Friday, 1 October 2010

American engine to power LCA: but Eurojet remains optimistic


A US Navy F/A-18 at an base in Virginia. The F-414 engines that power this aircraft, as well as the Swedish Gripen, has been selected by India's MoD for its Tejas Light Combat Aircraft

by Ajai Shukla
Business Standard, 1st Oct 10

In a last-minute twist, General Electric of the US has bagged the hotly contested $800-million tender to supply 99 engines for India’s Tejas light combat aircraft (LCA). After both engines in the contest — GE’s F-414 and Eurojet’s EJ-200 — were found technically suitable, the F-414 has been declared the cheaper option.

The choice of the GE-414 engine boosts the chances of America’s F/A-18 fighter and the Swedish Gripen NG in the $11-billion tender for an Indian Air Force medium fighter. Conversely, it is a blow to the Eurofighter, which is powered by twin EJ-200 engines.

In the initial commercial bids, opened in mid-September, Eurojet ($666 million) had bid lower than GE ($822 million). But, after two weeks of intensive evaluation by a defence ministry price negotiating committee, GE has been ruled the cheaper option.
“After evaluation and acceptance of the technical offer provided by both Eurojet and GE Aviation, the commercial quotes were compared in detail and GE Aviation was declared as the lowest bidder. Further price negotiations and contract finalisation will follow,” the Defence R&D Organisation (DRDO) announced today.

DRDO insiders say the price negotiating committee held several meetings for clarifications with Eurojet and GE representatives since the commercial bids were opened. After factoring in these clarifications, the GE engine was found to be cheaper.

The decision to buy the GE engine had been taken last week, but was only announced today in Bangalore in the presence of representatives from both companies.

Eurojet executives complain that a revised bid, submitted by them last night, was not taken into account.

Top DRDO officials emphatically reject any suggestion that US pressure had resulted in turning around the decision in favour of GE. “We had to factor in several expenses that the companies had not included in their bids. This is not surprising, since this was an extremely complex bidding process. But, after we evaluated and added in all expenses, GE was the cheaper vendor,” said a senior DRDO official.

Company and DRDO sources say the additional expenses added on to the Eurojet bid included the cost of extra transfer of technology that the company had offered and the price of tooling to build the engine in India.

Although narrowly pipped at the post, Eurojet has not given up hope. Said Eurojet Business Development Executive Paul Herrmann: “We remain optimistic about this tender. Over the next year, I believe the Indian defence ministry will encounter problems in obtaining US sanctions for transfer of technology relating to the GE engine. And, if GE fails to meet these Indian requirements, the contract will come to us.”

In a statement, the company said: "We expect further details from Indian authorities and more information about the process leading to the announced selection."

Defence ministry indicate that negotiations with GE will continue at least until mid-2011. Thereafter, the US company would be given 121 days (plus an allowable extension of two months) to obtain permission from the US government to transfer technology to build the engine in India.

23 comments:

Aaloo Bhonda said...

"Defence ministry indicate that negotiations with GE will continue at least until mid-2011. Thereafter, the US company would be given 121 days (plus an allowable extension of two months) to obtain permission from the US government to transfer technology to build the engine in India."

Considering that the engine deal will have an impact on MMRCA deal

Will it delay the announcement of winner for MMRCA?

When can we expect the result of MMRCA to be out?

Ram said...

"Defence ministry indicate that negotiations with GE will continue at least until mid-2011. Thereafter, the US company would be given 121 days (plus an allowable extension of two months) to obtain permission from the US government to transfer technology to build the engine in India."

On the one hand we are so slow, & on the other, we seem to go with the lowest cost option when the Eurojet was according to experts a better technologically superior option. When will we learn to take decisions based on what is best for India rather than on narrow cost cocerns.

joydeep ghosh said...

Ajai sir

In your last weeks post regarding EJ200 edging past GE414, I had said its still bit early to say Eurofighter gaining edge in MMRCA deal.

