Wednesday, 8 February 2012

Eurofighter to put in revised price bid: MoD declines comment


UK Minister for International Security Strategy, Gerald Howarth, with his Indian counterpart, Minister of State for Defence, MM Pallam Raju, at their meeting in New Delhi on Monday


by Ajai Shukla
Business Standard, 9th Feb 2012

Gerald Howarth, the UK’s Minister for International Security Strategy, who comes to India days after French company, Dassault, emerged the lowest bidder in the $15-20 billion Indian medium fighter competition, tells Business Standard that “disappointed” Eurofighter will put in a fresh bid that will be a “winning financial proposal.”

Q. The British media has slammed India’s choice of the French Rafale over the Eurofighter Typhoon. Does London feel hard done by?

We would be less than human if we were not disappointed. We believe the Typhoon is the best aircraft, which has already in service with six countries. No overseas customer has bought the Rafale so far.

I understand that Rafale was L-1 (the lowest bidder) only on price (sic). If the decision turned only on price, Cassidian (the military arm of EADS) will put in a revised price offer. The four nations (UK, Germany, Italy and Spain) can produce a winning financial proposal and I fully expect that Cassidian will be doing that.

Q. Would this happen soon?

The details of the fresh price proposal are being developed as we speak, and a final decision will soon be taken.

Q. Have you asked New Delhi for permission to bid afresh?

As our Prime Minister said in the House of Commons last week, we shall continue to present the case for the Typhoon. We believe that getting the best value for money would be in the best interests of the Government of India. But it is not for us to suggest what New Delhi should do. (Note: Asked whether a fresh Cassidian bid would be accepted, the Ministry of Defence declined to comment)

Q. The French president says that British defence manufacturing is dead?

It is interesting that he should say that when we have exported the Typhoon to two countries already, Saudi Arabia and Austria. Now Oman has issued a RfP (enquiry) and we believe they will soon purchase the Typhoon. But France has been unable to persuade anybody to buy their aircraft, which we believe was rejected here two years ago.

The UK is the second largest defence exporter, has a vibrant aerospace industry, and a world-class automotive industry. So the (French) president’s remarks were inaccurate. We know he is pretty desperate given his elections this spring. We think his statement is an example of Gallic hyperbole.

Q. Will Britain’s defence industry be hit hard by India’s Rafale decision?

Had India selected the Typhoon as L-1, it would have had a favourable impact on the defence industry in the UK, Germany, Italy and Spain. But we are already working on substantial overseas orders. Typhoon is a continuing programme, whereas the French have slowed down production since their only customer was the French Air Force.

Q. But buyers all across Europe are cutting down on defence purchases… including the Typhoon.

The Eurofighter partners are all contractually bound (to buy the Typhoon), but we are all reviewing our positions in the light of the economic circumstances and the crisis in the Eurozone.

Q. So are jobs in the UK at stake here?

Not immediately, no! We have a pretty full order book currently. But we always welcome new business. It is also fair to say that the four nations also see this as an opportunity for a strategic partnership with India. And… (by buying the Typhoon) at a stroke, you would have access to the supply chain of four countries, not one.

Q. Other than the Hawk, the UK has not had many recent successes in India.

That is precisely what our trade mission is about. In fact, our relationship goes well beyond the Hawk. The Agusta Westland AW101 helicopter is being built in the UK (for the IAF’s VIP squadron). Substantial parts of the M777 ultra-light howitzer, including the titanium, high-technology components, are made in Barrow, in the UK. A smaller company, Sonardyne, supplies India with sonar surveillance equipment. And Cobham has been in India for long, supplying aircraft weapons carriage equipment and communications equipment.

Q. What is the purpose of your visit with this large British delegation?

We have three objectives. Firstly, to show India’s corporate sector the range and depth of experience in British defence and security industry; secondly, to identify the evolving Indian market; and, thirdly, to form enduring partnership with Indian companies.

18 comments:

Anonymous said...

And half of India defecated in public..... What a shame.
French must be laughing at third rate Indians

Obiwan said...

Did the Brits hear about DPP ? L1 is L1, that's the rule. Why not offering a more attractive bid from the beginning ? Does that mean they wanted India to pay much more than the actual cost ? Nonsense.

Subho said...

