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India to Buy 80 Mi-17-1V Helicopters
05-Jun-2008 15:22 EDT
Indian Mi-17s
In October 2006, the Indo-Asian News Service reported that the Indian Air Force will buy 80 medium lift multi-role Mi-17 1V helicopters from Russia. Indias Chief of Air Staff Marshal S.P. Tyagi reportedly told the news agency that the contractual detail would be finalized within a few months, that Russia will start delivering the helicopters in 2007, and that deliveries would finish within a year. MosNews estimated the deals value at approximately $662 million, with the exact value depending on ancillary equipment like avionics.
The deal is the result of a dance over time involving both Sikorsky and Indias HAL, and the Mi-17 1V incorporates a few changes to the well-known Mi-17 already in service with India. Of course, a couple of months in Indian procurement time turns out to be over 2 years and in a familiar scenario, Russia is now asking for far more than the originally agreed deal terms
Indian Mi-17
July 2006 reports had characterized the sale as conditional on Russia buying 20 of Indias Dhruv light helicopers, but this has not mentioned since and appears to have been dropped. Sikorsky had also bid on the contract, but the IAF reportedly believed the the Mi-17s commonality with the existing fleet made it a batter choice.
According to Aeronautics.ru, the Mi-17-1V Helicopter is manufactured in the following versions: combat; assault (carrying about 30 airborne troops); ambulance (with medical equipment and 12 stretchers); and transport (airlifting up to 4,000 kg in the cargo cabin and up to 4,000 kg on external sling). Its two TV3-117BM Turboshaft Engines are rated at 1,900 hp each, giving this variant greater service/hovering ceiling, improved performance in hot and high conditions, and better load capacity. An enlarged rear door with a loading ramp substitutes for the older clamshell doors, making it quicker and easier to load and unload troops and supplies. The avionics set includes radio and flight navigation equipment used to fly the helicopter under day, night, and adverse weather conditions, and de-icing equipment.
These characteristics are especially important on Indias mountainous northern and northeastern borders. India already operates both the Mi-17 and the improved 1V version, and StrategyPage notes that the country has about 150 Mi-17 and Mi-8 helicopters in service.
The Mi-17 isnt just popular with India, however, and recent wins indicate that Russia may have a strong commercial winner on its hands. The American UH-60 is more expensive than the Mi-17, and lacks the tactical flexibility of its rear ramp option. The European NH90 is more expensive still, and offers greater capabilities but suffers from serious delivery and availability problems. The Mi-17, in contrast, offers comparable performance for less, no political restrictions on their use, greater integrated armament capabilities than its competitors, optional versions that include western engines and avionics, and availability that has remained good thus far. While competition can also be expected from Eurocopters Puma family, the Mi-17 looks set to remain a strong export success.
Doing the Deal
Indian Mi-17 1V
(click to view full)Defense News claims that negotiations for Indias recent program were finalized during an Oct 18/07 defense ministers meeting meeting in Russia, and a senior defense ministry official claims that contracts will be inked with Rosoboronexport within the next 2 months.
The $310 million worth of upgrades under the reported deal will be carried out on 46 Mi-8, 78 Mi-17 and 48 Mi-171V helicopters to add instrument landing system radars, very high-frequency omni-directional range radars, an advanced weather radar and a digital moving map display. The Mi-17s will also receive Bharat Electronics Tarang 1B radar warning receivers, and missile approach warning systems. Other upgrades are possible, mostly with respect to weaponry, but will be floated as separate tenders if approved.
If the report is correct, 2 helicopters of each type will upgraded in Russia, and the rest performed by state-owned HAL under license at a rate of 36 helicopters per year.
The purchase of 80 more medium-lift Mi-171V helicopters will add to the fleet, and will reportedly cost about $140 million and be finalized by the end of 2008.
Updates
June 1/08: The Press Trust of India reports that Russias state-run Rosoboroexport has hiked the price tag for the Mi-171Vs from $650 million or so agreed in March 2007, to over a billion dollars. This comes on the heels of similar moves by Russia with respect to Indias aircraft carrier deal, and PTI reports that ...the demand for more than fifty per cent price hike has irked the Ministry of Defence.
The problem for Indias MoD is that Russia has most of the negotiating leverage. The competing European NH90 medium helicopter is still badly backlogged, as is the American CH-47 Chinook heavy-lift helicopter that has become so popular in Afghanistans hot and high conditions. The European medium-heavy EH-101 is in beter shape than the NH90, but its still backlogged as well to the point that Britain bought Denmarks fleet to upgrade its front-line capacity, rather than waiting for delivery from the factory. That leaves Russias Mi-17, which has abundant international orders and does not depend on India, adoption of the American S-70 Black Hawk with its corresponding removal of key features and questionable hot and high performance, or possibly Eurocopters EC532/EC725 Cougar. Inducting the Black Hawk or Cougar into service would come with an additional cost of its own, however, since they would not be compatible with Indias existing 12 squadrons of Mi-8 and Mi-17 helicopters. If additional training, maintenance tooling, spare parts inventory, et. al. adds 30-40% to the helicopters procurement cost, these alternatives may not even be able to offer much of a financial advantage over the revised Russian deal.
May 21/07: An Austrian firm named Rite Approach Ltd. is suing Russian firm Kazan, who made a deal with Rite Approach and then paid the 16% commission on a (previous) deal for 16 Mi-17 helicopters to Russian state firm Rosoboronexport instead. As IBN notes: Whats interesting to note here is the fact that payment of undisclosed commissions is banned by India.
India to Buy 80 Mi-17-1V Helicopters
Russia has found a good way of doing business with India. First sign the deal and then raise the price.
