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Can't accept MoD logic for barring PSUs from aircraft deal: Patel


Pallavi Ghosh,CNN-IBN
Oct 09, 2013 at 09:46am IST

New Delhi: Heavy Industries Minister Praful Patel has hit out at the Defence Ministry for barring Indian PSUs like the Hindustan Aeronautics Limited (HAL) from taking part in a $3 billion Indian Air Force aircraft deal. He said he cannot accept the logic given by the MoD for barring PSUs.

"I can't accept MoD's logic that it's a huge contract. We are allowed to grow, aren't we," Patel questioned.

ALSO SEE Row over Indian PSUs being barred from taking part in IAF aircraft deal

He also said that he was not taking on the government but only fighting for his own ministry. "Please don't see politics in it. As the Heavy Industries Minister, I have the right to fight for PSUs," Patel said.

Praful Patel has written to Defence Minister AK Antony asking why PSUs like HAL have been barred. In identical letters to Prime Minister Manmohan Singh and AK Antony, Patel has said that PSUs should be given an equal opportunity and level playing field and that this would encourage healthy competition.

ALSO SEE IAF bars Indian PSUs from taking part in $ 3 billion aircraft deal

"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 the head of the Defence Acquisition Council (DAC), had approved the IAF proposal for procuring these aircraft sidelining the PSUs. Sources in the government have said that HAL is already burdened with projects such as SU30MKI production and upgrades of IAF aircraft fleet including Mirage.

Pate, in his letter, 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.

This comes just ahead of the Prime Minister's visit to Russia and China where this deal is expected to be signed.

(With additional information from PTI)

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