India selects Typhoon & Rafale for MMRCA shortlist - Part 2

Mahendra · Post by **Mahendra** » 25 Dec 2011 13:47

Yes of course, they gave warning but didn't come to the assistance of bhikari country. kevry engine still in the works but rumoured to be better than Chenab enjine on sitara fyter. and at par with Jhelm enjine on JF-17. All said and done even maruti 800 fyter is enough to deal with bhikari country and its supporters on the www

vishnu.nv · Post by **vishnu.nv** » 25 Dec 2011 14:03

Both the MRCA finalist are Hell expensive. Now the Rupee falling to 53 per $ rate the amount we will be paying for the MRCA will be huge. There will be certain objections from the finance ministry. Rupee going by this trend there wont be any more buying other than the initial 126.

The Gripen NG with meteor will be more than suffice to take care of PAK - F-16 and Chinese j-10's, JF-17's ect. Rest of the money put in to LCA, MCA, FFGA and UCAV.

Jamie Boscardin · Post by **Jamie Boscardin** » 25 Dec 2011 14:59

^^
That's exactly what I was saying sometime back.
Its going to be really tough to get this deal "Green flagged" from the finance ministry, with the current political environment + rupee's slide towards 60 + fiscal deficit at 5.5% (overshooting by more than 1%) and FDI inflows drying up.

Had the LCA MK1 got the FOC last year, it would surely have been curtains down for MMRCA.

Nihat · Post by **Nihat** » 25 Dec 2011 16:29

Jamie Boscardin wrote:^^
That's exactly what I was saying sometime back.
Its going to be really tough to get this deal "Green flagged" from the finance ministry, with the current political environment + rupee's slide towards 60 + fiscal deficit at 5.5% (overshooting by more than 1%) and FDI inflows drying up.

Had the LCA MK1 got the FOC last year, it would surely have been curtains down for MMRCA.

That is not how the payment will be made on.mmrca contract. Initially the contract will be signed and payment would be made in tranches as currency risk has to be accounted for by both sides.

Therefore any add on contract would be signed at a different rate depending on floating exchange rate.

Philip · Post by **Philip** » 25 Dec 2011 21:50

From the very authoritative statements emanating from the MOD/IAF about a decision within a "fortnight",one clear fact is that the price-which is now known to those in the know,is NOT a factor that would require a re-evaluation and search for an alternative.That both birds are well more than earlier budgeted costs is also hinted at.This then indicates that a very strong EU lobby iss at work,where whichever bird wins,Europe is the winner.Byzantine bargaining will take place to strike a balance between what India can afford ,which is not prohibitive exciting undue adverse comment and what profit bottomline the Europeans will settle for.

However,given the fall of the rupee,which was asininely not supported by the RB/impotent UPA PM,and huge demands are made for populist schemes and subsidies,required to win elections,the eventual number of MMRCAs which will be acquired/built might take a nosedive in the future,especially if more cost-effective alternatives become available like the LCA MK--2 and extra Super Flankers (at the same price).Unless the price is really prohibitive and there is strong objection from the Fin.Min.,the deal should go through by a whisker,as oen is sure that the foreign lobbies are desperate for an early decision so that in the eventuality of the govt. collapsing for various reasons and unable to complete a full term in offfice,the deal is wrapped up in advance.

Back to the "3-pointer".Has anyone been able to crack the code-recent contests info?

ldev · Post by **ldev** » 25 Dec 2011 22:36

Philip wrote:From the very authoritative statements emanating from the MOD/IAF about a decision within a "fortnight",one clear fact is that the price-which is now known to those in the know,is NOT a factor that would require a re-evaluation and search for an alternative..

No so sure. This only means that the IAF/MOD have a winner. Whether the "winner's" price is acceptable to Ministry of Finance and CCS remains to be seen. If not, it will be like the scrapped Airbus tanker contract.

