IAF Rafale News and Discussions - 26 May 2015

[maitya]

Question: What is the basis for the assumption that the Rafale itself will not bring us some strategic benefits?
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So it's not simply about he performance and weapons carrying ability but value that can be bargained for in terms of human skill and automation.
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Shivji, all fine but what exactly is the gain in "human skills and automation" that we foresee from this deal?

I could have understood that part when the original MRCA tender terms were getting negotiated - and that's precisely the reason why the French back-paddled from it, as sharing even the manufacturing tech would mean setting up a high-tech competitor in a decade or so.

So will the
1) CFC wing skin, wing structure (ribs/spars etc), fuselage structural components be built in India - No.
2) Any part of the compressor/turbine disk/blade/vanes/shafts be built in India - No
3) Any actuators will be built in India - No
4) Will the Radar antenna be built (T/R module fabrication), back-end Signal processors be programmed etc - No
5) Will we get to know the design and manufacturing details of the IIR Staring FPAs for it's MAWS and other optical sensors - No
6) Any of the MFDs would be local - No
etc etc etc

So truth be told, we will get zero/zinch/nada wrt aeronautical design/manufacturing tech etc even at sub-system level from this deal - however this deal will assure the operational issues/hassles will be minimized, so IAF is happy (being a true-blue tactical force it should be).

What is however interesting what is this so-called 50% (by value) offset clause will entail - finest wine/cheese making machinery and processes (and training sessions at the French rate) maybe.

Jai ho - Make in India!!

[Austin]

I am not sure why we need the offset for outright purchase we can reduce the price of the deal cost by 25-30 %

[maitya]

I am not sure why we need the offset for outright purchase we can reduce the price of the deal cost by 25-30 %

Well to be fair, that depends upon exactly what is on the offer in the guise of this "offsets" - for e.g. if it loosely reads like "Co-design and development of 110kN low BPR military Turbofan with 9+ TWR, based on Kaveri Core over 5 years", I'll be all ears.

[Austin]

^^ I dont think that would come under offset , the french would ask for an arm and leg to give that kind of engine technology or co-develop it under a new program , even then they will make sure some IPs are jointly owned , but if we need that kind of engine it would be good to have intl tender so that we get fair pricing and max tot/IP's

Probably investing in Indian industry and sourcing things locally are part of offset , I would cut the offset off for such a small fighter deal and reduce the overall cost for MMRCA it makes sense to have offset.

[Philip]

The stark comparison fact remains that an MKI made in India with 70% raw material sourced within India costs around $70-75M only. The spare issue is being sorted out with Indo-Ru JVs with pvt. players like Tatas,Reliance,etc. who are eager to fill this role.There is simply no justification for acquiring Rafales at even $200M+,when you can acquire 3 MKis for the same price.

Take a dekko at what is now being done with the large fleet of MIG-21s,etc. They're being retd.,a few sqds this year on,and "cannibalizing" the retd aircraft to keep the other sqds. in a better state of serviceability.This is possible only when you have large numbers of the type in the inventory.How will one manage to keep airborne just 36 Rafales if they too have some kind of spare/component shortage?
In Indian conditions,like the famous quote about all plane undergo changes on first contact with the enemy,expecting a "90%" availability for the non-BMos capable Rafale is exceptionally optimistic.

In the MG posted earlier,the Q still remains as to what the Rafale's principal role is? It isn't by any stretch of the imagination a strategic bomber that can fly deep into PRC territory and attack the main Chinese cities which are all on its east coast,not in Tibet! For dealing with Pak strategically,we have developed and inducted enough missiles of various types both for tactical nukes and strat. N-warheads.

Unless the Rafale's price is not much above the MKI,it would be disastrous to invest so much money for a few decades when there are many other critical requirements of the IAF,not to mention the LCA project which is supposed to provide the IAF with hundreds of aircraft to replace the MIG-21s and MIG-27s and meet the 45 sqd. goal of the IAF.

[Viv S]

French Have 'Marginally' Reduced Rafale Price, Government Sources Say

The Indian side wants a further reduction in prices for the 36 Rafales, sources say.