Regards,
05-Jun-2008 15:22 EDT
Indian Mi-17s
In October 2006, the Indo-Asian News Service reported that the Indian Air Force will buy 80 medium lift multi-role Mi-17 1V helicopters from Russia. Indias Chief of Air Staff Marshal S.P. Tyagi reportedly told the news agency that the contractual detail would be finalized within a few months, that Russia will start delivering the helicopters in 2007, and that deliveries would finish within a year. MosNews estimated the deals value at approximately $662 million, with the exact value depending on ancillary equipment like avionics.
The deal is the result of a dance over time involving both Sikorsky and Indias HAL, and the Mi-17 1V incorporates a few changes to the well-known Mi-17 already in service with India. Of course, a couple of months in Indian procurement time turns out to be over 2 years and in a familiar scenario, Russia is now asking for far more than the originally agreed deal terms
Indian Mi-17
July 2006 reports had characterized the sale as conditional on Russia buying 20 of Indias Dhruv light helicopers, but this has not mentioned since and appears to have been dropped. Sikorsky had also bid on the contract, but the IAF reportedly believed the the Mi-17s commonality with the existing fleet made it a batter choice.
According to Aeronautics.ru, the Mi-17-1V Helicopter is manufactured in the following versions: combat; assault (carrying about 30 airborne troops); ambulance (with medical equipment and 12 stretchers); and transport (airlifting up to 4,000 kg in the cargo cabin and up to 4,000 kg on external sling). Its two TV3-117BM Turboshaft Engines are rated at 1,900 hp each, giving this variant greater service/hovering ceiling, improved performance in hot and high conditions, and better load capacity. An enlarged rear door with a loading ramp substitutes for the older clamshell doors, making it quicker and easier to load and unload troops and supplies. The avionics set includes radio and flight navigation equipment used to fly the helicopter under day, night, and adverse weather conditions, and de-icing equipment.
These characteristics are especially important on Indias mountainous northern and northeastern borders. India already operates both the Mi-17 and the improved 1V version, and StrategyPage notes that the country has about 150 Mi-17 and Mi-8 helicopters in service.
The Mi-17 isnt just popular with India, however, and recent wins indicate that Russia may have a strong commercial winner on its hands. The American UH-60 is more expensive than the Mi-17, and lacks the tactical flexibility of its rear ramp option. The European NH90 is more expensive still, and offers greater capabilities but suffers from serious delivery and availability problems. The Mi-17, in contrast, offers comparable performance for less, no political restrictions on their use, greater integrated armament capabilities than its competitors, optional versions that include western engines and avionics, and availability that has remained good thus far. While competition can also be expected from Eurocopters Puma family, the Mi-17 looks set to remain a strong export success.
Doing the Deal
Indian Mi-17 1V
(click to view full)Defense News claims that negotiations for Indias recent program were finalized during an Oct 18/07 defense ministers meeting meeting in Russia, and a senior defense ministry official claims that contracts will be inked with Rosoboronexport within the next 2 months.
The $310 million worth of upgrades under the reported deal will be carried out on 46 Mi-8, 78 Mi-17 and 48 Mi-171V helicopters to add instrument landing system radars, very high-frequency omni-directional range radars, an advanced weather radar and a digital moving map display. The Mi-17s will also receive Bharat Electronics Tarang 1B radar warning receivers, and missile approach warning systems. Other upgrades are possible, mostly with respect to weaponry, but will be floated as separate tenders if approved.
If the report is correct, 2 helicopters of each type will upgraded in Russia, and the rest performed by state-owned HAL under license at a rate of 36 helicopters per year.
The purchase of 80 more medium-lift Mi-171V helicopters will add to the fleet, and will reportedly cost about $140 million and be finalized by the end of 2008.
Updates
June 1/08: The Press Trust of India reports that Russias state-run Rosoboroexport has hiked the price tag for the Mi-171Vs from $650 million or so agreed in March 2007, to over a billion dollars. This comes on the heels of similar moves by Russia with respect to Indias aircraft carrier deal, and PTI reports that ...the demand for more than fifty per cent price hike has irked the Ministry of Defence.
The problem for Indias MoD is that Russia has most of the negotiating leverage. The competing European NH90 medium helicopter is still badly backlogged, as is the American CH-47 Chinook heavy-lift helicopter that has become so popular in Afghanistans hot and high conditions. The European medium-heavy EH-101 is in beter shape than the NH90, but its still backlogged as well to the point that Britain bought Denmarks fleet to upgrade its front-line capacity, rather than waiting for delivery from the factory. That leaves Russias Mi-17, which has abundant international orders and does not depend on India, adoption of the American S-70 Black Hawk with its corresponding removal of key features and questionable hot and high performance, or possibly Eurocopters EC532/EC725 Cougar. Inducting the Black Hawk or Cougar into service would come with an additional cost of its own, however, since they would not be compatible with Indias existing 12 squadrons of Mi-8 and Mi-17 helicopters. If additional training, maintenance tooling, spare parts inventory, et. al. adds 30-40% to the helicopters procurement cost, these alternatives may not even be able to offer much of a financial advantage over the revised Russian deal.
May 21/07: An Austrian firm named Rite Approach Ltd. is suing Russian firm Kazan, who made a deal with Rite Approach and then paid the 16% commission on a (previous) deal for 16 Mi-17 helicopters to Russian state firm Rosoboronexport instead. As IBN notes: Whats interesting to note here is the fact that payment of undisclosed commissions is banned by India.
India to Buy 80 Mi-17-1V Helicopters
Russia has found a good way of doing business with India. First sign the deal and then raise the price.
Regards,