Col., you have been such a vocal critic of the IAF's MMRCA acquisition program , yet you failed to grill the gentleman and ask him the difficult questions while you had his attention ! If I were you I would ask the following :

(i) If the Brits are so hell bent on making the point that the EFT is the best combat aircraft in the world for the money, why are they reducing their contracted numbers while keeping their JSF numbers unaltered in the face of rising costs for that platform ?

(ii) Does he not get the point that the window of submitting their final price proposals has passed. By offering to lower the price now, it doesn't help them any more except it just gives more leverage for price negotiations to the Indians with the French.

(iii) Why has the British executive branch been so hysterical in their over reaction over the loss? Can they not put two and two together and realize that this is payback for what the card they played against India at the behest of the United States after the nuclear tests India performed in 1998 ? The French and the Russians stood by us then - not a single red faced Britt ! So why this sense of entitlement? The Indians are not their slaves any more !
Do they also not realize that such vituperative and vitriolic commentary in the British parliament and the British media is not helping matters but making it worse.

Anonymous said...

DPP does allow submission of a revised price bids after the quote has been opened. If that would be the case then the RFP would have to be re-issued to all the vendors again. This would derail the induction of the aircraft. In all fairness don't think the Indian Govt would allow this.

Anonymous said...

@Anon 07.13,

If need be the French would wipe it to win this contract and UK too would be in line!
Such comments are typical.
As if India is the only way that spends on defense.
At least we have compulsions given our neighborhood.
What compulsions does the UK have,especially after the end of the cold war.
Rather than spend their money on galavanting around the world in Afghanistan, Iraq holding on to the coat tails of USA, the UK could spend the same billions on its NHS or lowering university fees for its students or or paying their teachers decently.



UK is acting in its typical character of perfidy.

Lets hope our ministry does not not fall into the trap being laid by teh EF lobby.

Anonymous said...

The MMRCA competition is not over Typhoon can still win if their revised bid which would be lower than that of the Rafale is accepted.

Anonymous said...

I am sure the MOD is not going to accept this selective unsolicited bid. If it does, the whole procedure will be back to square one.

joydeep ghosh said...

@ajai sir

Its simply like 'confabulation' of a man who lost a deal and will possibly his post in the near future.

India and France are working on some current and future deals like Scorpene, Super Scorpene, Baracuda SSN, MICA missile, Mirage 2000 upgrade, sale of UAE Mirage 2000 to India(possibly). The Rafale deal will definately hasten or smoothen other deals.

If we had selected Typhoon I cant see anything in which we would have gained so many advantages.

Someone needs to tell this man 'enough is enough' accept defeat

thanks

Joydeep Ghosh

Anonymous said...

If the Eurofiasco Typhoon is so good then why the British and the Italians are investing all their money in the F-35.


The truth is Eurofiasco Typhoon monorole aircraft is a gigantic failure as an aircraft and as a program. This money pit offers very little and takes a lot.


Last but not least, all Typhoon exports have been tainted by corruption allegations (Saudi Arabia : SFO investigation canceled by Tony Blair, Austria : investigation currently on going).

Anonymous said...

I think Rafale and Typhoon are both over priced, and I hope this deal gets cancelled as it's a total waste of money... with elections looming over, there is a good chance of that happening. However, if the deal is to go forward, I think MOD can review the revised Typhoon bid, and use that to negotiate with the French and see if they too can lower their price.

Regarding, some folks feeling that we should not buy british as they colonized us, I would like to remind them that French too had colonies in India.... Just a gentle reminder.

Subho said...

@ Anon - 21:17 and others...

I don't believe anyone is suggesting that we shouldn't buy British because they colonized us 400 years ago! What we as Indians should have a problem with is with the British politicians, public and media behaving like kids in a "Gali" cricket match - "I get to bat first or else I am going home with my cricket gear" !
It was fair game for them to bid lower than Dassault. That they didn't and now they hit back as if they were entitled to win despite their higher price contrary to the rules of the competition.
Here are a few good reasons why a deal with France makes sense :

(i) The French are not fair weather friends like the United States or Britain. They stood by us in times of need and we can count on them more than the Brits or the Germans.
(ii) There is more on the table from the French side than meets the eye - guarantees of TOT on civilian nuclear applications and assured guaranteed supplies of nuclear fuel for our reactors,complete and unquestionable support for India's bid for a permanent membership of the U.N security council, technological assistance with nuclear submarine design and development, TOT on radars and missiles and on and on. Britain for all its bluster cannot even dream of matching what the French have brought to the table - period !

