By Ritu Sharma
New Delhi, Aug 10 (IANS) India has inched closer to acquiring the Boeing P8I maritime patrol aircraft from the US that will give it a marked edge in the Indian Ocean region, with the contract negotiating committee completing its report on price negotiations, a defence official says. “The report was prepared after negotiations with the company on the commercial price. The negotiations followed after Boeing won the technical bid and the trials of the product,” the official said on condition of anonymity.

“The contract, estimated to cost around $2.2 billion, will now go to the defence acquisition committee (DAC) and then to the cabinet committee on security (CCS).”

The defence ministry has been conducting the negotiations on behalf of the Indian Navy and the contract is likely to be inked in New Delhi later this year.

Now that the central government has managed to survive without the Left parties, there is no fear of dealing with the US on this front, the official said.

“With its apprehensions about instability receding, the United Progressive Alliance (UPA) government is rushing the deal,” the official added.

The contract, when signed, will be unique in that it will not be conducted under the US foreign military sales (FMS) programme but as a direct commercial agreement between the Boeing company and the Indian Navy.

The negotiations on the deal were stuck due to India’s reluctance to sign the end-user agreement, under which the company can conduct physical inspections of the aircraft as and when it wants to check if the product is being used for the purpose it has been acquired.

“However, the defence ministry separated the negotiations on the end user agreement from the deal,” the official said.

The P8I is based on the hugely successful Boeing 737 commercial airliner and the first aircraft is currently under construction at Renton in Washington. Its first flight will take place early in 2009 and the first of the 108 aircraft the US Navy has ordered will be delivered in the third quarter of 2009.

“India will be able to leverage on the substantial investment made in the P8I by the US Navy without having to pay for the development costs,” Richard Buck, Boeing’s international programme manager for the P8I, told a group of visiting Indian journalists at the company’s production facility here.

“Under the RFP (request for proposal) of the Indian Navy, the first aircraft has to be delivered within 48 months of the contract being signed and the remaining within an eight-year time frame,” Buck said.

The Indian Navy had, at one stage, contemplated leasing a few Lockheed Martin P3 Orion aircraft as an immediate replacement for its ageing fleet of Soviet-era Il-38 maritime reconnaissance aircraft but dropped the idea in favour of the next generation P8I that has been customised for India.

Besides, there is commonality with the three Boeing Business jets that the Indian Air Force has purchased “and there is, therefore, life cycle cost compatibility”, Buck said.

“To add to this, Boeing’s worldwide logistics, maintenance and training support facilities are already in place,” he said.