NEW DELHI: The French have "marginally" reduced the price of Rafale combat planes but India is seeking more and the multi-billion dollar deal could take at least another six weeks to be finalised, government sources said today.

The price for 36 Rafales, as per the Congress-led UPA tender, keeping the cost escalation and dollar rate in view, comes to over over Rs. 66,000 crore, they said.

This includes the cost involved in making changes that India has sought in the aircraft, including Israeli helmet-mounted display and some specific weaponry, among others.

"The effort is to bring down the price to around Euros 8 billion (over Rs. 59,000 crore)," the sources said, adding that the actual price negotiations only started from January 21.

"They have come down from the original price as per the earlier tender of the UPA but we expect more," they said. Asked about plane price being offered by the French now, they said it has been reduced "marginally".

[Viv S]

Rafale deal: An expensive buy

The purchase eats up defence acquisition budget

Business Standard Editorial Comment

A highlight of French President Francois Hollande's India visit was the signing of a government-to-government agreement on the purchase of two squadrons of the Rafale multi-role fighter aircraft. But continuing price negotiations, already protracted, stand in the way of a formal contract. It bears recalling that the Rafale offer from Dassault was chosen over rival bids exactly four years ago, in January 2012. That was to have been a contract for 126 aircraft, of which the first 18 were to have been handed over by 2015, with the rest being assembled or made locally. Instead, the rapidly rising cost of the aircraft (deliberately under-stated by Dassault) forced the government last year to cancel the deal as unaffordable, and to decide on buying just two squadrons, without any condition for local assembly or manufacture. Prime Minister Narendra Modi had announced that the new, restricted deal would be concluded in about three months; but negotiations continue even after nine months. The cost, meanwhile, has ballooned to an astronomical $250 million per plane (about Rs 1,700 crore). That is equivalent to the cost of perhaps three or four heavier Su-30MKI planes from Russia, and about 10 of the home-made Tejas light combat aircraft (quoted price: Rs 162 crore). In truth, therefore, the Rafale continues to be unaffordable. The implication of buying a very expensive aircraft is that it will eat up a good chunk of the defence acquisition budget, leaving less money for other badly-needed equipment-for all the forces.

One reason for why the government is sticking with the Rafale may be that the air force is short of fighters, and inordinate time has already been invested in the purchase process. Arguably, the air force could simply buy many more Su-MK30s and scrap the Rafale deal. Two factors mitigate against this: the poor serviceability of the Russian plane (frequent engine failures, with barely half the 200-odd Sukhois air-worthy at any given time), and the poor logic in deploying heavy, fuel-guzzling planes in situations where smaller, lighter ones are better suited for the job. Fortunately, Defence Minister Manohar Parrikar has focused on improving Sukhoi serviceability through new deals on maintenance or spare parts which could improve engine life and cut down maintenance delays. Meanwhile, Hindustan Aeronautics is said to be expanding its servicing capabilities.

The high cost and poor serviceability of foreign aircraft (with long-term dependence for the supply of critical spare parts) underline the importance of developing indigenous capabilities. An important issue here is the reluctance on the part of the air force brass to invest time and energy in supporting the indigenisation process-a contrast with the navy's more productive stance. The air force brass has been quizzical of the Tejas light-combat aircraft project, at a time when replacements for the ageing MiG-21s are urgently required. Indeed, the air force has been so sold on the Rafale that it has even obfuscated on the joint project with the Russians to develop a fifth-generation fighter aircraft. Again, Mr Parrikar seems to have banged heads together, because the Indian Air Force and Hindustan Aeronautics have now agreed on the improvements that will be made to the Tejas (to improve its survivability and also ease of maintenance), following which orders for 100 aircraft will be placed. It is now up to HAL to ensure that it delivers on time and with the quality required.

[Viv S]

^Who'd have thought that one day a mainstream newspaper would speak out against an expensive foreign import while supporting a cost-effective domestic product. I believe we may be at a pivotal moment for the defence industry.

[Viv S]

Deadline for wrapping up deal - June 2016.

