PKS disagrees with OP.
All it takes for the Indian component of cyberspace to go into a senseless tizzy is for a ‘Bandalbaaz’ masquerading as a journalist to highlight selected quotes from a certain Minister’s interaction during a media conclave, and draw spectacularly outrageous conclusions. This in turn gets to be ‘assumed’ as being the gospel truth, with the end-result being a classic case of the blind leading the blind. Take, for instance, the following two selective quotes that originated 48 hours ago:
“By buying 36 Rafales instead of 126, I have saved the cost of 90 Rafales,” Parrikar said, adding that this amount was around Rs.900 billion (US$15.51 billion). “We will use this money to buy Tejas LCA pricedat around Rs.1.5 billion each,” he added.
“By buying 36 Rafales at a price less than (what was quoted in response to) the earlier tender for 126aircraft, I have saved the cost of 90 Rafales. We will use that money to buy Tejas LCAs”.
Now here’s what it all means. Under the
original M-MRCA procurement process for an initial 126 Dassault Aviation Rafales,
the first 18 (12 single-seaters and six tandem-seaters) were to be acquired in flyable condition off-the-shelf, for which the Ministry of Defence (MoD) would have had to pay only the acquisition costs and related support infrastructure costs. For the remaining 108 Rafales that were to be licence-built in India (74 single-seaters and 34 tandem-seaters of which 11 were be built from semi-knocked down or SKD kits, 31 from completely knocked down or CKD kits, and 66 made from indigenously manufactured kits or IMK), the MoD would have been required to fork out A) the industrial production costs (for setting up the domestic industrial infrastructure and training a skilled pool of human resources); B) acquisition costs that were to be paid to the MoD-owned Hindustan Aeronautics Ltd (HAL); and C) support infrastructure costs for creating the squadron-level and intermediate-level MRO facilities.
Now that the original scheme for procuring 126 Rafales (plus 63 options) has been abandoned, the
MoD will, under Phase-1, be required to pay only the acquisition costs and related support infrastructure costs for the first 36 Rafales.
Under Phase-2, an industrial consortium comprising Dassault Aviation and its Indian counterparts from both the private-sector and public-sector will supply up to 153 locally-assembled Rafales. This consortium—to be dominated by the private-sector—will raise the necessary funding required (for creating the domestic industrial infrastructure and training a skilled pool of human resources) entirely from the capital markets, and will charge the MoD only for the fleet acquisition cost. In other words, the MoD’s Department of Defence Production & Supplies will no longer be required to foot the bill for industrial production costs of the 171 Rafales.
Consequently, this enormous pool of money saved will be invested in R & D activities for the Indian Air Force’s Tejas Mk2 MRCA and the Indian Navy’s LCA (Navy) Mk2. Since both these MRCAs will be brand-new designs, at least five flying prototypes for each type will be required to be built, and each type—Tejas Mk2 and LCA (Navy) Mk2—will be required to undergo at least 2,000 hours of flight-tests before they are awarded their respective airworthiness certifications. For all intents and purposes, these are herculean tasks that require substantial R & D funding-levels, about which I will soon elaborate further in greater detail below.
TRISHUL: Missing The Woods For The Trees