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HAL OUT - Pvt Sector IN for Naval Choppers, 83 LCA's on order

The defence ministry is likely to remove Hindustan Aeronautics Limited (HAL) from Rs 21,000-crore project to manufacture naval helicopters that had been reserved for the private sector. But the government-owned entity is set to get a mega order to produce 83 new Light Combat Aircraft in the coming weeks, taking its order book beyond Rs 1lakh crore.

The naval utility helicopter project, being processed under the strategic partnership model, is now set to go to the next stage, with the navy shortlisting four domestic companies that would be eligible to tie up with three shortlisted foreign vendors for a competition to manufacture 111 choppers in India.

As reported by ET, HAL had made a last-ditch effort to enter the competition by writing to the defence ministry last month. The Defence PSU’s bid had earlier been rejected as the tender documents had clearly mentioned that only private sector companies are eligible.

Tata, Mahindra, Adani and Bharat Forge have been identified as companies that meet the financial and technical criteria while foreign vendors Airbus, Sikorsky and Kamov have been shortlisted as potential technology partners. Once the project is given a go ahead — likely by next week — the Navy will go to the next stage of tendering that will include flight trials and an eventual evaluation of commercial bids.

However, HAL’s hands are set to be full for the next five years, with the government likely to sign a deal for 83 of the LCA Mk 1 fighter jets that is expected to be in the range of Rs 40,000 crore.

The signing of the deal could take place at the upcoming DefExpo in Lucknow early next month, though sources say that first payments for the contract are likely to be made in the next financial year.

The LCA order — which has been in the works for the past two years — will swell the order books of the government owned entity to beyond Rs 1 lakh crore. According to statistics shared in Parliament, the current order book is pegged at almost Rs 60,000 crore.

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