Has Airbus Helicopters bitten off more than it can chew? The company has evoked a strong reaction from Naval Authorities by partnering with multiple Indian vendors to bag contracts for the Navy Utility Helicopters Programme.

The company has participated with as many as six vendors — Mahindra Group, Reliance, Tata Group, Punj Lloyd, Pipavav, and L&T — for the 100-helicopter programme, which has been valued at $1.5 billion. The strategy has put it in an advantageous position to bag the contract.

Multiple sources said that during presentations made by companies interested in the project, Navy officials were perturbed by Airbus Helicopters’ approach.

“The (naval) officials felt Airbus was trying to ensure it gets a say by making six bids with various Indian vendors, adopting a different approach in each case,” a participant said on condition of anonymity.

Industry sources said this calls for clarity on whether there is any restriction on the number of bids a company can make at the ‘request for information (RFI)’ stage itself.

This RFI has been made under the Buy & Make (Indian) category, in accordance with the Defence Procurement Procedure, 2013. Only Indian firms can respond to the RFI and the terms allow them to discuss tie-ups with multiple foreign Original Equipment Manufacturers (OEM).

The main challenge for the Navy would be to ensure that the OEMs have clearly defined partnerships with the Indian companies so that execution meets the procurement guidelines, said another source.

The utility helicopters will have to be able to perform multiple operations, including search and rescue, medical evacuation, communication, anti-piracy/anti-terror, reconnaissance and disaster relief.

Airbus reaction

Speaking to BusinessLine , an Airbus Helicopters spokesperson said: “We, as a foreign OEM, are allowed to talk to multiple Indian companies and this is what we are doing at the moment. We have not formalised an exclusive partnership with any company as yet but will do so by the time the response to the request for participation is due.”

Sources also said that Airbus Helicopters wanted some changes in the request for participation terms and conditions, which did not go down well with the Indian Navy.

Some of the key changes requested by Airbus Helicopters include 100 per cent credits even if 30 per cent Indian content is achieved; full management control with a 51 per cent or higher equity stake; and complete discretion on technology transfer.

Naval Headquarters had invited the Indian lead partners along with representatives from OEMs to make presentations. The first presentation, on March 16, was made by Bell Helicopters. Airbus Helicopters had requested for more time for its presentations.

Once the RFIs are done, it will take at least six months for the request for participation notice to be issued.

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