$4B,$5B now $6B! The cost of the aircraft is going up by the day!
More media reports:
TOI:
More shocks to come,Tejas to be dumped for "another single-engine aircraft"?
In this TOI report,commenting upon tejas being the replacement for the MIG-21s and the waiting period for it has come down to months,there is a subtle hint that if Tejas does not "make the cut",there are alternatives.
TOI:
http://timesofindia.indiatimes.com/indi ... 927120.cms
For LCA Tejas, it’s now about months, not decades
Rajat Pandit,TNN | Apr 15, 2015
NEW DELHI: India's defence R&D establishment will have to fire on all cylinders to fast-track the meandering Tejas light combat aircraft, which is still not fully operational or combat ready, if it does not want the Narendra Modi government to critically re-examine the entire project.
The Tejas project, in fact, may even get some competition in the light-weight fighter category. Defence minister Manohar Parrikar said "some other single-engine, lighter fighter" other than the home-grown Tejas could also be considered for a "Make in India" project to replace the obsolete MiG-21s.
Restricting the acquisition of expensive twin-engine French Rafale fighters to just 36 for now, instead of the original plan for 126 MMRCA (medium multi-role combat aircraft), Parrikar stressed he was trying to plug operational gaps in airpower by improving serviceability of "heavy-weight" Sukhoi-30MKIs as well as "pushing" the DRDO-HAL combine to deliver Tejas faster.
READ ALSO: Tejas achieves another accomplishment in Ladakh
"Don't compare Rafale, a top-end fighter, to MiG-21s, which we will phase out in about six to 10 years. The replacement for MiG-21s will be Tejas or some other single-engine, lighter aircraft. Tejas ki maar bhi kaafi hai (Tejas packs a punch) and it's much better than a MiG-21, but has certain limitations," said Parrikar.
Though some interpreted this to mean impending doom for the Tejas project, a top official dismissed it by clarifying the government was "just keeping all options open" to make "numbers" with IAF down to just 34 fighter squadrons when 44 are needed. "There could be scope for a single-engine fighter, which would be much cheaper than Rafale, somewhere between the capabilities of Rafale and Tejas," he said.
Incidentally, the original plan was that six squadrons each of MMRCA and Tejas would replace the existing 10 Mig-21 and four MiG-27 squadrons. Parrikar, on his part, said, "In the next four to five years, we can add about six LCA squadrons if we push HAL, which I am doing."
DRDO-HAL will certainly need to be pushed on the Tejas project since it's critical for self-reliance in defence production. The first Tejas was handed over to IAF on January 17 but it was in "initial operational configuration (IOC)", which signifies its airworthy but not combat-ready. The pilot training and maintenance manuals are also still not ready, delaying its actual induction into IAF.
READ ALSO: India finally gets indigenous LCA Tejas
The fighter's final operational clearance (FOC), with integration of all weapons like guns, laser-guided bombs and BVR (beyond visual range) missiles as well mid-air refuelling capability, is likely to be delayed beyond the re-revised deadline of December 2015.
The Tejas Mark-II version which the IAF actually wants — with more powerful engines, airframe changes, weight and drag reduction — will begin to come in only by 2021 or so. So, Parrikar will need to do a lot of pushing if he wants swifter deliveries of the multi-role fighters.
Asian Age:
http://www.asianage.com/columnists/made ... t-take-838
Made in India or not, IAF set to take off
Apr 15, 2015
Some people say that the announcement in Paris was a camouflage for transferring the Indian production of Rafale from HAL to the private sector, most probably to Reliance Industries Limited
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Immediately after Prime Minister Narendra Modi’s decision in Paris to buy 36 Rafale medium multi-role combat aircraft in a “fly-away” condition off the shelf, defence minister Manohar Parrikar declared that this would bring “minimum oxygen” to the Indian Air Force that is dangerously short of equipment for its operational necessities. He was not exaggerating a bit. Although a succession of Air Chiefs have been lamenting about the pathetic and deteriorating state of the Air Force inventory, the grave ground reality hasn’t registered even on policy makers, leave alone the people at large.
