Andean Group - October 2015 (ISSN 1741-4466)

Ecuador’s defence minister, Fernando Cordero, announced on 14 October that the government had unilaterally terminated a contract with the Indian manufacturer Hindustan Aeronautics Limited (HAL) from which it had bought seven light multi-mission ‘Dhruv’ helicopters in recent years. The contract was signed back in August 2008. Between October 2009 and January 2015 four of the seven helicopters crashed under different circumstances, resulting in three deaths.

Cordero announced the cancellation of the contract during a press conference. He also posted a serious of messages on Twitter explaining the government’s decision. He said the government had acted in response to “serious breach of contract by HAL”, which he claimed had charged US$3.95m for insurance payments and fines.

Cordero also claimed on Twitter that two of the ‘Dhruv’ helicopter crashes, which took place in January this year, could be attributed to “mechanical failings”, with a malfunction of the automatic pilot responsible in one case and the lack of power supply to the tail rotor engines in the other. Cordero said the remaining three helicopters would be permanently grounded.

One of the helicopters, which had various special features and had been assigned to transport President Rafael Correa and other officials, crashed in February 2014 in San Roque, Huigra, in the province of Chimborazo. It was flying from Quito to Guayaquil. Correa was not onboard at the time. Three of the four crew members were killed.

It is worth noting that back in February, in the wake of the two most recent crashes, Correa had defended the purchases. Correa said that the two crashes were down to human failings and that it would be “serious” if they were found to be down to mechanical failings. He was responding to local media censure of the ‘Dhruv’ contract as poor business by the government given their safety record in Ecuador.

The total cost of the seven helicopters purchased from HAL was US$45.2m. According to Ecuador’s comptroller general’s office the contract with the company runs until 2018 and to this date Ecuador has only met US$37.2m of the cost.

As the government has now decided to cancel this contract unilaterally, Cordero took every advantage to disparage the quality of the helicopters. Cordero argued that HAL was in breach of contract for failing to provide various spare parts requested by the Ecuadorean armed forces (FAE). He also argued that they lacked a whole array of essential systems, such as tracking and emergency contact systems, which he said had been promised, and collision evasion systems.

The government decided to purchase the ‘Dhruv’ helicopters at a time of mounting diplomatic tension with Colombia. The government was determined to improve security along its shared border after Colombia’s armed forces made a border incursion into the Ecuadorean border province of Sucumbíos in 2008. ‘Raúl Reyes’ (Luis Edgar Devia Silva), a senior leader of the Fuerzas Armadas Revolucionarias de Colombia (Farc), was killed in an aerial bombardment of a guerrilla camp in Sucumbíos. The government also bought four Chinese-made radar systems at a total cost of US$80m, which they erected along the shared border.

• HAL responds

The directors of Hindustan Aeronautics Limited (HAL) told the Indian station NDTV that it had not been officially notified by Ecuador of its intention to cancel its ‘Dhruv’ contract. They also said that they had not received details of Ecuador’s defence ministry’s investigations that detected the supposed “mechanical failings” responsible for bringing down two of the helicopters purchased by Ecuador.