French ambassador expects Rafale contract within 4 months

By Ajai Shukla
Business Standard, 28th Jan 16

In the first time a senior official has publicly announced a time line for wrapping up negotiations on India’s proposed purchase of 36 Rafale fighters, France’s ambassador to New Delhi says he expects the price to be negotiated and agreed to within four months.

“It will be too long if it goes beyond that”, said Ambassador Francois Richier, speaking to journalist Karan Thapar on India Today TV on Wednesday evening.

On Monday, Prime Minister Narendra Modi and visiting President Francois Hollande of France signed an inter-governmental agreement (IGA), agreeing that India would purchase 36 Rafale fighters from French company, Dassault Aviation. However, both leaders admitted that the price of the contract continued to be a sticking point.

Richier said France was hopeful that, eventually, India would buy more than 36 Rafales. He said that if the contract were extended beyond 36 fighters, there would definitely be a “Make in India” component to the deal.

It has been reported that the deal for 36 Rafales, in flyaway condition, could include an “options” clause of 50 per cent of the contract size. In that case, New Delhi would decide whether or not to buy an additional 18 fighters.

Aerospace industry experts unanimously agree that very little “Make in India” would be possible with just 18 additional Rafales. At best, they would be assembled in India from knocked down kits.

Richier also confirmed in the interview that the Rafale offset agreement had been finalised. However he refused to confirm whether 50 per cent offsets would be imposed on Dassault and Thales, the main Tier-1 supplier to the Rafale programme.

In 2012, Dassault was declared the winner of India’s global tender for 126 medium fighters. However, with price negotiations deadlocked, Modi and Hollande agreed last April that India would buy 36 Rafales on favourable terms. However, these price negotiations too have not made headway.

[member_28756]

Deadline for wrapping up deal - June 2016.

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Hmmm this new deadline by the French is probably because of the new imminent sale to UAE. They are going to put that deal for 60 as a priority thus this new attitude and pressure.

[viveks]

Oh this article is a killer.

I so totally appreciate the ambassador's view..

Mummy mummy mujhe yeh khilona chahiye... ...oh God its the end of the world...waaah, waaah, waah!!! Little boy crys ..he needs that toy he saw from the market.

...so hilarious.

[Philip]

Traditional Indo-Franco bonhomie aside,this massive cost is too much of a burden that can be borne by the services. The Rafale has to be put in context wiuth the other priorities of the armed forces and nation's security.

The possession of N-weapons today is still the global standard of power and prestige. Why is a piddly little island that Britain is today,stripped of empire (barring a few more islands in dispute with the Argies called the Falklands/Malvinas near Antartica,and a rock called Gibraltar also in dispute with Spain this time) trying to preserve its Trident SSBN fleet? It is becos without such a powerful and terrible stick you are dog meat to any powerful nation or mil bloc like the US/NATO whose foreign policy rests upon the foundation of expeditionary warfare! Does one think that China would not have invaded Ar.Pr. and elsewhere on our Himalayan borders if we did not possess N-weapons?

Therefore,the development of our strategic arsenal and delivery systems is the highest priority.Second would come an ABM system to defend our capital,principal cities and key defence/nuclear establishments. The 3 services can then prepare their prioroties depending upon their unique requirements,but based upon the premise that we are a combined tri-service force,not 3 independent forces who come together for a "picnic" from time to time! As Viv has said ,we are perhaps witnessing a watershed moment in our defence policy. Mr.Modi's demand that incompetent officials be sacked in the media today is an echo of the demand that DPSUs send to the PMO monthly statements of progress on projects.

[brar_w]

The stark comparison fact remains that an MKI made in India with 70% raw material sourced within India costs around $70-75M only. The spare issue is being sorted out with Indo-Ru JVs with pvt. players like Tatas,Reliance,etc. who are eager to fill this role.There is simply no justification for acquiring Rafales at even $200M+,when you can acquire 3 MKis for the same price.

