 1 engines, its civilian version, observed the officials.