Now with official selection of GE414 over EJ200 by MOD it clearly states Eurofigter has virtually lost the MMRCA deal, though final decision will be political. Recent grounding of Eurofighters by various AFs due to faulty ejection seat wont help their cause in MMRCA deal either.

However if I am not wrong GE414 is a little bit shorter but fatter than EJ200. That means it will require redesigning the fuselage of LCA Tejas though not as much as if EJ200 was selected.

But a bone of contention still remains that 'Will GE be ready to share the Single Crystal Design technology' with GTRE, ADA, DRDO.
If they dont then choosing GE414 may turn out to be wrong choice in the end.

Your views sir

Anonymous said...

How come no headline F18 moves ahead as GE selected?

Anonymous said...

Ajai, can you please do a feature on what all will go into the new LCA Mk-II now that the engine has been identified? Will the airframe be made any longer, a la gripen? Will it be strengthend to carry more payload?

Anonymous said...

they would get that rubbish f 18 or gripen mod does suck.they are getting an old engine for a futuristic fighter wow what a match

Rahul said...

“We remain optimistic about this tender. Over the next year, I believe the Indian defence ministry will encounter problems in obtaining US sanctions for transfer of technology relating to the GE engine. And, if GE fails to meet these Indian requirements, the contract will come to us.”

Thereafter, the US company would be given 121 days (plus an allowable extension of two months) to obtain permission from the US government to transfer technology to build the engine in India."

Done, Not Done, Half Done, what? And Eurojet optimism says world of truth. Shivalik incident is still not very old and nor is consultancy issue for N-LCA.

No hope to see work beginning on MK-2 until JV-KAVERI is ready for production.

Invincible Attitude said...

How shameless a person you are. Just two days back you were talking about Eurojet getting the deal and this is what has happened. This shows that how shallow a reporter by planting aggressively in favour of the Europeans.

Anonymous said...

And what about the india engine (Kaveri if I remember right) ? Is Snecma dumped ?

Anonymous said...

Folks ... the Eurojet may have been a good engine ... but lets be clear ... the GE engine is an outstanding performer and meets India's requirements perfectly. Fewer mods required for LCA integration, more thrust available. India has made its choice. Now its for the US to deliver on their end of the promises. If they dont do that with technology transfer ... as promised ... then they can go jump ... and India will, once and for all have an answer on whether or not they can be trusted. Till such time as the US defaults on its promises ... I see no problems whatsover in this deal. And if they do screw up, then the Eurojet engine is available.

Anonymous said...

Given that the committee had participation from all the stakeholder, can't it be genuine that the GE engine provided the best bang for the buck?

As far as cost is concerned, if we need we can buy real expensive stuff.. like C-17. If India wanted a US engine we would have brought it off through FMS.

As far as Eurojet is concerned, let's not believe they are white as milk(not referring their skin color!)

Eurojet engine would be lower cost in direct buy, however over all I have a feeling they were asking for a leg for the whole package(TOT,consultancy etc).

And needless to say, since most of the reporters carried the story of Eurojet being lower priced, they were fed a half truth.

Sudip Das said...

why the choice of LCA MK II engine have any effect on the selection process of MMRCA? As far as I know the 643 test points that each of the six airplanes were tested for during the field evaluation trials (FETs), if all the aircrafts are compliant, the cheapest will be selected .

Selection of LCA MK-II engine should not be linked with MMRCA tender, unless and until it is a political decision overriding the recommendation of IAF

The only worry should be that GE should not come back after 121 + 60 days and say that American govt has denied them permission to transfer technology . There will be delay in the LCA program.
In fact there should be penalty clause for denying to transfer technology at a later date .

Kartik said...

Ajai saab, please do a few stories on the Tejas Mk2..we keep hearing about it, but there is very little clarity, much less even a single picture or diagram, that illustrates what it will look like or what changes will be made. Just vague statements like larger intakes, probably a larger wing, etc. What is the progress so far on the Mk2 ? Will any of the Mk1 prototypes be converted into the Mk2 prototypes ? When will it first fly and when is the planned induction date ? If ADA can answer all these questions and raise the veil from the Tejas Mk2, it will be great.