Philip · Post by **Philip** » 25 Dec 2011 23:19

Idev,in which case has the IAF got an alternative option in its pocket? If the prices hit the roof,then it should be prepared.

arthuro · Post by **arthuro** » 25 Dec 2011 23:31

new digital HUD

ldev · Post by **ldev** » 25 Dec 2011 23:39

Philip wrote:Idev,in which case has the IAF got an alternative option in its pocket? If the prices hit the roof,then it should be prepared.

I think that if the Ministry of Finance digs in its heels (assuming that you have a final figure out of the range), then the IAF/MOD will regroup and in the short term order some more SU-30s and hunt around for some more Mirages. Longer term in such a scenario who knows? The US will be back in the picture probably this time around with the F-35 and the Russians will also be back pushing the Mig-35 as a low cost alternative and it will probably become a single vendor purchase.

trushant · Post by **trushant** » 26 Dec 2011 00:27

Now this clause in the DPP adds some anxiety to the entire deal

Procedure for Procurement on Strategic Considerations
73. In certain acquisition cases, imperatives of strategic partnerships or major
diplomatic,political, economic, technological or military benefits deriving from a particular
procurement may be the principal factor determining the choice of a specific platform or equipment
on a single vendor basis. These considerations may also dictate the selection of particular equipment
offered by a vendor not necessarily the lowest bidder (L1). Decisions on all such acquisitions
would be taken by the Cabinet Committee on Security (CCS) on the recommendations of the
DPB.

Nevertheless.. following things to be kept in mind to understand how the babus in MOD have / must be compiling the cost comparative -
1. CIF (Cost, Insurance, Freight) prices of flyaway units, CKDs, assembly setup and spares would be considered for comparison. Plus ofcourse the offsets would be evaluated and attached a monetary tag
2. In case of bids in different currencies - exchange rate at the time of opening the bids (4th Nov 2011) would be considered for converting the bids in a common currency i.e INR. The rate of Euro was Rs 67.79 on 4th Nov as per RBI reference rate
http://www.rbi.org.in/scripts/ReferenceRateArchive.aspx
3. Cash flows would be at different intervals and quantum for the two bidders i.e cash flow for 18 birds in fly away conditions as per the RFP IIRC, deliveries of the assembly kits, jigs and fixtures, spares etc(here the rate of production for EADS and Dassault plays an important role). To ensure that these two different rate of expenditures are brought on common platform ...NPV (Net present value) of the money spent would be calulated based on discounted cash flow method. Rate of discount as per the DPP and Ministry of finance circular is 9% F.No.5(3)-B(PD)/2010

srai · Post by **srai** » 26 Dec 2011 00:31

ldev wrote:
Philip wrote:Idev,in which case has the IAF got an alternative option in its pocket? If the prices hit the roof,then it should be prepared.
I think that if the Ministry of Finance digs in its heels (assuming that you have a final figure out of the range), then the IAF/MOD will regroup and in the short term order some more SU-30s and hunt around for some more Mirages. Longer term in such a scenario who knows? The US will be back in the picture probably this time around with the F-35 and the Russians will also be back pushing the Mig-35 as a low cost alternative and it will probably become a single vendor purchase.

One alternative (if the price is too high) is to go for 90 MMRCA (5 squadrons) with 100 options instead of 126 MMRCA and 60 options. At $100 to $120 million per plane, 90 MMRCA would fit within the original budget set at $10 billion. Since the first HAL license produced MMRCA would not arrive until 2017 and with peak production rates (and ability to build from raw materials) not happening until 2020 at the earliest, IAF will have plenty of time to order from the options as needed down the road. The main hurdle is to get one of the MMRCA finalist into local production without delay (has already taken 10 years to get here), and then, from there on more can be ordered in batches from the local production facilities.

Rakesh · Post by **Rakesh** » 26 Dec 2011 02:15

That is a possibility. 90 Typhoons/Rafales would be better than no Typhoon or Rafale. One of the issues would be weather EADS or Dassault would provide the offsets required with a reduced order. As much as we need to build squadron strength, we need to get some mileage out of this deal.

Merry Christmas to one and all.

