Defence Minister A K Antony on Wednesday asked ministry officials to examine the issues raised by Heavy Industries Minister Praful Patel over IAF's move to bar PSUs from participating in its tender to supply 56 transport aircraft expected to be worth over Rs 12,000 crore.
"The Defence Ministry is in receipt of a letter dated 07 October 2013 from the Minister of Heavy Industries and Public Enterprises addressed to the Defence Minister on the matter of procuring 56 aircraft as replacement of the existing AVRO fleet.
"Antony has asked the Defence Ministry officials to examine the issues raised by Patel," the Defence Ministry said in a statement.
In letters to Prime Minister Manmohan Singh and Antony, Patel has said that PSUs should be given an equal opportunity and level playing field and it would encourage healthy competition.
"This being a government/public procurement, an equal opportunity and level playing field is required to be provided to all capable entities irrespective of being 'Public' or 'Private' in nature. This will also encourage healthy competition," he said.
Antony as a head of the defence acquisition council (DAC) had approved the IAF proposal for procuring these aircraft sidelining the PSUs.
Patel, who also holds the Public Enterprises portfolio, further said, "There are many PSUs who meet all the prescribed criterion for participating in this tender, but are being denied the opportunity to participate in this tender only because they are PSUs."
The Indian Air Force has to acquire 56 transport aircraft to replace its ageing Avro fleet. In the tender, issued on May 9 this year, the Defence Ministry had bypassed PSUs like Hindustan Aeronautics Ltd (HAL) and said new aircraft will be produced by the Indian private sector firms.
The tender was issued to eight foreign vendors including American Lockheed Martin, Swedish Saab, Russian Rosoboronexport, Spanish Airbus Military, Italian Alenia and Brazilian Embraer and they will have to find an Indian partner to produce 40 aircraft within India.