Monday, 20 September 2010

Eurofighter edges ahead in MMRCA race: Eurojet pips GE in LCA engine bid


The Eurofighter's twin-EJ200 engines, seen here on full afterburner. Eurojet, which makes the EJ200, has bid lower than GE to provide India with 99 engines for the Tejas fighter

by Ajai Shukla
Business Standard, 20th Sept 10

Europe is poised to beat America in the tightly fought contest to sell India a next-generation engine for the homegrown Tejas Light Combat Aircraft (LCA). Business Standard has learned from informed sources that, when the bids were opened last week, European consortium Eurojet, which bid US $666 million for ninety-nine EJ200 engines, has undercut US rival General Electric, which quoted US $822 million.

Both the engines had been earlier adjudged technically suitable for powering the Tejas Mark II. Therefore, according to the Ministry of Defence’s procurement rules, the vendor offering the lower price is to be handed the contract.

But the champagne corks are not yet popping at Eurojet. Both engine-makers have been asked for certain clarifications by Wednesday, and senior Eurojet executives are worried that this interregnum might be used by Washington to put pressure on New Delhi to opt for the American engine.

At stake here is far more than a few hundred million dollars. Industry experts say that India’s choice of engine for the Tejas will significantly shape the choice of a medium multi-role combat aircraft (MMRCA), a US $11 billion contract for which the Indian Air Force is evaluating six fighters. Of these, the Eurofighter has twin EJ-200 engines, while GE F-414 engines power the US-built F/A-18, and Sweden’s Gripen NG fighters.

Says Air Vice Marshall (Retd) Kapil Kak, of the Centre for Air Power Studies, the IAF’s official think tank, “It is as clear as daylight. Selecting the EJ200 for the Tejas would boost the Eurofighter’s prospects in the MMRCA contest. Its engines, which form about 15-20% of the cost of a modern fighter, would be already manufactured in India for the Tejas LCA. And, for the same reason, rejecting the GE F-414 would diminish the chances of the two fighters that fly with that engine.

In its tender for the Tejas engine, the MoD has specified that only ten engines could be built abroad. All subsequent engines must be built in India, with the vendor transferring technology for their manufacture. If the EJ200 were being built in India for the Tejas, Eurofighter would benefit from a fully amortised engine line and also be entitled to offset credits for the “made-in-India” Eurofighter EJ200 engines. This would lower the price of the Eurofighter, a huge advantage for an aircraft that is regarded as high performance but expensive. Logistically too, the IAF would prefer an MMRCA with engines that were already on its inventory.

Selection of the GE F-414 engine, on the other hand, would provide all these advantages to the vendors of the F/A-18 and the Gripen NG fighters. This is a key reason why Eurojet and GE have conducted their LCA engine campaign so competitively.

Furthermore, the order for 99 engines for the Tejas Mark II is just a foot in the door to the Indian market. Given that each fighter goes through 2-3 engines during its operational lifetime, the 4-5 planned squadrons of Tejas Mark II (84-105 fighters) will actually need 200-300 of the new engines. The 126 MMRCAs could consume several hundred more.

Business Standard has earlier reported (“EADS plans to ride the LCA into Indian market”, dated 12th Feb 09) the European aerospace industry’s plan to enhance its presence in India’s military aerospace programmes in order to benefit Eurofighter GmbH, in the MMRCA contest. The first move by EADS was to provide consultancy for accelerating the flight-testing of the Tejas; now comes the second move, by the Eurojet consortium, to bid aggressively and win the Tejas engine contract.

MoD sources have expressed surprise that Eurojet could bid 20% cheaper than its rival, General Electric, which is widely regarded as a cost-effective manufacturer. In fact, conversations with EADS executives reveal that this is a well-considered business strategy.

Sources in the Aeronautical Development Agency (ADA) confirm that both the GE and Eurojet engines have fully met the technical requirements to power the Tejas Mark 2. The Eurojet EJ200 --- which the IAF favours --- is the more modern, lighter, flexible engine with greater potential for growth. The GE F-414 is heavier, but provides a little more power.

