Decision on which plant will produce Mi-172 for Malaysia may threaten deal according to sources

Published: 12/15/1999

According to sources, the signing of the $200m contract for the delivery of Mi-172 with local content to Malaysia, may have stalled due to a dispute between Mil and the helicopter"s two producers. Ulan-Ude Aviation Plant, one of the two producers of Mi-8M/Mi-17/Mi-172 series, along with Kazan Helicopter Plant, recently announced that it signed a contract with Malaysian company, SME Aviation, regarding the supply and maintenance for the Mi-17 in the region. According to SME, it will be involved in the production of ramps and installation of new avionics in the Mi-17. Malaysia"s requirement for helicopters of this class is reported to be in the range of 40 helicopters and Ulan-Ude is looking for the first order for six aircraft early in the New Year. The potential take-up of the Malaysian orders by Ulan-Ude has, however, caused problems for Mil in terms of which factory should produce the helicopters. This problem has reportedly dogged orders in the past, including an unsuccessful bid to supply Taiwan with ten units in 1998. Reports suggest that Mil wishes Ulan-Ude to fulfill the potential order. The reason for the dispute is that both factories produce a wide range of the many Mi-17 variants, of which there are over 18, and the Kazan factory has traditionally exported 4500 Mi-17s to date in contrast to Ulan Ude"s 100. It seems, however, that Ulan-Ude, confronted with a dormant domestic market, has set out to be a competitor to Kazan by actively negotiating to secure the Malaysian contract, not only with SME, but also with another Malaysian producer, Airod, expected to be its partner, prior to the SME agreement.

Article ID: 1225