On the occasion Rahu Chaudhry, CEO of Tata Power SED said, "This contract won against a Floabla Defence tender of MoD, is a watershed moment, not only for us, but also for increasing Private Sector participation in Indian Defence Sector."
The proposal for the project and the invitation to participate in the contract was started in 2007. The invitation was sent to various global companies. The invitees included US defence major, Raytheon bidding jointly with Tata Power, French Siemens and Thales, and an Italian consortium Finmeccanica along with others.
Tenders for the MAFI contract were issued on January 4, 2008, and vendors submitted bids within six months. After a technical evaluation of the vendors" proposals, the ministry opened their commercial bids on August 2009. The bid was finalised in approximately three-years.
The first airfield to be upgraded under this project will be Hindan in Ghaziabad. This base will be the home base for C-130J military transport aircraft, that is expected to arrive from the US in February 2012.
The 30 IAF airbases include eight key airfields along the Sino-Indian border: Chabua, Tezpur and Hashimara. The IAF has already begun deploying frontline Sukhoi-30MKI fighters to the Tezpur air base. The army is also raising two new divisions to strengthen defences along the Sino-Indian border in coordination with the air-foce.
In Phase-II, 20-28 airfields, including those of the IAF, the Army, the Navy and the Coast Guard, will be modernised. The second phase is expected to be completed in 42 months. The ministry has not yet announced the award of this contract.
On January 1, 2011, the ministry released the first-ever Defence Production Policy that explicitly encourages the private sector to enter defence production.
This contract, MAFI-I, is bitterly contested, with Italian defence company, Selex Sistemi Integrati had petitioned the Delhi High Court after its price bid of Rs 1,141 crore narrowly lost by Rs 47 crore to Tata Power SED"s winning quote (figures from Selex Sistemi Integrati"s petition to the Delhi High Court).
Selex Sistemi Integrati has executed several major contracts to modernise airfields in Pakistan and China over recent years. Selex went to the court in November 2009 but, on November 24, 2010, the Supreme Court rejected its petition, declaring, “This court is not a Robin Hood… do you want us to stop the modernisation of the airfields?"