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October 20, 2011

India to open the 126-plus combat jet tenders in October

             Winner could be declared in November 2011

New Delhi. India will open the tenders for the world’s single biggest combat deal yet for 126 to 189 combat jets in October.  
Chief of the Air Staff of the Indian Air Force (IAF) Air Chief Marshal N A K Browne formally made this announcement at the 79th IAF Day celebrations Oct 8 morning. A day before, Oct 7, the Defence Acquisition Council (DAC) headed by the Defence Minister, had cleared the decks after it was decided that all the procedural steps had been completed as due.
In his address at the annual ceremonial parade, the Air Chief announced that the tender would be opened within 10 days, and later told newsmen that the winner could be announced as early as November within a month of the tender opening. “In the middle of November, we shall be able to announce which plane we have selected,” he said.
India had floated the tender for 126 Medium Multi Role Combat Aircraft (MMRCA), with an option for 63 more, in August 2007. The cost then was estimated at US$ 10 billions approx (Rs 42,000 crores) for 126 aircraft inclusive of training, spares, weapons and a support package for two years.
The competition is between the EADS Cassidian-led Eurofighter and French Dassaults’ Rafale aircraft.
The tender opening will indicate the lower bid for the aircraft, but it would take a month – or even two – to determine the winner as there are associated bids for options, lifetime support of up to 40 years or 6000 hours of flight, Transfer of Technology, periodic upgrades and offsets etc.
Notably, over that period, the acquisition could be worth around US$ 80 to 100 billion for the winner even if many of the systems are made in India as per the conditions laid out in the tender, or Request for Proposals.
Air Chief Marshal Browne told India Strategic in an interview that the agreement with the winner could be signed within a couple of months after the winner is declared.
It may be recalled that in a recent bid for nearly 100 engines for India’s Light Combat Aircraft (LCA), European Eurojet had a lower bid compared to that of the US GE but the latter won as it was cheaper in the overall costing which included tooling and support.
Four other contestants in the MMRCA fray, US Lockheed martin’s F-16 Super Viper and Boeing’s F/A-18 Super Hornet, Russian Mig 35, and Swedish SAAB Gripen did not qualify in the comprehensive flight and weapon tests although the IAF described all of them as good aircraft. “It was a question of scoring maximum points,” said one senior IAF officer.
Interestingly, the France-based EADS (European Aeronautic Defence & Space) has 46 per cent stake each in both the Eurofighter and Dassault. However, while EADS has a substantial manufacturing stake in the Eurofighter, it has hardly any component contribution in the Dassault Rafale.
Eurofighter Typhoon is made by EADS’s subsidiary Cassidian, and the aircraft components and systems are built by Germany, UK, Spain and Italy, the four partners in the Eurofighter project.

Both the companies have promised to do full Transfer of Technology (ToT) to India, and source aircraft and other components later from Indian companies as part of the offsets.
The winner will supply 18 aircraft in flyaway condition within three years of the signing of the contract and the rest would be progressively made in India. The winner is free to choose private or public sector companies for manufacturing various aircraft components and systems but the overall integration will be by the state-run HAL.
Among the key requirements are the Active Electronically Scanned Array (AESA) combat radar, situational awareness sensors, anti-radiation missiles, some sophisticated Electronic Warfare (EW) systems and 50 per cent offset. That means the winner will have to invest equivalent to half the tendered cost back in related defence industry in India.
Both Dassault and Eurofighter have already tied MOUs with leading industrial houses to help create the infrastructure required for MMRCA production in India under the offset obligations.
Notably, IAF has a squadron strength of 34 at present against the sanctioned number of 45. But except for the 140 to 150 Su 30 MKIs – now being built in the country under licence from Russia – most of the others are vintage Soviet Mig series. Three upgraded Mig 21s have in fact crashed between Aug 1 and Oct 8.
IAF has already tied with Russia for a total of 272 SU 30 MKI aircraft in batches over the last 15 years.
IAF’s Mig 29s, and the French Mirage 2000, particularly the latter, have a good record however and both these aircraft are now being upgraded.
The Su 30 MKIs and MMRCAs are to replace a number of squadrons currently equipped with the Soviet origin aircraft, mostly the outdated Mig 21s.
The Mig 21 has been upgraded to Mig 21 bison standard and given new cockpit gadgets. But admittedly, they are too old without much heart and soul.
IAF is keenly awaiting the arrival of MMRCA, whichever of the two is selected. The first batch should arrive in 2015 if the agreement with the winner is signed within the current fiscal ending March 2012.
Air Chief Marshal Browne told India Strategic in an interview that he had met with Finance Minister Pranab Mukherjee recently and was assured that the Government understood the urgency of inducting new aircraft and other assets towards IAF modernization and adequate funds would be made available.
The Ministry of Defence has already approved comprehensive modernization of the Indian Air Force.

 - India Strategic

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