Katare · Post by **Katare** » 26 Dec 2011 02:42

Philip wrote:......
However,given the fall of the rupee,which was asininely not supported by the RB/impotent UPA PM,and huge demands are made for populist schemes and subsidies,required to win elections,the.......
Back to the "3-pointer".Has anyone been able to crack the code-recent contests info?

Leaving aside your credentials about analysing and passing judgement (asinine) on couple of world renowned bankers on banking-matters the bolded part answers your earlier question where the "macho mard" comes from. Your love for "macho mard" and desired for their potency is displayed again.

On a serious note.....
Depriciation of Rs does not linearly relates to the cost of foreign acquisition. Hedging is a profitable business which is used by commercial entities for predictability of cash-flow. Govts don't need to do hedge, in long term non-hedging is net profitable if short term cash-flow is not an issue, which is true for countries/govts.

Actually Rs depriciation* is good for India (and defense sector to) and was long overdue. Most people do not realize but 1991 financial crisis was caused by a dangerously over valued Rupee that govt could not devalue because it would not have been able to pay increased out-go on external laibilities. Since we are net importer decreasing Rs would bring more forex and make it easy to pay for these purchases. Best of all it'll make domestic firms more competitive against imports.

Anyhow imports are never calculated in Rupee terms the figure of Rs 42K Corer that we hear about are actually dollar figures converted into Rs. Quoted prices all come in dollars with hedging already priced in with an expiry date. The price of both the contenders was fixed 3 years back in those sealed bids and they'll be paid for from govt's dollar kitty (which is worth a lot more in Rupee terms). Rupee impact is just a currency conversion game with little consequences for this purchase.

Philip · Post by **Philip** » 26 Dec 2011 04:20

Ha!Ha!Ha! Kats,your sense of humour hasn't failed you. Our great "world-renowned banker" ,our Don Quixote,was conspicuous by his absence and dereliction of duty in defending the rupee recently.If currency devaluation is no big deal,then why is the Euro in such deep bovine faeces? This has come in for scathing criticism from every quarter in the country,and when his Sancho Panzas,the RBI midgets finally intervened,it was too little,too late.The billions in added debt to corporate entities has left them furious and angry.This majestic inaction will be enshrined as part of his disreputable legacy (like Norman Lamont,former Brit. Chancellor of the Ecxhq.,who failed to save the pound) along with uncontrollable inflation,cash for votes,scam upon scam,etc.,etc. When he demits office,hopefully sooner rather than later,I am sure that the sound of fireworks and popping corks will herald his departure. No wonder that (by your stds.,"asinine") national newspapers have in their editorials asked this govt. to "GO" if it cannot govern!

Leaving that sorry state of affairs of the nation's finances aside,the massive amount that we are going to shell out for the MMRCA beggars deep searching questions when a final decision is taken.Some months ago,in conversation with a def. editor of a national media entity, the huge cost of the deal came up.In his opinion it was a tragedy,to acquire fading 4+-gen tech. (when 5th-gen programmes were on globally) for the price that we would be paying,and that was at the old rate of the rupee around 43-45 to the dollar.When it has now depreciated by approx 15%,the additional costs not just for the MMRCA but all along the list of weaponry that the services need will impose a massive burden on a population that is groaning from the burden of price rises in every sphere that aren't coming down.

Mr Mukherjee said growth slowdown and high inflation had become serious challenges.
"The options for fiscal steps as well as monetary measures are increasingly becoming limited. However, there is potential for policymaking in other areas," he said.
"Innovative remedies would be required to address these challenges."

The rupee's fall was mirrored in the benchmark Sensex index.
It followed losses on Wednesday with another 44.67-point slump to 15,836.47.
The index is down 23% on the year, making it the world's worst performing market.

("world's worst performing market".So much for the credibility of our world renowned wankers...sorry,bankers!)

