U.S. set to bag contract for Navy surveillance planes from India

U.S. set to bag contract for Navy surveillance planes from India July 25, 2008 - NEW DELHI: The U.S. is set to bag a multi-billion dollar Indian Navy contract for maritime surveillance planes, with both sides deciding to put the contentious issue of signing an end user agreement on the backburner. A Boeing-led consortium had concluded all technical and price negotiations for the $ 2.2 billon contract and the proposal would now be taken to the Cabinet Committee on Security (CCS) for approval, said Ministry of Defence sources. This would be the second major military aviation contract signed with the U.S. this year. Both were in areas, once the preserve of the Russians. The first contract was for six all-weather all-terrain C-130 J military transport planes with Lockheed Martin. All military transport planes in the Indian armed forces’ inventory were of Russian origin. Similar all long-range surveillance planes were from Russia and the Boeing P-8i maritime reconnaissance planes would be breaching that suzerainty. The sources said if the Navy was satisfied with the planes, repeat orders could be placed in future. A sticking point in the deal was the end user agreement which made inspection of the sold platform mandatory to ensure that the technology was not passed on to the wrong hands. India objected to this. Chief of the Naval Staff Admiral Sureesh Mehta, said: “The U.S. may have this kind of [end user] agreements with everyone. I don’t believe in that. We pay for something and we get some technology. What I do with it is my thing.” Instead of stretching the negotiations because of differing views on the agreement, the two sides decided to revisit it later. This was because the first plane would arrive four years after the contract was signed, leaving enough time to discuss and conclude the end user’s agreement. It could not be confirmed whether India would sign a package deal on end user agreements on all high-tech contracts. The end user agreement was in the eye of the storm earlier this year when the Comptroller and Auditor General of India (CAG) panned the Indo-U.S. deal for a huge second hand troop landing ship. “[The] restrictive clauses raise doubts about the real advantages from this deal. For example, there are restrictions on the offensive deployment of the ship and permission would be given to a foreign government to conduct an inspection and inventory of all articles transferred under the end-use monitoring clause of the Letter of Agreement,” the CAG report on INS Jalashwa (formerly USS Trenton) said. However, U.S. Navy Secretary Donald Winter had denied the sale was accompanied by a ban on its use for offensive operations, adding that the U.S. did not limit the use of warships sold to other countries in support of their national defence objectives. The U.S. wanted India to sign the End Use Monitoring Agreement besides the Mutual Logistic Support Agreement, the Communications Interoperability and Security Memorandum of Agreement (CIS MoA). It argued that these pacts would lead to better operational and business ties at the military level between both countries.