India has withdrawn the tender for a much-awaited contract for the purchase of six multi-role tanker transport (MRTT) aircraft with Airbus Defence and Space, worth more than $1 billion, on grounds of the planes’ high operational cost.

This is the second MRTT aircraft global tender to be cancelled by the ministry of defense since 2006.

“We have [recently] cancelled the MRTT deal with Airbus because platforms are too expensive and not economically viable to operate”, said an MoD official who declined to be identified.

“We have examined this deal very carefully and the [budgetary] approval has been rejected thrice by the Indian finance ministry,” the MoD official said.

“This is indeed a setback to us, as we want the MRTT aircraft desperately, and a fresh [global] procurement will take at least five more years”, said a senior air force official said who requested anonymity.

The A330 MRTT came out on top of a Russian offering twice in the technical evaluation and, according to the air service, would have proven comparatively economical to operate over its lifespan.

Airbus Defence and Space executives here were unavailable for comments.

Another MoD official said the ruling National Democratic Alliance (NDA) government intends to bring transparency and avoid controversy in all [defense] procurements.

The defense ministry selected the Airbus A330 platforms over the Russian Ilyushin IL-78 aircraft in July 2012 to be operated by the Indian air force for the next 25 years.

The air branch wants modern MRTT aircraft very badly to increase the range of the current fleet of Sukhoi SU-30MKI multirole fighters.

In response to a July 2010 global tender, only Airbus Defence and Space and Ilyushin Design Bureau of Russia qualified the bids, as Antonov Design Bureau of Ukraine was technically rejected and Boeing and Lockheed
Martin did not participate in the bids.

Currently the air force operates six obsolete IL-78 tanker aircraft bought from Uzbekistan over two decades ago.

“The Indian government has struggled to make purchases through the open tender mechanism and is increasingly relying on the government-to-government route to meet the needs of the armed forces,” independent defense analyst Nitin Mehta said.

“The Airbus A330 MRTT acquisition is a case in point where twice the bidder was technically selected, declared lowest bidder (L-1), and each time the government has withdrawn in the process,” Mehta added.

Source: Defense News