However,we are sorely deficient in radar tech,engine tech,and tactical weaponry especially.The advantage that we would possess over the PRC (who are actually ahead of us in many areas) and Pak is the equation that needs to be solved in large part with this deal.As one wit put it,"buy as much as you can today man,tomorrow it will cost double"! Therefore should we bargain to the max.,commit to the 120 and reduce the number of options if the price escalation is too high and look at somehow getting the LCA MK-2 into large scale production at the earliest.That will do two things,reduce dependence upon foreign acquisitions,plus it will give a huge boost to the local aerospace industry and might need a new plant to be built especially for the LCA production. HAL B'lore manufacturing the MMRCA will have too much on its hands ,Nasik will be still building upgraded Sukhoi-30MKIs and await the start of the FGFA production.One cannot but observe that the IAF's immediate and future "portfolio" of assets is going to be a mix of "high,medium and low".The "mix" and cost of that mix is going to be the crucial factor.

SaiK · Post by **SaiK** » 26 Dec 2011 07:27

I say, if we cancel this tender.. just make it history. Just focus on LCA and AMCA, perhaps an LCA-3 dual engine version on the lines of Mirage 2K. That can be done real quick after FoC/2014. so, an MCA by 2020 is fine as well. This battle has gone beyond any senses to reissue the tender and start all over again. People who think this tender must be canceled must really support MCA rather any other MMRCA.

Rafale or Eurofighter's last chance to survive..

Singha · Post by **Singha** » 26 Dec 2011 07:36

AMCA 1st flight will not be before 2018-20. whatever resources we have will be tied up with Tejas2 for a while.
FOC will take 2030 for sure. the people who will do bulk of AMCA work will be on verge of retirement by its FOC...thats the nature of modern projects. the people who will work on it post-FOC are in primary school now wearing half pants and watching chota bheem

it should not be considered until then and neither should M2K or Mig35 - rest is on the table like more Tejas2, Su30, MRCA or even the JSF after 2022.

probably we will have to go reduced order of MRCA and make up nos with Tejas2 and su30.

SaiK · Post by **SaiK** » 26 Dec 2011 08:04

Then we should double up numbers on Su30++ and Tejas2++ [this would also play vital roles in getting the homegrown AESA and Kaveri on board quicker than with lower production numbers].

manum · Post by **manum** » 26 Dec 2011 10:15

su30++ cost no cheap...it might be time IAF will be forced to wear Indian langot than tommy's...

India is about to borrow amount of billions equal to mmrca to pay some bills, while leasing few assets...
In that case paying that money back is not worth it....

It might be last leg, the last mile of indeginous efforts to be in operational service...Secondly there is already ongoing stormy session of parliament...They wont announce this as of now...

But I would welcome if MMRCA is cancelled...and if not I would like to know how much of that money stays in India in various forms of tech, jobs and industry....

rajanb · Post by **rajanb** » 26 Dec 2011 10:37

I am astounded by the changes in the selection on an L1 basis. Lot of scope for an alleged boforian purchase.

manum · Post by **manum** » 26 Dec 2011 10:56

The amount will definitely raise eyebrows...but I am only hoping them (i.e. MOD,MOF) to be sensible...
Even China cant afford big ticket items in these hostile economic conditions...They are in deep shit...

vishnu.nv · Post by **vishnu.nv** » 26 Dec 2011 11:15

Every economy is in deep shit right now.... We are in a better position. Our country is a developing one only we need to spend huge sums on our infrastructure to make it on par with that of the developed nations. It is also equally important to provide our services the best equipment.

I wish to see Tiffy or Raphael in in IAF but certainly not at this cost. Both are excellent machines but comparing to our threat environment do we need this expensive machine's? We have Su-30 MKI which is an excellent machine and Super Sukhois will be on par with Tiffy or Raphael. Buying a less expensive one like Gripen and fill the numbers would be better. The Gripen NG with a AESA and Meteor will be enough against PAK F-16's and J-10's. In another 5 years we will have almost 272 Super SU-30 MKI along with 126 Gripen NG. Procure another 300 LCA MK2 and 250 PAK-Fa and we have the number one air force in Asia.

NRao · Post by **NRao** » 26 Dec 2011 14:42

Katare wrote: On a serious note.....

