India likely to sign $20 bn fighter jet deal only under next government

[Indo-guy]

Govt probing complaints in mega combat aircraft deal - Rediff.com India News

Govt probing complaints in mega combat aircraft deal
February 06, 2014 16:33 IST

The government is looking into the complaints about the procedure to determine the winner of the multi-billion dollar combat aircraft deal, Defence Minister A K Antony said on Thursday while admitting that there was no money to sign such a big deal in this fiscal.

"There are complaints about the procedure of calculating the life cycle cost and that issue is not yet settled. Before bringing the deal before the cabinet committee on security for the final approval, we would like to get clear on that aspect," he told a press conference in New Delhi.
Antony hoped that deal will be finalised in 2014-15.
French Rafale fighter aircraft has been the lowest bidder in the medium-multi-role combat aircraft deal, which is touted as the "mother of all deals" and is expected to cost India more than Rs 60,000 crore.
As per the Indian defence procedure, the firms offering lowest prices and meeting the requirements of the respective services are given the contract and in this deal to procure 126 combat aircraft, the LCC has been taken into view to determine the lowest bidder.
Senior Bharatiya Janata Party leader and former finance minister Yashwant Sinha has written to Antony raising a number of questions over the "conceptual shift" in the defence procurement policy and expressed fears that the LCC concept may bring in corruption.
Asserting that the negotiations in the deal were still progressing, the defence minister said the financial condition of the government was not good and "there is no money for this."
"Almost all the budget has been spent. Many other projects are also in the pipeline," he said.
Asked whether the government would buy more Su-30MKI combat aircraft from Russia if the deal with the French aircraft manufacturer does not fructify, Antony expressed hope that, "The M-MRCA will materialise next year."
He said the government was making headway in the deal and taking all the possible care in the process to ensure that there are no loose ends in the "mother of all deals".
After a five-year long process, India had selected the French Dassault Aviation last year for meeting its requirement for 126 combat aircraft edging out the European consortium EADS' Eurofighter Typhoon fighter jet.
The defence minister said his department has already spent 92 per cent of its funds allocated for modernisation and the remaining is also expected to be utilised soon.

 

[egodoc222]

this is turning out to be a joke now...if it isn't already

 

[Excelias]

Let us see how the frenchies cope.

 

[Chinese-Dragon]

Let us see how the frenchies cope.

Dassault won't be able to survive without this order. This is their lifeline.

 

[MehrotraPrince]

Dassault won't be able to survive without this order. This is their lifeline.

Not correct. They not only will survive but flourish, this is a purely misconception that this deal is lifeline for them.

Reason is quite simple, fighter plane is just one product of Dassault and they already have French air-force as their primary customer. If the deal goes down then I see just one negative point i.e. the cost of future upgrade + new order will increase, nothing more and nothing less.

 

[Chinese-Dragon]

Not correct. They not only will survive but flourish, this is a purely misconception that this deal is lifeline for them.

Reason is quite simple, fighter plane is just one product of Dassault and they already have French air-force as their primary customer. If the deal goes down then I see just one negative point i.e. the cost of future upgrade + new order will increase, nothing more and nothing less.

You seem to know more about their business than I do, so I will take your word for it.

But this is their "killer deal" for exporting the Rafale, no other potential customer could make such a large order.

 

[MehrotraPrince]

You seem to know more about their business than I do, so I will take your word for it.

But this is their "killer deal" for exporting the Rafale, no other potential customer could make such a large order.

It's not about my knowledge but about ground reality which fan-boys from my own country don't understand.

Yes this deal is important because, this deal will bring hard cash for their future research for further developing Rafale, but still will be a small part of what they spend in R&D.

Think it that way, will Project J-10 die if no export happens? NO
Will Project Tejas die if no export happens? NO

Exports only lowers the cost of future upgrades and can bring some money for future projects, but is still peanuts when you compare the total R&D cost especially in European countries.

 

[Excelias]

The french MIC faces stagnation,I doubt they will flourish and grow without export orders,especially this order.Unless they start to sell the PRC as they seem to be itching to do.

 

[PoKeMon]

Wrong analogy. Airforce has spent 92% 'allotted' budget which was slashed earlier. If it was not slashed, it would not have any problem for them.

GOI had said to provide additional budget for MMRCA deal which they are not now because of scarcity of money.

 

[halupridol]

To politicians of Congress, national security comes second after election.

sadly for india.....u can put the name of any indian political party,in place of congress here....but still u'll stand correct.....
ps-i am not congressi....

