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Heavy Lift Helicopter Acquisition Project of the Philippine Air Force

The Philippine Air Force (PAF) has embarked on the acquisition of Heavy Lift Helicopters as part of its 2nd List of Horizon 2 Phase projects.

This project will provide the PAF with larger helicopters than what it currently has, to fit certain combat and peacetime requirements in tactical airlift and heliborne operations.

The Mil Mi-171Sh helicopter. Photo taken from AIN Online.

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Project Summary:

Heavy Lift Helicopter Acquisition Project:

Note: Edited as of 02 June 2021.

* End User: Philippine Air Force (still being determined if 205th Tactical Helicopter Wing or 220th Airlift Wing)

* Quantity: 16 units (plus potential 1 free unit)

* Modernization Phase: Horizon 2 Priority Projects of RAFPMP

* Project ABC: Php12,800,000,000.00

* Acquisition Mode: Government-to-Government (G2G) Procurement with Russian government (Sovtechnoexport and/or Rosoboronexport)

* Source of Funding: Multi-Year Contractual Authority for 3 years, using General Appropriations Act (GAA) from FY2020 to FY2022.

* SARO Release: 

   - SARO-BMB-D-20-0018320 worth Php1,919,626,490.00 (15% initial payment) dated 29 October 2020, released 04 November 2020, placed on hold.

    - new SARO with same amount released on 27 May 2021.


* Winning Proponent: Russian Helicopters, through Sovtechnoexport or Rosoboronexport

* Product for Delivery: 

    - 16 Mil Mi-171, exact variant still being confirmed although most like Mi-171Sh
    - unconfirmed report of 1 Mil Mi-171 in VIP configuration, most lilkely Mi-171A2

* Contract Price: Php12,797,509,932.00

* Residual Price: Php2,490,068.00

* First post by MaxDefense: 28 June 2019

* MaxDefense Searching Hashtag:
 #PAFHeavyLiftHelicopterAcquisition

* Status:  SARO for initial 15% funding was released on 04 November 2020, but was put on hold due to unspecified issues believed to be related to CAATSA. New funding for 15% initial payment released on 27 May 2022, awaiting for contract signing which is expected by 3rd quarter 2021.


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Overview:

The Philippine Air Force has been eyeing heavy lift helicopters since the 1970s, with the Boeing CH-47 Chinook already being considered during modernization programs for the last 40 years.

In 1978, the US government actually considered selling the CH-47D Chinook, which was a new variant back then, in lieu of a request for 36 units of DHC-5 Buffalo medium lift aircraft. According to US declassified reports, if contract was signed for the CH-47D Chinook, they were projected to enter service with the PAF by 1981. But this did not push through due to the Philippine economy's poor performance.

The CH-47D Chinook of the Spanish Army. Photo credits to original source.

The 1995 AFP Modernization Program also listed a requirement for Heavy Lift Helicopters, with a total of 4 units requested to enter between 1995 to 2010. The CH-47D Chinook was also eyed by the PAF to meet this requirement. Again, due to the poor performance of the Philippine economy, the entire program did not push through, including the acquisition of  Heavy Lift Helicopters.

A requirement for Heavy Lift Helicopters again surfaced when the AFP Modernization Program was revised and extended to cover years 2013 to 2027. But it was programmed to be included in the Horizon 3 phase of the new project.

Since the AFP and DND have an option to frontload projects depending on requirements, the Heavy Lift Helicopter Acquisition Project was moved to the 2nd List of Horizon 2 phase, which is an offshoot of the Horizon 2 phase depending if the government has extra funds available to frontload Horizon 3 projects.

Again, the CH-47 Chinook family was in eyed by the Philippine Air Force, this time a newer variant called the CH-47F being available fresh from the factory. Other helicopters were also considered including the AgustaWestland AW101, as well as Medium Helicopters like the Airbus H225M Caracal, and the Russian Helicopters Mil Mi-171Sh Hip.

Also considered was the AgustaWestland AW101 Merlin. This example is with the Danish Air Force. Photo taken from Wikipedia.