++1.

Depreciation of Rs does not linearly relates to the cost of foreign acquisition.

.............................................

Rupee impact is just a currency conversion game with little consequences for this purchase.

The initial estimate was some $8 billion, then it scampered to some $11 billion. Now some reports estimate it to be somewhere between $15 and 20 billion. So, even with hedging (do governments swap?) or whatever other instruments they use, it has to make some difference. After all the "Cabinet" must have set aside some funds for this purpose and I am not too sure if that fund can grow exponentially like these two vendors seem to think it can.

I feel that these two need to be tossed out for gouging. Either that or they have built the offset into the cost (which is not quite gouging).

But, I would be a LOT mor einterested in the alternatives, including the JSF via FMS. I have wondered if a query about JSF FMS would rock this boat. Imagine a F-35FMS!!!

But neither of these are worth $15+ billion and a reduced count does not make matters better. In fact a reduced count will dictate reboot of the process I would imagine.

Per the RFP India has to decide by the end of this month. I think there is a hard stop by then.

nash · Post by **nash** » 26 Dec 2011 14:50

if we consider the Japan deal, then 15bil. $ is more than enough for 126 fighter(F-35).

So there is no point of paying that much money for a 4++ fighter unless we get significant TOT, like engine,AESA,FLIR/IRST,etc.

kapilrdave · Post by **kapilrdave** » 26 Dec 2011 15:12

Why worry about cost so much? If this government has atrocious amount of money to waste in Food Security bill then they must have a couple of billions more for MMRCA as well.

Philip · Post by **Philip** » 26 Dec 2011 15:14

NR,regretfully,leave aside dev. delays,the JSF is leaping ahead pricewise,with only the US prepared to acquire the number planned.The allies are reducing their numbers drastically and are looking for stop-gp options.

In retrospect,I don't know why the M-2000s are being upgraded at $2B+ for just 50+,while 60+ MIG-29s are also being upgraded at less than $1B.When Sea Harrier upgrades were found to be too expensive,a "LUSH" approach was taken,"limited upgrade",with Derby BVR missiles added to its punch and money saved to buy new MIG-29Ks bought for the new awaited carriers.The M-2000 upgrades will be finished only by 2009,say official reports,a laborious and exorbitant upgrade to me,purely from the cost point of view.It would've been understandable if there was no MMRCA contest,but looks profligte in the ight of the MMRCA acquisition.The money for the upgrades could've better been spent in the MMRCA deal itself with only a limited upgrade of M-2000s costing much less.After all,surely the IAF would prefer a new Rafale of EF to an upgraded M-2000? The IN is also using a similar approach to the TU-142s in service.These aircraft are receiving limited repairs and modernisation to last until P-8s start arriving.Vayu says that another affordable upgrade of them would see them last out until 2026.

Strangely,there is also little in the MMRCA deal that one can use in the LCA programme for instance.Had we chosen the EJ engines for the LCA MK-2,the same used on the EF,it would've made some sense.,or even a SNECMA engine.Does there seem to be some "rewarding" system based upon "quotas" at work with the IAF/MOD here?
The US does not get the MMRCA (Europe) but gets transport orders for the same value,engines for the LCA and Jaguar (expected) and attack hlos.In fact,in new orders,the US value wise is probably doing the best of all countries,barring Russia,which has legacy follow-on orders for Flankers,with the new FGFA and MTA projects for the future.

Anyway,the race is yet to run its full course and the final prices are yet to be revealed.

Don · Post by **Don** » 26 Dec 2011 15:41

kapilrdave wrote:Why worry about cost so much? If this government has atrocious amount of money to waste in Food Security bill then they must have a couple of billions more for MMRCA as well.

How is helping to feed the poor a waste of money ? If the government has atrocious amount of money to spend on European defense companies they must have a couple of billions to help fight poverty.

But lets not derail this thread.

