Despite the controversy surrounding the basic trainer deal which is getting murkier each passing day, the Ministry of Defence (MoD) has reportedly cleared the deal in favor of Swiss company ignoring the allegations of unfair practice by one of the contenders.  

Top MoD sources told STRATEGIC AFFAIRS that the deal has been cleared and IAF can hope to get the trainer some time early 2013. But they refused to discuss whether the allegations will have any impact on the over all selection process in case it gets into legal wrangling.    

Although controversies are not new in defence procurement, Indian MoD is now worried over the prospect of much needed basic trainer aircraft meant for the Indian Air Force as the whole deal has got into a murky game of accusations and counter accusations.

The very basis of the selection of L1 which the Swiss Pilatus PC-7 had almost secured for this contract is now under question and the MoD is quite perturbed. If this game continues the IAF will face yet another crunch to train its pilots.

The IAF has been without a basic trainer aircraft since July 2009 when Deepak trainer aircraft were grounded following several crashes and engine failures. Subsequently, it was established that the ‘Deepak’ HPT-32 has two major design flaws.

The MoD had invited RFP last year seeking purchase of 75 aircraft ‘off-the-shelf’ and another 106 to be built by state-owned Hindustan Aeronautics Limited (HAL) under a joint venture arrangement. There were several contenders for the deal.

The deal is estimated to cost $1 billion for which the flight trials were over this summer.

The MoD was trying to seal the deal by July end as the IAF is in urgent need for basic trainer aircraft. But the allegations have marred the prospect of early clinching of the deal.

Now the MoD has reportedly cleared the deal ignoring the legal threats and allegations of unfair treatment.

This time the complaint against Pilatus has allegedly come from Korea Aerospace Industries (KAI) as the latter has complained about unfair trade practice in the whole negotiation process as Pilatus has kept certain cost factors blank in its tender form.

On the basis of this, the cost negotiation and bid evaluation have been challenged as the left out contenders are up in arms against the whole deal as some alleged a special favor was meted out to Pilatus just to win the deal.

According to MoD sources, the KAI complaint has left the whole deal in dry as two more contenders have also raised similar issues against the move to make Pilatus as L1. If Pilatus gets the deal, it would  be the biggest prize in the entire history of the company.

The allegation is Pilatus became L1 as it did not put the Technology Transfer (ToT) cost in the tender form and deliberately kept it blank. This is being alleged that the company did it deliberately as ToT cost should have been mentioned right from the beginning.

Since the company did not put the ToT cost it automatically became L1 and it is being alleged that some insiders may have connived to help Pilatus while other contenders were asked to quote the ToT cost.