Originally, the PAF's Technical Working Group decided that the CH-47F Chinook was the only helicopter that met the PAF's requirements for heavy lift helicopters, which made it closer for the PAF to acquire the CH-47F Chinook.

The CH-47F Chinook, these examples with the Indian Air Force. Photo credits to IAF.

But it appears that this was overturned by the Department of National Defense (DND), which asked the PAF to reconsider its specifications due to political reasons. According to MaxDefense Philippines, the president himself could be involved in the decision of the DND to push the PAF to reconsider.


It was reported by MaxDefense Philippines that Pres. Rodrigo Duterte was not in favor of the Philippine Air Force and DND's decision to select the Sikorsky S-70i Black Hawk for its Combat Utility Helicopter requirements, wherein 16 units were ordered for less than Php13 billion. But in the end, the president allowed the deal with Sikorsky to push through under one condition - that the PAF should also order helicopters from Russia, either transport or attack helicopters, or both.

With the PAF in a tight situation, the Heavy Lift Helicopter project was again re-evaluated with changes in the specifications, and it was recommended in the end that the Mil Mi-171 meets the PAF's revised requirements and is the most ideal due to the number of helicopters (quantity) the Russians have agreed to sell based on the Php12.8 billion budget.

While Russia agreed to sell 16 Mil Mi-171 helicopters, with a potential donation of 1 Mi-171 helicopter for VIP requirements, apparently Boeing was only able to offer 4 units under Foreign Military Sales (FMS) program, or 5 units under Direct Commercial Sales (DCS) program.

The Mil Mi-171, this example with the Russian Army. Photo taken from Avia Russia.

Negotiations with Russia's Rosoboronexport commenced in 2018, although issues related to the US' Countering America's Adversaries Through Sanctions Act (CAATSA) was deemed to be an obstacle to a deal being reached between the DND and Rosoboronexport.

It was noted that as of March 2019, a new Russian state shell company SOVTECHNOEXPORT appears to be the one handling the deal between the Philippines DND and Russia on the potential acquisition of the Mil Mi-171 helicopter.

As of 3rd quarter 2020, a Notice of Award (NOA) was awarded in favor of the Russian government, although it remains to be seen if it was through SOVTECHNOEXPORT or ROSOBORONEXPORT.

Since the Mil Mi-171 is actually a Medium Helicopter rather than a Heavy Lift Helicopter, it remains a question as to why the Philippine Air Force decided to use the Heavy Lift Helicopter Acquisition Project as it means to acquire the Mil Mi-171, rather than frontload the Medium Lift Helicopter Acquisition Project, which is also slated under Horizon 3 phase, as it is more appropriate for the helicopter being sought after?

Also, since the PAF actually has requirements for helicopters that are larger than the Mil Mi-171, will they be raising a new Heavy Lift Helicopter Acquisition Project under the Horizon 3 phase, with specifications closer to than of the CH-47F Chinook rather than medium helicopters like the Mil Mi-171?



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U P D A T E S:
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20 June 2018:

Russian media outlet Sputnik reported that National Security Adviser Hermogenes Esperon talked to them on matters, including plans to acquire the Russian Helicopters Mil Mi-171 helicopter, which also goes in line with an earlier interview by Sputnik with Defense Usec. Cardozo Luna.

Previously, MaxDefense reported that the Medium and even the Heavy Helicopter Acquisition plans by the Philippine Air Force were already given an in-principle approval by Pres. Duterte on one condition - that they be bought from the Russians, specifically the Mil Mi-171Sh. This was despite the PAF being more in favor of going for the Sikorsky S-92 Superhawk and the Boeing CH-47E Chinook for the medium and heavy helicopters, respectively.

This was said to have been the pre-condition of Pres. Duterte as well when he agreed to go ahead with purchasing the Sikorsky S-70i Black Hawk for the PAF's Combat Utility Helicopter requirement despite his opposition to going for American products.

