Patel questions barring PSUs from IAF's aircraft tender

Says PSUs should be given an equal opportunity and it'll encourage healthy competition

Heavy Industries Minister Praful Patel has raised questions on the move to bar government PSUs from participating in the tender for supply of 56 transport aircraft at an estimated cost of Rs 12,000 crore to the Indian Air Force.

In identical letters to Prime Minister Manmohan Singh and Defence Minister A K Antony, Patel has said that PSUs should be given an equal opportunity and level playing field and it would encourage healthy competition.

"This being a government/public procurement, an equal opportunity and level playing field is required to be provided to all capable entities irrespective of being 'Public' or 'Private' in nature. This will also encourage healthy competition," said Patel in his letter.

Antony as a head of the defence acquisition council (DAC) had approved the IAF proposal for procuring these aircraft sidelining the PSUs.

Patel, who also holds the Public Enterprises portfolio, further said: "There are many PSUs who meet all the prescribed criterion for participating in this tender, but are being denied the opportunity to participate in this tender only because they are PSUs".

The Indian Air Force has to acquire 56 transport aircraft to replace its aging Avro fleet. In the tender, issued on May 9 this year, the defence ministry had bypassed PSUs as Hindustan Aeronautics Ltd (HAL) and said new aircraft will be produced by the Indian private sector firms.

The tender was issued to eight foreign vendors including American Lockheed Martin, Swedish Saab, Russian Rosoboronexport, Spanish Airbus Military, Italian Alenia and Brazilian Embraer and they will have to find an Indian partner to produce 40 aircraft within India.

Indian majors such as Tata, Mahindra Defence Systems, Reliance Industries and L & T were expected to partner the bidding foreign partners for the programme.