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With the decision of the Ministry of Defence
(MoD) to open the financial bids early November
of the two finalists in the IAF’s Medium
Multi Role Combat Aircraft (MMRCA) fray, IAF can
now hope to acquire the first lot of 18 aircraft
by end-2014 or mid-2015, depending on when the
contract is signed.
MoD completed due formalities Oct 20, and sent
letters Oct 24 to representatives of Eurofighter
and Rafale for opening the bids on the afternoon
of Friday, November 4. The representatives would
authenticate the tender packets as their own and
as submitted by them earlier, in the presence
of senior Ministry officials, and then they would
be opened by one of the designated officers.
Each bid would have a Summary Sheet and the Best
and Final Offer, or BAFO as it is called, and
both the bids would be read out to both the Rafale
and Eurofighter representatives. MoD officers
present would represent the Ministry’s Acquistion,
Technical and Defence Finance departments.
Although the MoD's initial assessment was that
the deal could be worth around US$ 10 billion,
both the Rafale and Eurofighter should cost somewhere
around $ 15 billion.
It is perhaps safe to assume that if the difference
between the two bids is 15 per cent or more, then
the lower bidder would ultimately be the winner.
But if the difference is only marginal, or around
four to five percent, then the associated costs
on spares, tooling, maintenance and operating
costs per hour in terms of fuel, manpower, maintenance
and lifecycle would play a role in determining
the winner.
In any case, the initial costs, which include
spares and support for the first two years, as
well as the associated costs would be computed
and only then the winner would be declared.
Well placed sources told
India Strategic that it should take
a month or so to do the necessary calculations.
IAF Chief of the Air Staff, Air Chief Marshal
NAK Browne, has has also expressed this hope.
Notably, the financial bids are valid only till
December 2011, and if there is a delay by chance,
then the two companies, French Dassault for Rafale
and European consortium Cassidian for Eurofighter,
would have to renew the validity of their bids.
But that is unlikely to happen.
IAF has been in a hurry for several years to
replace its inventory of old Soviet Migs, but
it was only in 2007 that a Request for Proposals
(RFP), or tender, was issued to these two European
companies as well as the US Lockheed Martin for
F 16 Super Viper and Boeing for F 18 Super Hornet,
Swedish Saab for Gripen and Russia’s Rosoboronexport
for Mig 29M2, later designated Mig 35.
IAF conducted extensive flight and weapon trials
within India and the country of manufacture. According
to Air Chief Marshal P V Naik, who retired a couple
of months ago after overseeing the exercise, all
the aircraft were good but the two European combat
jets, Rafale and Eurofighter, scored maximum points.
The tender is for 126 aircraft, with an option
for 63 more. It mandates two years support, cost
of weapons, transfer of some critical technologies,
and 50 per cent of the value of the tender to
be invested back in India in defence related industries.
The winner has to supply 18 aircraft in fly-away
condition and the rest in kits and parts, some
of which would be progressively made in India.
It would be up to the winner to choose any public
or private sector company for collaborations but
the final integration of the aircraft and systems
would be done by HAL, India’s premier aerospace
state-run company.
Nonetheless, both Dassault and Cassidian, a subsidiary
of EADS, have tied up with Indian industrial houses
like Tatas, Mahindras, Larsen and Toubro as well
as HAL, BEML and so on. The Mukesh Ambani group’s
Reliance Industries Ltd. (RIL) is also now in
the arena although nothing has officially been
disclosed.
Senior and younger officers of the IAF are looking
forward to the arrival of the new combat jets,
particularly as the SU 30 MKI is the only aircraft
in IAF’s inventory which can be described
as modern.
All other aircraft are 25 or more years old and
are being upgraded for a life extension of another
10 to 15 years.
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