So in MaxDefense's opinion, there is indeed a strong chance that the DND would push to acquire the Mil Mi-171Sh, although the Medium and Heavy Helicopter acquisition projects are still among those being pushed as part of the proposed 2nd List of Horizon 2 if the government finds more funds beyond the Php300 billion approved by Pres. Duterte for implementation under the Horizon 2 Priority Projects last June 2018.

Now, the DND has to do something on how to go around CAATSA, since its proven that its real.

From left: Mi-17 and Mi-26 helicopters from Russian Helicopters. Photo taken from Sputnik.

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28 June 2019:

On the sidelines of the ongoing Russian ARMY 2019 International Military-Technical Forum in Moscow, Russia, Defense Usec. Raymundo Elefante told Russian media outlet Sputnik that the acquisition of Mi-171 helicopters from Russia is a priority and is being pushed to be finalized this year.

This supports earlier statements made by Defense USec. Cardozo Luna that the Philippines is interested in acquiring 16 to 17 Mil Mi-171 medium helicopters from Russia.

A few days ago MaxDefense mentioned that the procurement of Russian helicopters was a direct order from the president himself, as he made a pre-condition of approving the acquisition of the Sikorsky S-70i Black Hawk to fulfil the Philippine Air Force's requirement for Combat Utility Helicopters only if the DND and PAF would buy the Russian Helicopters Mil Mi-171Sh for the Medium Helicopter and/or Heavy Helicopter requirements of the PAF.

In fact, the acquisition of Medium and Heavy Helicopters for the PAF are not really part of Horizon 2, but were being front-loaded to justify the acquisition. Based on DND documents obtained by MaxDefense, the Medium Lift Helicopter and the Heavy Lift Helicopter project was among those proposed for the 2nd List of Horizon 2.

Its still a question how Duterte will go head on with CAATSA, as its now proven to be real.

The Mil Mi-171Sh medium helicopter, which was displayed in ARMY 2019 Expo in Russia. Photo credits to original source.
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24 July 2019:

Philippine Ambassador to the US Jose Manuel Romualdez confirmed in an interview that the Philippines has shown interest in potentially acquiring the Boeing CH-47 Chinook for its heavy lift helicopter requirements.

MaxDefense PH previously mentioned that the Philippine Air Force has shown interest in acquiring the Boeing CH-47 Chinook heavy lift helicopters from the US, as the US offers them not just to the PAF but also to the Philippine Army.

This is in case they find a way to front load the PAF's planned Heavy Lift Helicopter Acquisition Project which is a 2nd List of Horizon 2 project, which is separate also from the proposed Medium Lift Helicopter Acquisition Project under the Horizon 3 phase. 

The problem is that Pres. Duterte is insisting to go Russian with the Mil Mi-171Sh Hip, which is actually a Medium Lift Helicopter. It would be best if the government can find funds for BOTH projects instead of using the funds for the Heavy Lift Helicopters project to fund the Mi-171Sh.

The CH-47 Chinook. Photo taken from Wikipedia.

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01 October 2019:

A report was released by the Manila Bulletin confirming that a freebie Mi-17 helicopter that Russia promised should the DND order 16 helicopters would be configured as a VVIP Helicopter  (Presidential Helicopter). If this is the case, it is definitely going to be operated by the PAF's 250th Presidential Airlift Wing, which currently operates 8 Bell 412HP/EP VVIP helicopters.

But the report also confirmed that Manila Bulletin's sources from the AFP are "concerned about the speed with which the close to P13-billion project is being rushed". MaxDefense also received this feedback yesterday, considering the project was just frontloaded and is not really a priority based on the Philippine Air Force's own procurement plan.

Currently, the variant being marketed by Russia for VIP helicopter based on the Mi-17 platform is the Mi-171A2, which was designed for government or offshore oil and gas companies.

The Mil Mi-171A2 VIP helicopter. Photo taken from Russian Helicopters.

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24 October 2019:

Russian Ambassador to the Philippines Igor Khovaev confirmed that Russia and the Philippines are still working on reaching a contract to acquire Mil Mi-171 helicopters from Russia, and that final numbers are yet to be finalized.

