Contracts To Be Affected At DEFEXPO 2014 Owning To Upcoming Elections?

DEFEXPO 2014 may see fewer contracts this year as India heads towards a general election in the coming months.

With a political shift in New Delhi imminent later this year, defense exhibitors say they are unsure of winning any major contracts at the show, Defenseworld.net has learned.

Exhibitors are also reportedly wary of contract cancellations following with the recent annulment of the AgustaWestland VVIP helicopter deal following bribery allegations.

The Indian Defense Ministry has decided to ban 27 local and international defense firms including Finmeccanica and its five subsidiaries from attending the show in New Delhi this week.

Meanwhile, major projects like that Futuristic Infantry Combat Vehicle (FICV) program worth $10 billion are also possibly on the backburner.

India still intends to pursue the FICV project under the “Make” procedure of the Defence Procurement Procedure of 2008 (DPP-2008), under which Indian vendors develop major defence platforms.

Which means the MoD will fund 80% of the cost of developing a prototype that must be at least 30% indigenous; the Indian DAs pays the remaining 20%. However, the status on this project remains largely unclear.

Tata, an FICV contender, will meanwhile present for the first time a brand new specialty vehicle, the Wheeled Armoured Platform (WhAP) at Defexpo 2014.  The vehicle platform, developed jointly with the DRDO’s Vehicle Research & Development Establishment (VRDE), is a mobility platform featuring a Norwegian-built Kongsberg MCT-30-R medium-calibre remote turret sporting a US-built ATK 30mm/40mm Mk44 Bushmaster automatic cannon as a primary weapon and a secondary FN Herstal M240 7.62mm general purpose machine gun.

India’s other major procurement the MMRCA deal with Dassault has been delayed since the winner was announced in 2012. Although the contract is expected to be signed later this year, an exact timetable has yet to be announcement.

The Indian MoD is reportedly close to finalizing a $160 million contract with Tata Motors for developing heavy-duty military vehicles. The deal to supply of 1,239 Tata Motors-built six-wheel-drive high mobility vehicles (HMV), will be fitted with material handling cranes, has the option of a follow-on order for 600 more units, according to the Economic Times. The company is expecting the deal to be concluded soon.

Tata Motors is also participating in two other bids - a $64 million eight-wheel-drive high mobility trucks contract and a $12 million deal for the Field Artillery Tractor (FAT).

However, it is unlikely the acquisition contracts will be signed anytime soon, keeping in mind ministry’s revised decision on its defense budget. According to the report, ministry has moved capital expenditure valued $1.2 billion to revenue expenditure category.