India’s $1.4 Billion Airbus MRTT Aircraft Purchase Put On Hold

India’s US$ 1.4 billion (INR 9,000 crore) project to acquire six Airbus-330 mid-air refueling aircraft or tankers has been put on hold after the government referred the deal to the defense ministry’s vigilance department for clearance.

"The work of the contract negotiations committee (CNC) had been stopped till the vigilance wing ascertains the status of the old cases," Times Of India quoted unnamed source as saying. 

The contract with Airbus has been delayed due to the pending inquiries against the European consortium dating back to the mid-1970s. The procurement case was sent to the law ministry for an opinion after a member of parliament wrote to the MoD against it. "But at least one of the CBI cases was found to have been closed due to lack of evidence," said a source.

The mid air refueling tanker would double the strike range of fighters and bombers and would bolster IAF’s strategic reach.

Two-engine Airbus-330 MRTT (multi-role tanker transport) aircraft was selected over the four-engine Russian Ilyushin-78 in January 2013. The finance ministry had baulked at the high price of the European aircraft and sought the defence ministry to seek buyers afresh.

A new RFP was released in September 2010. The budget was increased to $2 billion and included lifecycle costs in the price arguing that the Airbus plane would work out cheaper in the long term over its Russian competitor if lifecycle costs were to be considered.