Eurojet Turbo GmbH (or Eurojet) is a consortium between Avio (Italy); ITP (Spain); MTU Aero Engines (Germany); and Rolls-Royce (UK), which was set up to develop the EJ200 engine for the Eurofighter. It is headquartered in Hallbergmoos, Germany, just outside Munich. The EJ200 and Eurofighter programmes generate approximately 100,000 jobs across Europe, directly and indirectly.

29 comments:

Gaurav said...

I think the plane that is likely to win is the Eurofighter.

Sardar Ram Singh porkychinki farker said...

fantastic news. wow wow wow wow wow the Mark II will be a good fighter to down all the fighters from china and porkyistan

Heberian said...

The EJ200 is better for us to learn the finer aspects of jet engine manufacturing. This is simply because the EJ consortium will transfer critical technologies rather than just permit licence manufacture. The GE 414's higher power is offset by its weight factor.

It will be interesting to see how the dice rolls..

NJS said...

What is need of clarifications now with 2 vendors , these should be made before selections , If US GE wins their will be no clarifications
, but if others win , selectors will show , they have serious doubts and clarifications . india is trying to put every eggs in US rotten basket. Eurojet already said it is willing to transfer more then 60 % tech in engine as per request in tender , but US is highly doubtful in Tech transfer.

Spirit of Exuberance said...

Both engines are very good with regards to performance. But the GE side could not be trusted as we still see lots of sanctions on our laboratories and denial for consultancy for Naval LCA. The prospects of Typhoon shall not be affected with the latest grounding by German Airforce for Ejection Seat problems/checks. MMRCA shall only be awarded to Dassault or EADS if we really want edge in technology and indigeneous development.

joydeep ghosh said...

@ajai sir

all said and done, it still doesnot give Eurofighter an edge over others in MMRCA deal.

The recent grounding of Eurofighter by German and British AF due to issues related to ejection seat functioning (that killed a Saudi pilot in Spain) has to be taken into account.

Deal winner or not pilot safety is paramount isnt it

Maximus said...

What is rather interesting is how the Eurofighter lobby keeps coming back with newer and newer spins on why they should be the winners. Earlier there was the one vs two engine. Then came the NDTV "scoop". In between there was the political angle. Frankly, the list of gullible senior journalists is getting a little too tedious. From a purely technical point of view, the LCA will need significant design changes to accommodate the EJ. Chew on that.

Anonymous said...

I always wanted the Euro fighter
great and wonderful news .I love INDIA.
Now I love europe also bcos LCA MK 2 will be great plane with a power ful engine E J 200 and AESA radar .

And above all with 200 eurofighters porkis and chinkis will be FINISHED
EVEN IF THEY ATTACK TOGETHER

StarBlue said...

yep mkii will be great. It will just come 10 years too late :-((
What do you think will come first PakFa or LCA mkII? LCA looks so yesterday. With plenty of money available and plenty of great fighters around...mki, mrca winner, pakfa....who would really want to fly the LCA. and why have it? it brings nothing to iaf or india? take off the indigenous glasses and really look how much of the plane is local....

Anonymous said...

In the end Americans might clinch the deal.

Shailendra said...

I have two points to make. Keeping in mind that we need to get most from these deals

1. Why not split order between Rafale and EF ?
2. Please do not transfer any tech to any MOD owned house. Better transfer to some private firm like Tata, Mahindra or Relaince. HAL sucks and nothing will be achieved. HAL is like a poor fielder in a cricket team

Mr. Ra said...

At least something good can be expected to come out now.

Ravi said...

I think a couple of clarification is an attempt to get even a better bargain and why not. I think India should go for Eurojet and Eurofighter as it can use this huge order to align European policy makers opinion in line with its own geo-political-economic interests, besides, its a good engine and fighter plane.

Gogol said...

Actually, the opposite works. The Ruskies are covered with Sukhois and Next Gen collaboration. The Europeans with EJ. It probably now makes sense for India to strategically balance out by getting a front rank fighter with an American Engine. Seems too fool hardy to put all the eggs into the European basket. After all,the under powered Jaguar is an object lesson on European engines.

