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.