Despite several reports pointing the flaw, the air force didn’t finalise key maintenance pact with Pilatus in 2011; follow-on order is stalled
The Central Bureau of Investigation (CBI) is hot on the heels of Swiss aircraft manufacturer Pilatus, probing allegations of corruption and money laundering. However, due to this the Indian air force’s fleet of basic trainers is now without a maintenance contract — an unhappy situation that will make it increasingly complex to support the trainers in the future.
The CBI is conducting a preliminary enquiry to probe dealings between Pilatus and arms agent Sanjay Bhandari, who managed to hoodwink authorities by fleeing to London. The investigating agency is probing allegations of graft in the 2012 deal to acquire 75 Pilatus PC 7 Mk1 aircraft.
The role of several top air force officers, including a former Chief of Air Staff is under the scanner with the agency seizing official files and documents related to the deal negotiations, the contract signing and chain of approvals despite several news reports that pointed out discrepancies.
The CBI has also approached Swiss authorities for sensitive banking details as part of its probe into the matter. These details include queries on transactions between Pilatus and Bhandari, who was the promoter of Delhi based firm Offsets India Solutions (OIS).
The Swiss contract, which was inked at a cost of Rs 2800 crore to India, first sparked controversy in 2011 when a Korean competitor protested in a series of letters to the defence ministry that a key deviation had led to the selection of Pilatus.
Ironically, all these pointed to discrepancies in the maintenance pact that was not processed by the air force.
Besides the off-the-shelf purchase of trainers, the Swiss company was also supposed to transfer technology for the maintenance of the fleet. As per conventional wisdom, the maintenance pact should have been signed along with the contract, so that the foreign player did not get leverage later to negotiate an unrealistic price.
The technology transfer was to set up repair and support workshops in India that would keep the fighters flying. In 2011, the air force had insisted that the “maintenance transfer of technology (MTOT)” is being negotiated as per the process.
However, even now, the pact has not been signed due to the high price being quoted.
Sources have told ThePrint that a fresh effort is now on to negotiate the technology transfer through a deal between Pilatus and the air force’s Base Repair Depots (BRDs).
This, however, could prove to be difficult as the defence ministry has already clamped down on an additional order for 38 Swiss trainers and the CBI continues its probe in India and Switzerland.