While final negotiations between Dassault and the MoD are still to take place, it appears that the size of mega deal could be above Rs 75,000 crore
by Ajai Shukla
Business Standard, 1st Feb 12
The Rafale fighter aircraft built by France’s Dassault Aviation has emerged the lowest bidder in the contest to sell the Indian Air Force (IAF) 126 medium multi-role combat aircraft. According to sources in the defence ministry, the Rafale has emerged marginally cheaper than its rival fighter, the Typhoon, fielded by a four-nation consortium, Eurofighter.
In reaching this conclusion, the IAF has calculated the Rafale would be cheaper than the Typhoon to buy, manufacture and fly over its entire four-decade service life. No prices have been made available, but MoD sources say the Rafale would cost some Rs 25 crore less than the Typhoon apiece.
The ministry did not respond to phone calls, an email and an SMS request for official confirmation.
However, Dassault sources confirm the ministry has informed the company that it has emerged the lowest bidder. Dassault remains unwilling to share details of its winning bid. A ministry committee, the Contract Negotiation Committee or CNC, will now engage with Dassault to hammer down the price before signing a contract.
The ministry had initially budgeted Rs 42,000 crore as the total cost of the 126-fighter contract. Ministry sources say India will, in fact, pay substantially more than that. The final deal size is subject to negotiations, and could go up to Rs 75,000 crore.
Dassault will be required to supply 18 “made-in-France” Rafales in three-four years. After that, manufacturing will progressively shift to Hindustan Aeronautics Ltd, Bangalore, which will build a new manufacturing line for the Rafale.
The Indian contract is a lifeline to the beleaguered French company, which has so far failed to sell a single Rafale fighter abroad.
The French air force and navy have cut down their initially projected requirement of 336 fighters; so far, they have ordered just 180 Rafales. In a TV interview last month, France’s Defence Minister, Gerard Longuet, declared the Rafale production line would shut down if no foreign orders were forthcoming.
India will be the foreign buyer that resuscitates that production line. Muammar Gaddafi’s Libya had declared its interest in buying Rafales, but was overtaken by history. Ironically, the Rafale flew sorties against Gaddafi’s militia during the Libyan civil war last year. Brazil was earlier on the verge of ordering 36 Rafales, but new Brazilian president Dilma Rousseff does not share the pro-Dassault enthusiasm of her predecessor Luiz Inacio de Silva.
The Rafale will eventually equip six squadrons of the IAF, each authorised 21 fighters. It is a delta-wing fighter with canards, which make it highly manoeuvrable and also allow it to land at speeds as low as 200 kmph. This makes it suitable for aircraft carrier operations, a key advantage over the Typhoon.
The fighter needs just 1,300-1,400 feet of runway to get airborne, an advantage in operating from air bases close to the border. Two Snecma M88 engines power the Rafale, allowing it to “supercruise” or fly at supersonic speeds without using afterburners. A key system is the Thales Active Electronically Scanned Array (AESA) radar, which is still under development. The Indian contract demands transfer of technology for the AESA radar.
The order of 126 Rafales caters only to the IAF’s requirement. The Indian Navy, too, has expressed interest in the Rafale (amongst several other fighters) for its aircraft carrier fleet. While the INS Vikramaditya (formerly, the Russian Gorshkov) will deploy MiG-29K fighters, the under-construction Indigenous Aircraft Carrier, with another vessel to follow, will also require carrier-borne fighters. A naval version of the indigenous Tejas Light Combat Aircraft (LCA) is close to flying. However, there is likely to be an additional requirement for heavy fighters like the Rafale for the naval fleet. Experts have forecast India would eventually acquire about 200 medium multi-role combat aircraft.
The IAF evaluated six fighters for this massive contract -- Boeing’s F/A-18 Super Hornet; Lockheed Martin’s F-16IN Super Viper; the Russian MiG-35; the Swedish Gripen NG; the Rafale and the Typhoon. After flight trials in 2010 and early 2011, the Rafale and the Typhoon were shortlisted in April 2011. Commercial bids from Dassault Aviation and Eurofighter GmbH were opened in November 2011. The IAF’s evaluation and selection processes have won widespread acclaim from aviation watchers worldwide.