Thanks !

Mr. Ra said...

Who knows, the optimism of Eurojet may be vindicated later.

Anonymous said...

Perfect decision. Now the LCA program will stand on its own merits. The GE engine is the more powerful and robust of the two. A bright future awaits the LCA aircraft and the ADA team. Congrats and I am happy the superior option was chosen. I wish everyone was always as clear as this about their objectives, without getting blown off-course by last minute sweeteners.

Manne said...

Who else thinks MMRCA will go to Typhoon and that way India gets both engines (and associated tech & toolings)?

- Manne

Mr. Ra said...

If AMCA has to be powered by EJ200, then EFT is the MMRCA winner.

If AMCA can be powered by GEF414, then F-18 is the MMRCA winner.

If AMCA can be powered by Kaveri, then EFT is the MMRCA winner.

If F-18 is the MMRCA winner and if the fund is short, then Gripen is the MMRCA winner.

If the MMRCA is not to develop in to further versions, rather PAKFA, AMCA and Tejas mk3 may have this opportunity. Then in that case F-18 is the MMRCA winner.

If the MMRCA is to develop in to further versions, then in that case EFT is the MMRCA winner.

If overall economics of the Engine is considered then F-18 is the MMRCA winner other wise EFT is the MMRCA winner.

Here anywhere nation is not the loser, if TOT is irresistibly provided.

P.K.Chaudhuri said...

Sir.
DRDO must assign more priority to the development of Kaveri. Our past experience with USA with respect to technology transfer has been very bad.
The marine Kaveri, which has been a success should undergo extensive field trials immediately. Government must announce in public the target schedule of development and deployment of Kaveri marine engine. If a 20 MW Kaveri marine engine can be developed, it can replace the Fr5 GTs of GE design, which has a widespread market in India and abroad.
P.K.Chaudhuri.

Henty Thomas said...

Well GE 414 produce more power than Ej200, but z heavier among the 2.. & GE engines r more resistant to dust & its related damages! But Ej200 had more tilt towards Kaveri engine resurrection!... But GE is more cost efficient….hmmm So in general it’s a good decision…. While MRCA I guess will be more politically influenced!!.. Well if MRCA was really to bridge gap between Mig-21 & LCA then Gripen would hve been d best choice… but if its to b defined as best value for money deal then there z a tough competition between F-18 & Eurofighter!!

Anonymous said...

I found the purported comment of additional cost of transfer for extra technology offered was factor quite strange.

Anonymous said...

hi ajai sir
don't you think it is not a wise decision on part of MoD because in past we have experienced that awarding contract to American companies have not yeilded into any results looking at how Lockheed was selected as a consultant for N-LCA and it was not able to obtain clearance from the US DoD so does this means that GE has prior clearance from DoD and it may be possible that the US DoD has agreed ToT of critical tech such as SCB which EJ had offered or is it a direct indication of F 18 winning the contract and India getting all the key technologies on offer.But we have resisted from CISMOA for C 130J-30,so are we ready to sign CISMOA for such a vital component of our air force which handicap can us in a war if it is against US interests.
would like to know your views on this

Anonymous said...

Why can MOD do "reverse bidding". In "reverse bidding", in the first stage all the bidders must get technically approved or be ousted. Bidders must also agree to all the terms set by MOD or get these resolved or be ousted.

The second or final stage, all remaining technically qualified bidders, then compete in the commercial by reverse bidding until only one bidder is left. The last one standing is the winner.

By this method, MOD will be able to get the best price.

subhojit said...

Let us hope that ADA can quickly integrate GE414 into the Tejas airframe. It is logical to think that the GE414 will be faster to integrate as compared to any other - as ADA has already integrated a GE404 engine and so they must be over the learning curve in terms of some set of interfaces.

We need a taskforce to study and absorb the technologies to right-engineer kaveri.