EADS protests over shelved India chopper deal

PROTEST: EADS says it is to challenge 'the very grounds of the cancellation of the deal' (AFP).

European aerospace giant EADS has lodged a protest with the Indian government over the cancellation of a deal to sell 197 helicopters to the country's army, Indian defence sources said Monday.

Eurocopter, a unit of European Aeronautic Defence and Space Company (EADS), had won a tender for the sale, but this was called off by New Delhi on December 6 over alleged irregularities in the bidding process.

The final signing of the $600 million deal was also supposed to be one of the highlights of a visit to India next month by French President Nicolas Sarkozy.

Indian defence ministry officials, who asked not to be identified, said EADS was "challenging the very grounds of the cancellation of the deal."

They said a visiting delegation of French military officials would also be discussing the issue with Indian counterparts later this week.

EADS declined to comment, but a company official said the consortium would be holding a news conference on the controversy on Tuesday.

Earlier this month the defence ministry's spokesman, Sitanshu Kar, said the deal stood cancelled and that a new tender would be issued soon.

The defence ministry has not publicly said why the deal was scrapped, but senior defence sources and press reports have alleged Eurocopter used a local firm - Global Vectra Helicorp - to help broker the deal despite an Indian ban on the use of middlemen in defence deals.

Eurocopter was also accused of presenting a civilian helicopter instead of a military version for statutory field trials by the Indian army.

Press reports have also claimed the Indian defence establishment came under pressure from US firm Bell Helicopter.

Some Indian government officials have said Indian military experts visited Eurocopter plants in July 2005 to evaluate the military version of the helicopter - and that the cancellation of the deal could be now probed.

Eurocopter generates 54% of its total 3.8-billion-euro (5.4-billion-dollar) annual sales through military contracts.

It was contracted to sell 60 helicopters in a "fly away" condition to the Indian army, while the remaining 137 were to be assembled at state-owned Hindustan Aeronautics Ltd in India.

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