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Ukraine blames Russia of 'fake propaganda' for thwarting IAF contract

Vyacheslav A. Boguslayev, CEO of the Ukrainian aircraft and helicopter engine manufacturing company Motor

Ukraine blames Russia of fake propaganda for thwarting IAF contract

Sentinel Digital DeskBy : Sentinel Digital Desk

  |  22 Oct 2020 6:27 AM GMT

New Delhi: Vyacheslav A. Boguslayev, CEO of the Ukrainian aircraft and helicopter engine manufacturing company Motor Sich, has accused Russia of initiating a "fake media propaganda" in an alleged bid to thwart his company's chances of winning the Indian Air Force MI-17V5 helicopter engine overhaul contract.

It was recently reported that Motor Sich's majority stakes were owned by the China's Skyrizon and it had access to advanced military technology. However, in a letter written to the Indian Ministry of Defence (MoD), the Motor Sich CEO has made a strong case against China holding major stakes in the company.

Though the contract has not yet been awarded but having a Chinese footprint in an Indian defence contract is a matter of concern, especially at a time when both countries are embroiled in a border scuffle for the past many months.

In his letter to Joint Secretary & Acquisition Manager (Air) Sanjai Singh, Boguslayev hits out at the Russian Federation for trying to scuttle the deal through planted articles in the media. "These articles contained false information that Motor Sich JSC is owned and operated by a Chinese company and that it does not have rights to perform ROH (repair and overhaul) of VK-2500-03 engines. In our opinion, the purpose of these articles is an attempt to discredit Motor Sich JSC and the desire to eliminate it from participation in this tender. It would be profitable for the Russian side to have no competitors in all tenders for ROH of engines for helicopters of the Indian Air Force, which would allow Russian companies to repair engines at inflated prices."

He further cites a similar previous tender of 2016 for the repair of VK-2500-03 engines for MI-17V5 helicopters, which it won eventually but not without hiccups as there too Russia apparently tried to scuttlle Ukraine's chances by similar means.

Originally known as Motorostroitel during the Soviet era, the company was re-registered in 1994 as Motor Sich through State Property Fund of Ukraine (SPFU). In 2016, Motor Sich took loan on interest from the Chinese company Skyrizon, which it has to repay with interest by 2026. Loan borrowing from China continued after the first phase as Motor Sich diversified, but the Chinese stakes gives it a five percent partnership in Motor Sich with no access to advanced defence technology, the letter clarifies. It further adds that there was, "no direct financing by China or purchase of shares or joint ventures".

Further the letter says that ownership and partnership details of Motor Sich are on its website and Ukrainian law is followed in foreign investment and economic activity.

In its communication with the IAF, Russian JSC UEC (Joint Stock Company United Engine Corporation) Klimov informed the Indian side about being the OEM (original equipment manufacturer) of the Mi-17V5 hence the overhauling of VK2500 engines of the mentioned helicopters should be undertaken by them and that they had cancelled the license to Motor Sich for any such activity in 2018.

Motor Sich in its reply establishes itself as the OEM of the VK2500 engines and acknowledges the existence of a License Agreement signed in 2002 between Motor Sich and M/s Klimov for mass production of these engines and defends its position for the contract as it is the OEM. (IANS)

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