The number of combat squadrons with the IAF today are fewer than what were considered “minimum necessary” more than half a century ago, after the traumatic defeat in the border war with China in the high Himalayas.
The only modern squadrons in the IAF now are those of Sukhoi-30 MKI. A large number of MiG-21s and MiG-27s are obsolescent and must be retired before the end of 2017. Mercifully, the manufacturers of Rafale, Dassault Aviation, and perhaps the French government, have assured this country that the 36 Rafales in fly-away condition would be delivered within two years. Moreover, the terms on which the 36 aircraft are being acquired seem very favourable. According to reports, the 36 Rafales will cost us around $4 billion. Only recently, Egypt bought 24 Rafales at over $5 billion.
However, the critical question is whether the long-delayed deal with France for the supply of 126 Medium Multi-Role Combat Aircraft (MMRCA) still stands or something else will take its place. It was way back in 2007 that decision-makers in New Delhi finally agreed that as many MMRCAs were needed and the search must begin. Given the huge size of the prize, roughly $20 billion, competition was brisk and no holds were barred. The Indian proposal made it clear that only 18 aircraft will be imported off the shelf and the rest 108 produced in India after transfer of technology. It was in January 2012 that the French Rafale was chosen. Other competitors made no secret of their great displeasure. For instance, a top American official told his Indian counterpart privately, “123 (as the Hyde Act on the Indo-US civil nuclear cooperation is called) should have been matched by 126. But you haven’t delivered it.” Instead of welcoming the Indian decision and converting it into a contract speedily, the French side became obstructive. The matter has been in a quagmire for three long years.
There seem to be three views on the subject at present. One is that a major breakthrough in relations with France having taken place, the deal held up hitherto should be speeded up to strengthen strategic, economic and political relations with an important European country that, together with Germany, plays a significant role in the European Union. Of the two sticking points one is, of course, pricing. The other relates to the production of Rafale in India after the transfer of technology that will be somewhat smaller in number than contemplated originally. Dassault Aviation just does not accept that the state-owned Hindustan Aeronautics Limited (HAL) can be its partner in production in India. It indeed refuses to take “full responsibility” for the fighters made by HAL or for the “inevitable hike” in their production cost. Those who want this problem to be sorted out somehow argue that a rapid expansion of relationship with France is needed because it would be to India’s advantage.
In addition to fighter jets, India also needs as many as six nuclear reactors from the French nuclear major Areva for installation at Jaitapur in Maharashtra. This import will be facilitated if there is an agreement on Rafale.
The second view, shared by many, is best expressed by Admiral Arun Prakash (Retd), a former Navy Chief who was also a member of the Naresh Chandra Task Force on National Security appointed by the Manmohan Singh government in 2011. He points out in a commentary on Rafale that a protracted delay in taking a clear decision will do unto the Air Force what the Scorpene submarine deal did to the Navy. The French company concerned cited some fine print from the contract that had already been signed. The result: a delay in production and an increase in costs.
Some say emphatically that the announcement in Paris was a camouflage for transferring the Indian production of Rafale from HAL to the private sector, most probably to Reliance Industries Limited, owned by Mukesh Ambani. He had indeed signed a memorandum of understanding with Dassault for “cooperation in aviation industry” during the time of the previous government.
Foreign direct investment in defence production projects is part of this country’s policy. Mr Modi’s “Make in India” doctrine has given it a big boost. Indeed, it is being said that in the nuclear industry, Areva’s Indian partners are likely to be Larsen & Toubro and/or the Tatas.
