Rockwell Collins, Tata Power to bid for air force pact

By Anurag Kotoky

BANGALORE (Reuters) - Rockwell Collins Inc will jointly bid with a unit of Tata Power Co Ltd for a contract, expected to be worth $150 million to $200 million, to supply radio equipment to the Indian Air Force, the U.S.-based company said.

Rockwell Collins, a supplier of avionics and other electronic systems for commercial and military airplanes, said it would provide the technology for the contract, while Tata Power's engineering unit would be the prime contractor.

"I don't know the exact number because it is a competition. As of today we estimate (contract value) to be anything between $150 million to $200 million," Ram Prasad, managing director of Rockwell Collins India, said in an interview with Reuters on the sidelines of an air show in the Indian city of Bangalore.

Utility Tata Power is part of the $100 billion salt-to-steel Tata Group and also works with India's Ministry of Defense for the development and supply of parts for products, including missile launchers and air defense systems.

India, the world's biggest arms importer in recent years, plans to spend around $100 billion over the next 10 years in upgrading its mostly Soviet-era military hardware to keep pace with China's ramping up of defense spending.

Rockwell Collins, which counts government agencies, planemakers and airlines as customers, has reduced its business in some defense segments and cut jobs as the United States has moved to curb spending.

The company is, however, not worried about the Indian government's plans to cut its own defense budget.

India is planning cuts to its budget this year, including some affecting defense, to reduce spending by about 1.1 trillion Indian rupees in the current financial year, or some 8 percent of budgeted outlay.

"I hear from everyone that no matter what, they will not compromise on modernization. If that statement is true, which I firmly believe should be true, then capital acquisition for future use would not be affected that much," Prasad said. (Additional reporting by Ananthalakshmi Ananthsankar; Writing by Aradhana Aravindan; Editing by Jeremy Laurence and Gerald E. McCormick)