Anonymous said...

I hope the two teams have already been told about the other's bid. It won't be pleasant reading about the other's bid in the news media, especially for the one who bid the lowest.

Anonymous said...

Russia gets the PAKFA. They get happy.

France gets Mirage upgrade. They get happy.

US gets happy with P3, C17 and C130

That leaves Sweden and Eurofighter.

Sweden = zero political value but outstanding, cheaper fighter.

Euro consortium = higher pol benefits but way higher price of the jet.

Bottomline: Gripen with GE engine still likely to be cheaper than Eurofighter with Eurojet engine.

So ... L1 bidder Gripen (assuming MiG-35 is out) still has a chance.

Also, why would America mind an order of 200 odd GE engines?

Anonymous said...

No doubt that the EJ 200 is the more modern engine out of the two. On grounds of Technology Transfer-it is the safer bet. Getting hit by Sanctions-very low probability of that happening. Also very happy to note that the Tejas Mk2 would be combat-worthy with the new engines, unlike a dud it would have been with the current engines.

But don't get too excited on the pricing front. Surprised that Mr Shooklaw has not pointed that out in his post. This is "introductory" pricing (almost like what India's leading private bank, the one with all the I's and the C's does to get customers)Once India bites the bullet, i.e. the jet, tools to service the engine (just an example-anything that is not covered in the contract will have the same fate) will cost equivalent to the engine. But hey, at-least you can pay your way out,right (just like we are doing for the Scorpene and the Gorshkov-God bless IT & Real Estate sectors). If the GE version is selected and we get slapped with sanctions, half our future air-force ( reasonably "safe" to assume that if EJ-200 is selected for the Tejas, EF would be the MMRCA and if GE 414 is the Tejas engine, F-18 is the MMRCA) would be in trouble.

But then-this is the price to pay for incompetency. If the Kaveri was powering Tejas Mk2-it would have been a different story. So countrymen, rejoice. So what if your government/HAL/GTRE/NAL etc are incompetent, un-productive & corrupt; your taxes will be good enough to compensate for their in-competency.

Btw, Mr Shooklaw-Any updates on the Kaveri testing in Russia? Would be curious to know how it is faring?

TT

Ravi said...

If the EJ200 is selected for LCA, that is very good news, as the LCAs won't be sanction prone. Doesn't rule out the fact that the MRCA will go to the americans. As many have pointed out, the MRCA will be a political decision, and given the closeness of MMS to US, it is in all probability going to be F/A-18 ( as F16 is way past its life).

I don't understand how the engines for MRCA and LCA are linked? The DRDO/MoD rules clearly specify that the lowest bidder will get the engines contract for LCA. However, the MRCA contract doesn't explicitly say anthing. The honorable PM has mentioned that the strategic and political goals too would be part of large defence purchases. There has been part political decisions of going with SU-30MKI/Mig-29/Jaguar etc which the IAF had not whole-heartedly approved.

So there is really nothing to fear/celebrate about the MRCA winner being the same as LCA engine winner.

PS: Don't forget that the LCA FMS software was withheld by US and our scientist kicked out after the 1998 nuclear tests. Or that recently, Boeing offered to help with the accelarating the testing of LCA, but the US Govt withheld permission. I would be were vary of selecting GE engines for LCA as US seems to be actively sabotaging it.

Anonymous said...

What would be the quality of the tech transfer from EJ? It is unlikely that they will part with their cutting edge engine tech to GTRE and therefore compromise their own competitiveness. If they provide some old engine tech, keep in mind GTRE may still not have that, would it be wise to go for the EJ-200. The GE engines on the other hand are probably more cutting edge and provide more thrust and reliability. Would you want to compromise on the performance of the LCA based on some promises from EJ. What if the promises fall flat? Then the LCA will not realize its true potential, because of underpowered engines, but the GTRE will also lose out. Right now, objectively speaking, the GE engines are better and for the LCA program to make the giant leap forward it needs the most powerful and reliable engine out there.