(iii) The Rafale has proven its worth in the AF-Pak & Libya campaigns arguable much better that the Eurofighter.

(iv) While the EFT is a marginally newer platform, disagreements amongst its partner nations over funding and design tenets will dog its future development programs. India cannot afford to be held hostage to such grid-lock over a major defense acquisition program.
The Brits themselves have voted with their money against the EFT program by quietly removing funding from it and transferring it towards funding the development of the F-35. So why are they barking ?
There have been widely publicized reports over the unavailability of spares for the RAF's Euro-fighters during the Libya campaign. Haven't we learned our lessons with the Russian MiGs to realize how big of a red flag that is ? The IAF never had problems with spares for its Mirages. Even so we needed to jerry-rig the Mirages with Israeli weaponry during Kargil, Dassault & Thales engineers were on the ground in a matter of days to get the Mirages up in the sky loaded with precision guided ammunition to blast away enemy bunkers ! That's the kind of support you want from a supplier - not hollow rhetoric !

(vi) The IAF operates a fleet of Mirages and the ground infrastructure and resources required for the upkeep of the Rafale fleet would be incremental. This is likely to reflect favorably in lower cost of ownership over the lifetime of the
jets.

Some including Col. Shukla has suggested that India should have cancelled the MMRCA program and done an FMS deal with the U.S for the F-35. I respectfully disagree with that assessment for a few reasons. First off, the F-35 wasn't and still hasn't been offered to India by the U.S.
Two, even if India were to be offered the F-35 at a future date, India as a late entrant to the game would only get a back-row seat that could push the date of induction of the first F-35 closer to 2020, hardly something that we can afford, given our geostrategic
compulsions.

All in all I believe that the Rafale is indeed a smart choice for the IAF and satisfies amply the pressing needs of the Indian air force and the country.

Anonymous said...

So as in ingrained in their blood... the british was in the fore front... to loot india... by over quoting... for the typhoon... as they did for... more than 2 centuries... Anglo Saxon's... in east of atlantic and... to its west... can't be... trusted...

Ravindra said...

I hope the choice of IAF is respected by MOD and whichever aircraft that they havev finalised should be the final word in MMRCA deal irresoective of the price wars and geopolitical equations with the other suppliers.

Anonymous said...

Two clear differences between the two planes (this is a conjecture, but pretty likely is true)-

Typhoon is the better weapon system for the IAF. But Rafale provides more benefits (substantially) to the Indian Industry, including our very own LCA. Explanation-

Take just one example- Samtel. They will be supplying avionics displays for the upgraded Mirage 2000s and now for the Rafale. In a sense, strenghthening Samtel, means streghthening our very own LCA supply chain. Since LCA also uses displays etc. mfg by Samtel!

With this overview, plus the fact either of the Typhoon or Rafale have longevity close to each other (even though Typhoon may be better here, but not so significnatly)....
....Rafale may be the right choice. Cheaper as well.

Mr. Ra said...

British made a costly mistake by overpricing the EFT. Now India can not make another costlier mistake by rejecting the Rafale which is a real omnirole fighter better than EFT in almost all respects.

Anonymous said...

Colonel, there is an news article on defpro.com by Loren Thompson titled why India didnt choose F-35 as their next fighter? you are an avid supporter of the JSF for the MMRCA.

Anonymous said...

Its all over for the Eurofighter as far as MMRCA is concerned. After Rafale's win in India other countries like Brazil and UAE are likely to choose the French fighter. Some of the Arab nations like Kuwait and Qatar may soon join the UAE in opting for the Dassault Rafale and Switzerland will reconsider their decision to buy the Gripen. If these contracts are secured byFrance then the future of their aircraft is secure at least upto 2030.

Anonymous said...

Hi Ajai,

I think it would better if journalists like use ask questions like

1) Did the french not putting sanctions during nuclear test help rafale case?

( any obvious yes here, r might be)

2) So does it look like any sanctions on india economic or anyother are taken into consideration to give business?

( any obvious yes here)

you drive the case, not to messup with India and loose business.. so that next time in future ,they are bit careful and think before any sanctions