Private Sector entry to Transport Aircraft manufacturing

Thursday, December 12, 2013

New Delhi: A proposal to procure 56 transport aircraft as replacement for AVRO aircraft through ‘Buy & Make’ route has been accorded Acceptance of Necessity (AON) by the Defence Acquisition Council (DAC) on 23rd July, 2012. Out of these, 40 aircraft will be manufactured in India by an Indian Production Agency (IPA) from the private sector. The IPA will be chosen by the Original Equipment Manufacturer (OEM).

The IPA can be a Joint Venture (JV)/Special Purpose Vehicle (SPV)/Consortium. PSUs/HAL can participate as part of such JV/SPV/Consortium. Some letters have been received wherein primary concern raised relates to denying opportunity to Public Sector Undertakings to participate in the procurement process. The concerns have been noted and the matter is under further consideration.

This information was given by Defence Minister Shri AK Antony in Rajya Sabha today.

The Request For Proposal for the requirement of Transport Aircraft was issued to eight foreign Original Equipment Manufacturers.

Out of the total 56 Aircraft 16 aircraft is planned to be brought in a fly-away condition to meet the immediate requirement of the Indian Air Force. Remaining 40 Aircraft will be produced in India for the Indian Production Agency to gain the required expertise in Aircraft manufacturing. Though production of 40 Aircraft is not a big attraction to start a new facility the potential for using the same aircraft with modifications in the Civil sector and possible export opportunities make this an attractive project for the Private sector.