Giant Indian helicopter deal faces delays due to corruption fears

NEW DELHI (AFP) - A giant contract to supply 197 light helicopters to the Indian army which is being sought by European and Russian firms faces more delays due to corruption fears, reports said on Wednesday.

European manufacturer Eurocopter and Russia's Kamov are competing for the contract, worth an estimated US$550 million (S$681 million) and seen as vital for Indian troops posted in high altitudes such as the mountainous border with China.

Indian newspapers reported that the army has asked for a probe into allegations that a brigadier involved in testing the helicopters had asked for a bribe to swing the contract in favour of Italy's AgustaWestland.

The claim came to light during a separate investigation into a deal won in 2010 by AgustaWestland to supply 12 helicopters for use by Indian VIPs. The Italian firm was eventually disqualified from the 197 light-helicopter contest.

The Times of India said the controversy around the light helicopter deal "has virtually pushed this critical acquisition into cold storage".

Both Eurocopter and Kamov were hoping to secure the deal in 2013 after years of delays due to India's slow decision-making and corruption allegations which regularly disrupt the procurement process.

The tender was originally awarded to Eurocopter in 2007 but was scrapped when graft allegations surfaced in the Indian media.

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