Singha · Post by **Singha** » 26 Dec 2011 15:46

>> I don't know why the M-2000s are being upgraded at $2B+ for just 50+,while 60+ MIG-29s are also being upgraded at less than $1B

I have a suspicion the too-good-to-be-true Mig29 upg bill is *cough cough* another episode like the gorshkov wherein once the program starts more demands will come as unforseen issues are seen and eqpt doesnt meet the desired spec.

the M2K upg while being super expensive is unlikely to see such back-loaded price gouging.

kapilrdave · Post by **kapilrdave** » 26 Dec 2011 15:48

Don wrote:
kapilrdave wrote:Why worry about cost so much? If this government has atrocious amount of money to waste in Food Security bill then they must have a couple of billions more for MMRCA as well.
How is helping to feed the poor a waste of money ? If the government has atrocious amount of money to spend on European defense companies they must have a couple of billions to help fight poverty.

But lets not derail this thread.

IMO ToT of euro birds will do more good to Indian aviation. There are better ways of feeding poor. But yes it's OT. I just wanted to point out that this government cannot have excuse of not having enough money.

kit · Post by **kit** » 26 Dec 2011 16:22

maybe the deal would finally be an 'off one' with none the wiser ! The rafale is just there to give some competition to the European fighter.

SaiK · Post by **SaiK** » 26 Dec 2011 20:18

So vishnu, you are not letting go off the gripen! not sure why you are so infatuated with that puppy? Many have the opinion that it will be a hazzard for tejas., which is a fact. Besides, the many to many relationship with parts supplying nation means we are chewed on all fronts, where we need is a controllable and measurable chew rather a random and massive chew. Mil planners need that something can be well determined for use at war. Direct part supplying nation are ideal for us, like Israel or France.

Tejas 2 is ++, and vision 2020 is all for MCA (boosted LCA), and we can wait for AMCA for 2030s.

shukla · Post by **shukla** » 26 Dec 2011 20:37

Govt to announce winner for 126-plus combat jets in 2012
DNA India

Authoritative sources told India Strategic defence magazine (http://www.indiastrategic.in) that the process was nearing completion but there were volumes of paperwork and the complicated costs involving Transfer of Technology (ToT), Offsets, Lifecycle Upgrades and Maintenance Support. Every detail was being looked into as this was India’s -- and the world’s -- single biggest defence tender yet in the 21st century.

The defence ministry has not set any deadline to the process, but it could be a New Year gift to the Indian Air Force as the announcement could come around mid-January. Notably, the financial bids of the two finalists in the fray, European consortium EADS' Eurofighter and French Rafale, are valid only till Dec 31. Both of them could be asked to extend the validity of their offers for another few months.

However, even if the choice is made within this month, the winner would be asked for an extension to facilitate negotiations and finalisation. It may be recalled that the IAF chief, Air Chief Marshal Norman Anil Kumar Browne, had said Dec 18 in Bangalore that “by mid-December we should have a very good sense of who has been selected".

Understandably, by now, the IAF and the defence ministry should know who is winning -- or who is the lowest -- but till all the voluminous paperwork has been examined to the last full stop, the files are Top Secret and literally “For Your Eyes Only” for those dealing with the subject.

The Air chief, who was speaking on the margins of a conference at the Institute of Aerospace Medicine, had also said: "I can't tell anything till the time we finish that work, as there are a lot of complicated calculations and figures that need to be checked."

Initially, when the tender was floated in August 2007, the estimated cost for 126 aircraft with two years’ support and weapons was $10 billion (Rs42,000 crores). Both the European finalists are known to be more expensive than the four others who lost out in the fray, and the defence ministry revised the estimate some time back in terms of the dollar and the euro.

The revision could be 30 to 40% of the pre-bid estimate, or say around to $13-14 billion. But this is only a guess as the winner has to help set up the manufacturing units in India and costing for this is not available. Neither of the two aircraft has been sold anywhere the way India wants. There is also an option clause for another 63 aircraft. Their cost would be additional. Meanwhile, the Indian rupee has been depreciating, but fluctuations are factored in all defence acquisitions and do not hinder the process. No fresh cabinet approval is required in such cases.

