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Representatives of the French Rafale International
and European consortium Cassidian Eurofighter
Typhoon were called to the Air Headquarters in
the afternoon and both the bids were opened in
their presence. The winner can however be declared
only after an assessment of associated details
like costs of operations per hour as well as during
a lifecycle of 6000 hours of flying or 40 years,
service and spares, maintenance and the required
infrastructure to progressively manufacture the
aircraft in India under the agreed Transfer of
Technology (ToT) and offset terms.
Ministry of Defence (MoD) spokesman Sitanshu
Kar said that it could take between 6 to 8 weeks
or so determine and declare the winner, and then
perhaps a few months to sign the delivery and
production contract.
As per the tender, floated in August 2007, the
vendor (winner) will supply 18 aircraft in flyaway
condition within 36 months along with sensors
and weapons, train IAF pilots and engineers, provide
agreed levels of ToT, assist in setting up the
infrastructure in India, and be responsible for
periodic upgrades till the total technical life
of the aircraft, estimated at 6000 hours of flying
or 40 years, whichever is earlier. The initial
support package is for two years.
There would be additional costs for the lifecycle
operations, and these would be fine-tuned in negotiations
after the winner is declared.
Understandably there was no comment from either
of the two vendors, Dassault’s Rafale International
or Cassidian’s Eurofighter, both of which
have high stakes in the mega-Indian project. The
tender also has an option clause for 63 more aircraft,
and according to MoD sources, once the project
is in Indian hands, the MRCA requirement could
go up to 350.
The cost of the 126 aircraft was initially assessed
at around (INR 42,000 crores) $ 10 billion.
However reliable sources told India
Strategic that the Ministry revised
this benchmark price a few weeks before the tender
was opened. Details were not available but the
new figure should be between $ 13 to 15 billion.
Notably, nearly half of the IAF’s combat
aircraft are old, Soviet-vintage Mig series of
aircraft, which should have been replaced years
ago. In 1990, the then V P Singh government imposed
an embargo on the modernisation of armed forces
due to the allegations of payoff in the purchase
of Bofors guns from Sweden in 1984, and it was
only after the 1999 Kargil War to evict Pakistanis
from Indian positions that the MoD was triggered
into restarting the process.
Except for the Su 30 MKI aircraft, which India
bought from Russia in the late 1990s, all the
aircraft with IAF are old, although the 25-year
old Mirage 2000s and Soviet Mig 29s are being
upgraded to serve for another 10 to 15 years.
So are the older Anglo-French Jaguars.
Notably, IAF has ordered 272 Su 30 MKIs from
Russia as well as its Indian production and assembly
line at an HAL facility. Some 140 of these are
already operational, and IAF may order some more
of these aircraft on follow-on basis.
Under the Indian system, the government has to
float a tender for new aircraft or other major
systems for the Indian Armed Forces, but follow-on
orders can be given to any vendor through procedural
clearance within the MoD. That is how, IAF is
happy to acquire more and more of SU 30 MKIs;
the aircraft are nonetheless formidable, equipped
as they are with French and Israeli avionics.
The same system would be applicable if IAF decides
to acquire more than 126-plus-63 MMRCAs as by
that time these would be made in India.
The winner would be free to choose state-run
or private Indian companies for collaboration
but the overall integration would be in the hands
of the public sector HAL, which has already planned
to build the components assigned to it and do
the integration at a new facility in Bangalore.
Land for that project has been identified, official
sources told India
Strategic.
It may be recalled that the tender, or Request
for Proposals (RfP), had been issued for Eurofighter,
Rafale, US Lockheed Martin’s F 16 and Boeing’s
F/A 18 Super Hornet, Sweden’s SAAB Gripen
and Russia’s Mig 29M2, later designated Mig
35.
The two European manufacturers topped the flight
and weapon trials and short-listed.
Interestingly, France-based EADS has a 46 per
cent stake in both the Rafale and Eurofighter
so it is a winner to that extent either way. But
it has a significant manufacturing stake in the
Eurofighter and very little in Rafale.
Eurofighter is made by four countries, Germany,
Spain, Italy and Britain, and the aircraft has
been sold to Austria and Saudi Arabia. Rafale
is yet to find a foreign customer although the
company is in serious negotiations with the UAE
Air Force.
Both the aircraft though did well in the recent
Libyan crisis to oust Col Gaddafi. However, while
that could interest the warfighters, the acquisition
managers of the MoD would go by the financial
implications of the bids to the Indian Government.
"Technical capability trials by the Indian
Air Force are already over and that is why the
two contenders are the finalists in the fray...
It is the monetary demand by each of them that
matters, and the winner would be the one with
a lower quote, described in the offical Indian
lingo as L-1," observed Mr Vinod Misra, noted
defence finance expert and former Secretary Defence
Finance in the MoD, and now a Member of India
Strategic’s Editorial Board.
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