Wednesday, February 1, 2012

India-France Defense Pact: New Delhi's Biggest Decade Deal

Dassault Aviation, a French company, has bagged the mega $10.4-billion (Rs 54,000 crore) contract to supply 126 medium multi-role combat aircraft (MMRCA) that will give the Indian Air Force (IAF) — which is eagerly looking to replace its ageing fleets of MiGs and other fighter jets — a much-needed shot in the arm.
The original estimated cost of the deal was around Rs. 42,000 crores ($10.4 billion) in 2007, but there are indications this could escalate to between Rs. 80,000 crores to Rs. 90,000 crores (about $16-18 billion). But no official figures are available as cost negotiations are yet to begin. India will now compare its “benchmark price” at current costs to the cost at which the French are prepared to sell, and will try to scale down the French bid. Only if these talks with Dassault fail will negotiations start with “L2” (second-lowest bidder) — EADS Eurofighter.
Bidding Battle
A fierce bidding battle was witnessed between Dassault’s Rafale and European consortium Eurofighter’s Typhoon to clinch what has been billed as the mother of all defense deals. Finally, it was the twin-engine, delta wing Rafale, which emerged as the lowest bidder today.
The French firm Dassault Rafale has emerged as the lowest bidder and cheaper than its European rival EADS (maker of Eurofighter) in the tender and will be offered to supply the aircraft to the IAF.
The representatives of Dassault here were informed about the development in the morning and further negotiations on price will be held with them in the next 10-15 days.
The Rafale is used by the French Air Force and Navy and was deployed during the recent France-led NATO strikes on Libya. The final order could eventually go up to 200 aircraft as there is a provision for increasing the number of jets by 50 percent without any price hike. According to the Request for Proposal (RFP), the winner of the contract will have to supply 18 of the 126 aircraft to the Indian Air Force in 36 months in a fly-away condition from its facilities and the remaining would be produced at HAL facilities in Bangalore. The contract is likely to signed at the end of this fiscal in March or early next fiscal.
About Rafale
The Rafale, currently the main French Air Force combat aircraft, is known as an “omnirole” fighter capable of multi-role functions like air-to-ground precision strikes, nuclear strikes, anti-ship attacks, reconnaissance, close air support and air defense. The aircraft is equipped with smart sensors and rocket-boosted air-to-ground precision guided weapons with laser guidance systems, long-range missiles, anti-ship missiles and air-to-air missiles. Dassault says the Rafale was used with great success in French combat ops in Afghanistan and Libya.
Rafale is a twin engine jet and can perform various roles like offensive and defensive manoeovres besides air to air and air to ground missions. MIG-21(250 planes) and MIG-29(70 planes) are operationallydefensive and a multi-role aircraft like Rafale will reduce the number of types of aircraft flown at present by the IAF. There are more than 27 different types in the IAF inventory thereby increasing the complexity in maintenance and having separate production lines for different aircraft.
Of the 126 aircraft that will be acquired, 18 will come in “flyaway” condition in three years, while the remaining 108 will be built by state-owned Hindustan Aeronautics Ltd in the next seven years with technology transfers. The contract is expected to be signed in the next five months.
Dassualt Aviation’s Mirage-2000 fighter is already being used by the IAF for the past two decades. The product was picked up on the basis of it being the Lowest Bidder (L1), a decision arrived at after complex calculations, including the life-cycle costs. The two aircraft were chosen from a list of six, including U.S. Boeing (F/A18) and Lockheed Martin (F-16), Russian MiG-35 and Swedish Saab (Gripen), in April 2011.
Six companies, including American F-16 and F-18, Russian MiG 35, Swedish Saab Gripen alongwith Eurofighter and Dassault Rafale were in the race in the beginning. But in April 2011, the Defense Ministry shortlisted Dassault and EADS, evicting the American, Russian and Swedish bids. The process was started with the issuing of a global tender in 2007 after which all the six contenders were subjected to extensive field evaluation trials by the Indian Air Force at several locations across the globe.
Strategic Development
The IAF would reach its sanctioned strength of 42 squadrons by 2022 — it now has 34 squadrons — and commercial bids for the 126 medium multi-role combat aircraft should be opened by month-end.
To shore up its offensive and defensive capabilities and operate all types of aircraft along the border with Pakistan and China in the north and north-eastern regions, the IAF planned to expand the Nyoma advanced landing ground in Leh district of Jammu and Kashmir. The proposal was awaiting Cabinet approval.
The IAF hoped to plug the gaps in surveillance in the mountainous region by 2016-17, installing Low Level Lightweight Radars. It planned to expand the Kargil runway, so that it could operate heavy and tactical lift transport aircraft such as C130J Super Hercules and C-17 Globemaster.
The IAF would procure six more C130J Super Hercules, which would be based in the Charbatia airbase in Orissa, catering for the eastern region so far as the Andaman and Nicobar Islands.

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