The third view, which has weight and needs to be considered by the government at the highest level, can be summed up as follows: We are now getting 36 Rafales based on the most modern technology. The number of our Sukhoi-30s will soon be 280. Let us concentrate on these and the Light Combat Aircraft Tejas, which should have been ready in 1990s but is available now and should be produced in large numbers. As is inevitable in every situation in India, there is a problem. The Air Force, like the other two defence services, does not like home product and wants imported hardware. The politicians, not the bureaucracy of the defence ministry, must act to change this mindset.
And, of course, we will also have fifth-generation fighter aircraft at our disposal soon. This was supposed to be designed and developed jointly by Russia and India. To quote Admiral Prakash again, “Two prototypes of it are flying in Russia; Indian contribution to both is zero.”
*Adm.Prakash's views are exactly what many have bene pointing out,that the "Dassault delay" was another "Scorpene sting"! Greater delay,higher escalated costs.
The Hindu:
http://www.thehindu.com/opinion/op-ed/f ... 328.eceThe key is technology, not money
The key is technology, not money
PS:Will this deal henceforth be known not as the Rafale deal but as the Reliance deal?Updated: April 15, 2015 04:16 IST
D. Raghunandan
“The prolonged delay over finalising the Rafale deal was reportedly over disputes about the role of Hindustan Aeronautics Ltd.” Picture shows Rafale jet fighters in the Dassault factory in Merignac near Bordeaux, France.
Reuters
“The prolonged delay over finalising the Rafale deal was reportedly over disputes about the role of Hindustan Aeronautics Ltd.” Picture shows Rafale jet fighters in the Dassault factory in Merignac near Bordeaux, France.
If self-reliance in defence is the stated goal, FDI is no solution. India must apply the same tools it did so successfully in space and nuclear science to acquire and develop military technology.
India’s notorious dependence on imported military hardware and the near moribund state of large parts of its public sector defence industry represent a full-blown crisis crying for a solution. India is the world’s largest arms importer and, with at least two decades of not replacing or upgrading obsolescent equipment through either purchases or indigenous manufacture, is on course now to spend around $30 billion in the next few years, and $200 billion in the medium term. For some years now, from the Atal Bihari Vajpayee-led National Democratic Alliance government in 2001 onwards, the government has been veering towards increased foreign direct investment (FDI) in defence manufacturing as a solution to the defence crisis.
The present Bharatiya Janata Party government, despite its rallying ‘Make in India’ cry, has further increased the FDI limit in defence, with 49 per cent now permitted under the automatic route, 75 per cent where technology transfer is involved, and up to 100 per cent in cases involving significant new technology. While some Indian companies are wary of the entry of foreign players, most favour opening up the sector with an eye to the potentially lucrative business opportunities they see opening up.
For and against FDI
The arguments in favour of FDI in defence are familiar. First, public sector companies in defence, Research and Development and allied industries have consistently failed to meet the requirements of the armed forces, especially given the global revolution in military technology. Second, the superior management culture of the private sector will ensure better adherence to budgets and timelines. Third, the country is compelled into repeated imports without any technology transfer (despite contractual obligations) because the military is always urgently in need of the technology. Therefore, the argument goes, encouraging foreign companies to invest in Indian defence and set up industries here will mean that money will be spent within the country, generating jobs and bringing in new know-how, with the possibility of export
“ All the liberalised provisions since 2001 have led to a meagre inflow of only $4.8 billion, in an overall FDI inflow of around $334 billion.”
In my opinion, none of these arguments address the specific and unique needs of the defence sector in India. Whatever else these measures might achieve, they will not help accomplish what must surely be the main goal, namely to build self-reliance in advanced military technology and reduce India’s debilitating dependence on foreign suppliers in the area of national security.
The FDI inflow itself tells a tale. All the liberalised provisions since 2001 have led to a meagre inflow of only $4.8 billion, in an overall FDI inflow of around $334 billion. It may be argued that it is too early to judge, but there are actually good reasons why defence companies do not and will not find FDI in another country attractive, and why there are few such examples across the world.
