Amid allegations of bribery attempt in the 197-chopper deal, India has asked the two vendors in the race to extend the validity of their commercial bids till the end of this year, making it clear that the procurement is in for further delay.
The validity of the commercial bids of the two firms -- European Eurocopter and Russian Kamov -- is expiring by the end of this month.
The Director General (Acquisition) in the defence ministry has asked the Eurocopter and Kamov to extend the validity of their bids up to December, defence sources told PTI in New Delhi.
The development makes it clear that the procurement of the light helicopters for the Army and Air Force, which has already been in pipeline for over three years, is in for further delay.
The move comes against the backdrop of the Army asking the defence ministry to conduct a probe into allegations that a Brigadier, who was in-charge of the trial team for 197 light choppers, demanded a Rs 25 crore bribe from AgustaWestland to swing the deal in its favour.
AgustaWestland, an Anglo-Italian company, was one of the contenders in the deal for 197 helicopters but lost out in the race during trials.
The allegations against the Brigadier surfaced during investigations into the 12 VVIP chopper deal with AgustaWestland, which is shrouded in a controversy over charges of kickbacks to the tune of Rs 360 crore.
"The Army Headquarters has asked us to investigate the matter before taking any decision on the future of the deal, in which only two firms European Eurocopter and Russian Kamov are left in the race as AgustaWestland was eliminated before trials itself," a Defence Ministry source had said.
The allegations have led to delay in the finalisation of the deal for 197 helicopters for the Army and the IAF to replace its fleet of vintage Cheetah and Chetak choppers.
Recently, in a Defence Acquisition Council (DAC) meeting, the Ministry had asked the Army to take 'responsibility' that there was no wrongdoing in the charges against the officer. However, the Army asked the Government to conduct a probe before taking any further decision, the sources said.
The DAC also has to take a call on whether to allow the deviations from the tendering process by the two companies and a Special Technical Oversight Committee (STOC) has submitted its report in this regard.
After the charges came up, the Ministry had asked the Italian government to provide the name and relevant documents relating to the alleged involvement of the Brigadier in the ongoing process for acquisition of 197 helicopters for the Army.
The allegations have been levelled against the officer in a letter allegedly sent by an AgustaWestland official in India to his superiors in Italy saying the Brigadier was seeking $5 million for facilitating the deal in their favour.
The deal for procuring 197 light choppers has already been cancelled once in the last stages even after the selection of Eurocopter.
The officer has denied the charges against him in a letter written by him.