 

[Kloitra]

How much money was needed to sign the deal in this fiscal? Given the price of one fighter rumoured to be around $100 mil, the off the shelf 18 would cost about $1.8 bil.

It's not about my knowledge but about ground reality which fan-boys from my own country don't understand.

Yes this deal is important because, this deal will bring hard cash for their future research for further developing Rafale, but still will be a small part of what they spend in R&D.

Think it that way, will Project J-10 die if no export happens? NO
Will Project Tejas die if no export happens? NO

Exports only lowers the cost of future upgrades and can bring some money for future projects, but is still peanuts when you compare the total R&D cost especially in European countries.

Do you know how much revenues or net income Dasault had last year? And export as big as this can enable R&D for a new plane by itself, can assist in more exports, can reduce the cost of some products. How does that matters? There wasn't too big a difference between the cost of Rafale and Eurofighter.

 

[janon]

Just as I had expected.. but I was hoping present government to sign deal of 18 jets at least. Now if this is upto next government, you can easily say they wouldn't sign the deal until Indian economy starts improving again. New Indian Government wouldn't want to take blame of "wasting" 20 billions when Indian indigenous jets were doing that well.

The thing is, the more the signing is delayed, the less sense it makes to sign up for it. The rationale for buying an MMRCA grows dimmer every passing day, with the LCA shaping up, and the 5th gen fighters appearing on the horizon for all countries. The MRCA requirement was put forth in the year 2000, as a desperate measure to arrest falling squadron numbers because the IAF had the foresight to predict that LCA, the replacement for the mig-21s, would not arrive soon enough. 14 years later they are still waiting for the ''quick-fix'' solution to materialize. However, now we have other options - the LCA mk1 will be ready for prodution before the first Rafale can arrive. It makes much more sense to churn out LCAs in large numbers, while adding Su-35 kind of technology to the MKIs to maintain qualitative edge. Then wait for the 5th gen fighters to arrive, instead of spending 5th gen level of money on a 4th gen jet.

At this stage, even an outright purchase of F-35 makes more sense than the rafale.

 

[fsayed]

good decision stop this contract order more tejas 1 from current 40 to 120 and buy some mig 35 (60) stop gap

 

[Kloitra]

The thing is, the more the signing is delayed, the less sense it makes to sign up for it. The rationale for buying an MMRCA grows dimmer every passing day, with the LCA shaping up, and the 5th gen fighters appearing on the horizon for all countries. The MRCA requirement was put forth in the year 2000, as a desperate measure to arrest falling squadron numbers because the IAF had the foresight to predict that LCA, the replacement for the mig-21s, would not arrive soon enough. 14 years later they are still waiting for the ''quick-fix'' solution to materialize. However, now we have other options - the LCA

Certain tech, which might not be gained with FGFA. A mid class fighter, which LCA is not. A relatively low maintenance fighter, which the 5th gen are perceived not to be. Fighter which can perform missions like SEAD better than other existing ones, availability of certain weapon systems and probably some more.

 

[janon]

Certain tech, which might not be gained with FGFA. A mid class fighter, which LCA is not. A relatively low maintenance fighter, which the 5th gen are perceived not to be. Fighter which can perform missions like SEAD better than other existing ones, availability of certain weapon systems and probably some more.

I am aware of all that. But the question is, does the ''low maintainance'' matter, if the upfront costs are three times that of the MKI? The rationale for having a medium category fighter is that it should be cheaper than a heavy one - as it turns out, the medium fighter we selected is anything but cheap. In addition to the ludicrous cost of the fighter, there are also associated costs of training for a new platform, maintaining a trained flying and ground crew, syllabus and tactics and doctrines, spares and other logistical costs. We have already paid all that for the MKI. Will all these costs be offset by Rafale's purported lower maintainance cost?

Besides, which is the ''certain tech'' that can only be gained from the Rafale, and from nowhere else? Why not simply purchase that tech alone, instead of the entire platform? That is why I said that the longer it takes, the less sense it makes - because the technological gap is being bridged every day by other countries, including Russia.

Rafales will start coming in 2017 at the earliest, if all goes well. By then PAKFA should be ready for testing, and in another 3 years, we will start getting 5th gen fighters, which can perform SEAD far better than Rafales ever can.

Besides, now we also have huge force multipliers like AEWACS that we did not in 2000. The desi AEWACS costs only as muh as two or three rafales. Making a few of those will make the force a lot more potent than 126 Rafales can.