FDI means a long-term presence in India, and good returns on investment are possible only if repeat orders or contracts for newer models are assured. But, unlike cars or white goods, that will not always happen in military equipment. There may be gaps of many years or even decades between orders. For instance, India bought the Mirage 2000 in the 1980s and has clinched the Rafale deal this year, both from Dassault of France. In France itself, however, Dassault is reasonably assured of continuous business from regular domestic and European orders, as well as from staggered exports. Foreign subsidiaries or substantial FDI will, thus, always put pressure on India for repeat orders. Would dependence on a Lockheed Martin (India) or a Bharat Boeing be really very different from dependence on the U.S. principals?
Yes, more of India’s money will be spent in India rather than in other countries. But the Defence Procurement Policy anyway mandates 30 per cent offsets (50 per cent in high-value contracts). In other words, the supplier must spend 30 per cent of the contracted value within India through local manufacture and services. On the other hand, even if manufacture were by an Indian subsidiary, some specialised technology or components will always need to be imported. As is the case in car manufacture by Korean or Japanese subsidiaries in India, where numerous models that sell in smaller volumes are only assembled in India with imported components. FDI may, therefore, not be so different from offsets in terms of local manufacture, jobs, or money spent.
Where is the technology?
It is often simplistically assumed, unfortunately by policymakers too, that FDI will bring in technology. Nothing could be farther from the truth. All foreign defence majors have protested continually against offsets, and have pressured India into diluting offset requirements one way or another. While they might cite logistical or other issues, the real anxiety is about sharing and losing control over technology, especially if the offset partner in India is a public company whose bargaining power would be greater than that of a private sector junior partner. The delay over finalising the Rafale deal was reportedly over disputes about the role of Hindustan Aeronautics Ltd.
“ It is often simplistically assumed, unfortunately by policymakers too, that FDI will bring in technology.”
India’s confidence in FDI draws a facile equation between foreign investment, local manufacturing and technology inflow. The key, however, is not money but technology. Technology transfer is elusive. It requires not just a clause in a contract, but in the recipient taking determined measures to ensure acquisition and absorption of technology. India has been singularly poor at that, some conspiracy theorists say, deliberately so. Further, domestic manufacturing has not in itself enabled it either. India has a long history of licensed manufacture of defence hardware, from the heydays of the self-reliance credo, the import substitution drives, and the famous “be Indian, buy Indian” slogan. In aircraft, for example, the famous Gnat fighter, the MiG series, the Jaguar, and various French helicopters were made here. In each case, the degree of indigenisation kept rising, sometimes reaching 90 per cent by value, but critical components or materials continued to be imported. India never achieved the stated goal of acquiring the capability to make the next upgrade or new model on its own. True indigenisation cannot happen just through local manufacture, India has to make it happen, but has not yet done so.
The present offsets policy is similarly not being used purposefully to acquire technology. Offsets are viewed in financial terms — money spent locally and jobs created. Instead, offset projects should be studied strategically — Indian scientists and companies acquiring the capability to independently develop and manufacture sophisticated military hardware. To rephrase, the goal should be ‘Made by India’, not merely ‘Make in India’. This is true for all technology, but crucial in defence. India has done it in space and nuclear technology. Why not in defence?
FDI in defence is an incorrect answer to wrong questions, a false solution to problems not posed properly. If self-reliance can be achieved in the strategic fields of space and nuclear technology, through dogged pursuit and by creating institutions of excellence with political support, there is no reason why it cannot be done in the equally strategic area of military hardware. India even has a Minister of State for Defence Production but nobody seems to know what the office is meant to do.
No self-respecting nation of India’s size and technological capability can or should accept dependence on foreign manufacturers for defence requirements, whether directly through imports or indirectly through FDI. This is not just about national prestige but a matter of vital national interest.
(D. Raghunandan is with the Delhi Science Forum and is President, All India People’s Science Network. E-mail: raghunandan.d@gmail.com)