Although procedurally the lowest bidder, designated L-1 in the defence ministry jargon, should be the winner, the choice has to be approved by the government, specifically the Cabinet Committee on Security (CCS) headed by Prime Minister Manmohan Singh. It includes the ministers for finance (Pranab Mukherjee), Defence (AK Antony), home (P Chidambaram) and external affairs (SM Krishna). Antony has stated that the selection would be on technical and financial merit, that is, on the basis of IAF's requirements and the price offered. The bid is submitted in two parts: technical and financial.

The IAF disqualified four others in the fray -- Sweden's Saab Gripen, Russia's MiG-35 and the US Boeing F-18 Super Hornet and Lockheed Martin F-16 Super Viper on the basis of points in its selection process.As per the procedure, IAF is not supposed to give any grading like Number 1 or Number 2 to the finalists and both are equal for the defence ministry.

Nonetheless, the government is not bound to select the L-1 as the winner, even if it is much lower, as there is an over-riding clause in the tender. If in the national strategic calculus, the L-2 can be of strategic significance for India, then the CCS can go in for that aircraft.In diplomatic circles, the deal is being described as France (Rafale) vs Europe (Germany, Britain, Spain and Italy make up the consortium that makes the Eurofighter).

Eurofighter’s supporters say that India could gain significant weight in the global arena through this deal. The French say that they have supplied the best of their systems to India without any restrictions so far, and that it would be much easier to deal with a single country than the bureaucracies of four others over the life time of the aircraft -- 6,000 flying hours or 40 years as stipulated in the tender.

So who is the winner?
Procedurally, L-1.

Strategically, only the CCS, the cabinet secretary, the National Security Adviser, the foreign secretary and the defence secretary can decide.

SaiK · Post by **SaiK** » 26 Dec 2011 22:07

So, L1=Rafale, L2=Eurofighter. That is vivid now., and clearly shown in the above article that France did quote lower than EADS, perhaps only marginally low. However, as rightly pointed out, the clause for CCS to override L1 for L2 is very much on the security and strategic calculus angle alone, then it is entirely politics, and how EADS may be made the numbers look advantageous on the paper.

So, watch out for all those news that says EADS has established some research center here or there, some parts being supplied by HAL or some r&d setup. All these are jacking up the strategic L2 angle.

I am sure, there is a larger L2 wing in the CCS political setup than L1 wing, say 51:49. SM Krishna and MMS might weigh more than Anthony and Chidambaram. Their mullaiperiyar bickering could effect decision for France, and favor the Cassadians. All it take is a 3:1 political weight to consider L1.

Philip · Post by **Philip** » 27 Dec 2011 00:03

Which is why I listed out the "3-pointer".I should've also mentioned in order of importance.To be fair to the US (and other) birds KO'd by the MOD,the reason given was that they failed technically/technologically were inferior to the chosen two.Therefore,by this statement ,the prime factor in choosing a winner should be its performance and the best performing aircraft should be placed at the top.

The second factor in order of priority,is the price and life-cycle costs.The degree of advantage/superiority one imagines is not a yawning chasm between the Raffy and Tyffy.They should be fairly close to each other in this factor.Therefore,the overall cost (unit price + life-cycle costs) of both need to be carefully established.Even here the best performing aircraft needs to be within reasonable cost if it is the most expensive of the two.Performance still has the definitive edge over cost.Who would settle for "second-best" in combat?

TOT/offsets are the least important purely from a pilot's perspective.He needs an aircraft to be the master of his skies.TOT however,from the govt. viewpoint generally becomes top priority,as it encompasses extraneous factors outside the domain of the services and their focus-based decision making.These factors have been spelt out in an above post.UNSC seat,political "jointness" with an ally.It is here that vested interests will make their pitch,and only the die-hard will make their stand!