So far, MaxDefense has also confirmed that no contract has been reached yet, because of issues regarding CAATSA still hindering a potential deal.

The Mil Mi-17, this example with the Indonesian Army. Photo credits to original source.

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14 March 2020:

Officials from the DND and Philippine Air Force led by Defense Asec. Jose Gaverza and PAF BGen. Rene Honasan inspected the Ulan Ude Aviation Plant in Russia. This is the same plant that produces the Mil Mi-171 Hip helicopter that the Philippine government plans to acquire from Russia.

Reports are varying on the quantity the government is after, from 12 as mentioned by Pres. Duterte, to as many as 16+1 as reported by BusinessMirror's Rene Acosta.

So far, the Philippine government has been pushing to acquire something major from Russia, with the Mil Mi-171 being the one planned to be absolutely awarded to Russia. According to one our contributors who is a high ranking defense official, this order came from Pres. Duterte's personal wishes himself, who wanted the DND to accept an equivalent order of Russian helicopters for him to allow the acquisition of 16 S-70i Black Hawk combat utility helicopters from Lockheed Martin, considering he made a promise to Russian Pres. Vladimir Putin to acquire a significant amount of helicopters from Russia.

No doubt the Russian Mi-171 is a capable helicopter, while also the cheapest in the market that would allow the measly budget of the PAF to acquire more than what it can get from Western equivalents. But CAATSA remains an stumbling block.

As for CAATSA, MaxDefense learned from trade and defense sources that both Russia and the Philippine governments have come to an understsnding on the availability of a 3rd party financial institution has been made available to transact the deal and fund transfers, without the institution being affected by American trade sanctions.

And if this is proven to be effective, apparently more Russian arms orders will be made. Let's see if this would be effective enough, considering other countries like Indonesia and even India and Thailand seem to have stumbled on CAATSA concerns.

Surprisingly, the Philippine Embassy in Russia made use of the word "Sovtechnoexport" in describing "Rosoboronexport".





All photos from the Philippine Embassy in Russia.

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06 November 2020:

MaxDefense has finally confirmed that the DND has released the Notice of Award (NOA) for the Philippine Air Force's Heavy Lift Helicopter Acquisition Project in favor of the Russian government in a deal worth Php12.797 billion, that will involve the supply of the Mil Mi-171 Hip helicopter.

The NOA was released by the DND several weeks ago, and the DBM releasing the SARO for the initial 15% of the contract cost last 04 November 2020. A contract is expected to be signed soon, although it remains to be seen how the DND would skirt the CAATSA issue, which according to a MaxDefense source, could have been done with the help of a French financial institution.

Philippine Defense Resource's Youtube channel has posted a new video regarding this development, which can be seen below.


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02 June 2021:

According to MaxDefense PH's sources, the funding for the Heavy Lift Helicopter Acquisition Project that was released by the DBM was November 2020 was placed on hold due to the DND's inability to finalize the deal with the Russian government due to CAATSA-related issues.

Apparently, no financial institution was interested in doing the transaction between the Philippine and Russian governments for fear of being imposed with CAATSA sanctions.

Because of this, a contract was not signed between the DND and Russian government for the project.

But in a surprise move by the DBM, it has again released the 15% initial funding worth Php1,919,626,490.00 under a new SARO dated 27 May 2021.

According to MaxDefense PH's sources, the project is still for the procurement of 16 Russian-made Mil Mi-171 medium lift helicopters, which Russia and the Philippines are still pushing to go ahead.

MaxDefense PH mentioned that the DND targets to sign a contract with the Russian Government in the next few months, to allow the delivery of a first batch of helicopters before Pres. Duterte's term ends in June 2022.

Funding for additional S-70i Black Hawk combat utility helicopters won't be coming from this project.

Mil Mi-171 medium helicopter.

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First edit and release: 07 November 2020
Copyright Philippine Defense Resource / MaxDefense Philippines







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