Only two companies -- Indian Hindustan Aeronautics Limited (HAL), offering its ALH Dhruv, and European Eurocopter with its twin-engine Panther MB -- were in the race for the deal expected to be worth over Rs 1,000 crore.
The tender, issued in July last year, was cancelled by the Defence Ministry after it was found that the helicopter offered by Eurocopter was not compliant with one of the request for proposal requirements, Defence Ministry officials told PTI here.
With only ALH Dhruv left in the race, the ministry could not go ahead as single-vendor tenders are not allowed by the Defence Procurement Procedure of the ministry, they said.
The procurement was part of Coast Guard's efforts to enhance its capabilities to tackle terrorism and other threats emanating from sea and to prevent any 26/11-type attacks.
The Coast Guard is now planning to issue a fresh tender with new and reviewed specifications in the first quarter of 2013.
In the aftermath of 26/11 attacks, government had cleared several proposals to enhance Coast Guard's aerial surveillance capabilities and had sanctioned acquisition of both fixed-wing aircraft and helicopters.
However, tenders for procuring six maritime surveillance aircraft and dry-leasing 16 helicopters from foreign companies have been scrapped due to one reason or the other in the last four years.
Coast Guard wanted the helicopters to be equipped with surveillance devices to carry out search and rescue roles in coastal areas.