Heberian said...

Anonymous/TT @ 20:08

Nice write-up, and good point about the introductory pricing. So isnt the pricing for the GE 414's also introductory?

You say "countrymen" and then use "..pay your way.."/ "..your government.." etc. Interesting phrasing.

Yes, incompetency unfortunately has been the hallmark of our indigenous defence efforts, simply because its not privatized... hopefully that will change for the better.

So what engine do you think would do justice in this scenario of engines/fighters...?

Anonymous said...

well...after all some good news EJ200 and typhoon...!!!! ..\
LEKIN MMS ji novmber me a rahe uncle ke KIRAYE BHADE ka kharcha kis tarah chukayenge ...samjh nahi aa raha ha..

Anonymous said...

@Anonymous 6.52

Don't get me wrong. Either way we go-GE or EJ, we get the business end of the stick.

Let me take a step back-Why are we buying the MMRCA?

Because we failed to develop Tejas to replace the Mig-21. Why?

Because of the inefficiencies of HAL/NAL/GTRE/ & the GOI.

Are they being punished for their in-efficiences? Are you kidding me-they get hikes, increased DA and other goodies.

So what is the motivation for them to work when they know their in-efficiency is being rewarded? Zilch. You will have even fatter rats tomorrow. Who benefits?

Politicians (kick-backs) & the foreign manufacturer. Who pays?

The people of India. Petrol will become costlier, taxes will become higher. We do not have money to build roads, toilets or schools for 40% of our population but we will gladly fork out an extra billion dollars when the French hold us to ransom on the M2K upgrade (Btw: 51 M2K's cost $1,900 Million to "upgrade"-$38 Million/plane for a new radar, avionics, EW suite & digital cockpit. Airframe and engine un-touched. FYI-A new M2K costs $45 Million when last sold to the Hellenic Air Force)

Before i become branded as a Pakistani- There is no way out here. IAF needs fighters desperately to defend this country from enemies on both sides. What we have to figure out is the best deal we can get-which is pretty simple if you are honest, but complicated when kick-backs come into the picture.

So if you ask me which is the better deal for the engines/MMRCA-Both the Europeans/Americans will loot us till we are sick, they will both pay kick-backs to the "correct" people; but unlike the Americans, they will not impose sanctions on us because we don't help them in their war effort on Timbuktoostan.

And in-case you are thinking that HAL will be able to support the MMRCA if we get hit by sanctions in the future(why not, they will be manufacturing the MMRCA within X years, right?) wake-up. HAL still imports parts for the Cheetah helicopter (something it serial manufactured for a long time).

TT

ABHISHEK said...

EJ'S ARE MORE ADVANCED GETS AN AUTOMATIC RE IGNITION SYSTEM AND MOST IMPORTANTLY DOSEN'T REQUIRE ANY AIRFRAME MODIFICATION AND TVC TOO. SEEMS TO BE A PERFECT OPTION TO ACQUIRE

ABHISHEK said...

I WANT TO SEE EUROFIGHTER IN INDIAN COLORS.....

Anonymous said...

GE have the best engine.
It fits, best fuel eco, best IR, cheapest to fly, and best thust
and more or less interchangeable with f404. more to grow on with F414EDE/EPE

Weight?
ok, eurojet win that.
thats it. This article is biased.
i love eurostuff, but right needs to right.

DEVASIS said...

Procrastination is the thief of time.
The MMRCA saga shoild come to a quick end.
Let us choose the best aircraft and I am sure the IAF will do a good job.
No point in early speculation.

Maximus said...

Can I say, I told you so? GE wins. Why does EJ have this special fondness for feeding people tripe? Sorry, Ajai, you seem to have been misled.

PRANAV UNDALKAR said...

MY CHOICE IS RAFALE.WE KNOW THAT DASSAULT BUILD FINE FIGHTERS.WE CAN SEE PROOF-MIRAGE 2OOO.

Anonymous said...

this is very good for you, ybg :)