SaiK · Post by **SaiK** » 27 Dec 2011 00:09

That would be a disaster to seek UNSC seat for this order. Would UK and Germany is more important than France on that strategic thought? I doubt it. The strategic angle should not be about what is gained external to the deal, but what is gained with in the scope of $11/12b deal, like ToT, offsets, spares manufacturing, parts manufacturing for global supplies, localization and taking advantage of Indian setup and production facilities, or perhaps offering to move many loss making factory units in Euroland to India.

I am sure babooze will look at these angles, rather UNSC seat, or countering china or stopping sales to pakis., which IMHO is a bad strategy.

Victor · Post by **Victor** » 27 Dec 2011 00:40

Even high school going aviation enthusiasts knew a few years ago what our high-faluting "downselect process" has concluded now--that the two aircraft were technically the "best" and were close enough in technical and cost terms to not make a hill of beans difference if one or the other were chosen for the IAF. If strategic interest could still trump L1 and technical merit, then this whole exercise has been a massive waste of effort and money. What could possibly change the strategic advantage of say France over Germany-UK-Spain-Italy that was not evident a year ago? Why did we not simply hand over the decision to the CCS on day one? We could have saved a few thousand crore and got our planes earlier if we made what should have been a simple decision a year ago.

SaiK · Post by **SaiK** » 27 Dec 2011 01:58

An year ago, the CCS power play would have gone to Unkill outright and straight 6 packer decision it would have been. Unkill would have gone with 126 SH with all those indo-us nuke decisions, especially when MMS was totally under their umbrella decision. It required IAF's stricter process to keep Unkill away from the final two.. by this even gripen and the russkie m35s suffered, which of course has other negatives.

It was all written eons back this MRCA is all about Mirage 2K, and further revisited for Rafale. Rafale was trying to power play by offering 40 of them for outright purchase at $75k or something... not sure, but we did not take it. I was not sure, if our doctrines were clear then for medium multi roles.

Net centricity and AESA became center stage (I don't think these were clearly given on the RFPs), but an advanced AESA radar was definitely needed. Both Unkill and Russkies were off the list on AESA radar, unkill more on the EULA/CISMOA acts, and later on went ahead banning Israeli sale of 2052s for LCA. That was bad decision for unkill.. and the turn of events.

France was front runner, till the arrival of Eurofighter.. The Ef-200 engine deal loss to GE 414 was only an awakening for them.. may be this time they are applying their lessons. It could be very difficult for the CCS to just trash a fantastic offer from the Eurofighter team.

What else?

srai · Post by **srai** » 27 Dec 2011 04:16

Rakesh wrote:That is a possibility. 90 Typhoons/Rafales would be better than no Typhoon or Rafale. One of the issues would be weather EADS or Dassault would provide the offsets required with a reduced order. As much as we need to build squadron strength, we need to get some mileage out of this deal.

Merry Christmas to one and all.

Offsets and ToT could also be staggered with the options. As more options are exercised, more offsets and ToT are also triggered. This is a better way to do it as it will take the Indian industry time to absorb new tech.

Katare · Post by **Katare** » 27 Dec 2011 05:05

Only 5 days left everything is crossed, twisted and wraped, including unmentionables........one of the two things would happen in next 5 days---> either we'll have a winner or we'll get an official news that govt has asked for further extention of validity of bids by both the suppliers. The bids initially had 1 year expiry that was extended by another year asking for further extentions could be cause of......

Bothe companies, like last time, will have right to change/resubmit/pullout bids if they want too. If any of them chooses to do so it'll be a monumental disaster. If I were one of the bidders and knew from my reliable sources that I am going to loose, pulling my bid would be a great way to derail the whole process and still retain some hope for getting a chance to fight again.

If this deal doesn't happen in next couple of weeks, AKA's record of spending all of the budget (and than some)for last 2 years is at stake. Billions will be returned to the treasury to be used for feeding poor children, building hospitals, roads and primary schools.

Singha · Post by **Singha** » 27 Dec 2011 08:29

^billions could be freed up to fight the 2014 elections and vote pandering

suryag · Post by **suryag** » 27 Dec 2011 12:50

Singhaji i see MMRCA money going to FSA