What is the point of such comparisons? Even if the MKI (and it does most likely) costs less than the rafale, we cannot compare based on the G2G contract.
What is the cost of the SU-30 MKI, or the Su-35 with the airframe, an associated weapons package that includes 1 or possibly 2 active BVR missiles, WVR missiles, possibly PGM's and even cruise missiles, and also possibly a targeting pod. Add to all that, a contractual guarantee or PBL like deal to supply assured fleet availability of 90% for 5 or 10 years, and invest 30-50% of the deal back into the Indian defense industry. Add to all this intermediate depot level MILCON and prepare 2 operational bases for the aircraft. Does such a deal exist for the Flanker? If not, than what is the basis of you throwing irrelevant cost information every few days? such as 3 su-30's for 1 rafale, 10 Mig-29's for one rafale? Lets, visit the cost topic when Sukhoi or MiG can actually offer similar terms to India or a third party so that we can see what such a deal costs.

[habal]

my opinion is now firmed that these foreign fighters and other needless imports are basically about post-retirement nests for MoD jt secretary and secretary and IAF or IA top brass in chargr of procurement. How else are Adm Nanda and many generals who line posh enclaves in lootyen delhi and ex-ACMs such millionaires.

secondly only those babus and officers who are malleable to such ventures and participate actively in that are given promotion to such posts. That is how the top is compromised, the few good men can be hounded out by destructive and vengeful CR or through some other intricacies.

The nation is then saddled with platform after meaningless platform and our overall security is worse for it. To show for all these purchases we do not even have overwhelming superiority against countries 1/10th of our defence budget.

[Philip]

A massive infrastructure already exists for operating 272 Flankers,plus the weapons you mentioned are already in service with the type.The spares/support problems experienced are mainly due to the inordinate acquisition process highlighted in an Indian mag a couple of months ago (10 stages) before an order is given to an OEM.It is only then that the OEM executes the order. The problem of availability and spares is being seriously addressed with the DM kicking the butts of all those concerned for the Sukhois as well as the LCA,and is roping in Indian pvt. entities for local manufacture of the same. The GOI does not need to spend another $300M per Rafale inclusive in setting up a similar infrastructure that already exists for the MKIs.The comparison is very valid.We will save approx. $200M+ for every Rafale not bought!

[brar_w]

A massive infrastructure already exists for operating 272 Flankers,plus the weapons you mentioned are already in service with the type

Again. I don't dispute any of this and I don't dispute that the the Flanker (any advanced variant) cannot be cheaper than the Rafale. However, the point still stands. There is a cost associated with the Su-30's..There will be a cost associated with buying weapons for it. There would be a cost associated with having an entity guarantee a logistical supply of spares to ensure 90% mission capability rate. On top of that, if the super-flanker is ordered (as you have suggested in the past), there is a cost associated with having Sukhoi invest 30-50% of the entire amount back into the Indian defense industry through an offset. All of this has a COST component to it, that you completely FAIL to include when you throw random fly-away fighter costs figures and draw overly-simplistic comparisons such as 3 Su-30's for 1 Rafale, or 5/10 Mig-29's for 1 rafale.

order. The problem of availability and spares is being seriously addressed with the DM kicking the butts of all those concerned for the Sukhois as well as the LCA,and is roping in Indian pvt. entities for local manufacture of the same.

From open sources, we have KNOWN that the availability of the fleet has been quite poor to barely acceptable depending upon your POV. How many hours has the fleet accumulated over its service life? The availability rate would definitely improve but through investments that the MOD would make to get it up (and there is a Russian cooperation in this regard that would contribute as well - it takes two to tango). What are the incremental costs to get to say 75% instead of the 60% or so that exists today? How much more do you have to spend to get to 90%? Include that incremental cost on top of the 60-70 Million you throw around as the cost of the aircraft if you want to include just one of the added elements that are baked into that 200-300 million cost you throw around for the rafale.

It is disingenuous to NOT bake in all these elements into the flanker or super-flanker costs, and use that number to compare it to a cost of the RAFALE that the entire world knows includes a lot many more elements than simply the aircraft.

[Philip]

No one disputes the facts of aircraft acquisition,plus spares,etc.,plus weapons,infrastructure,etc.costing extra, But we have our own DM saying that the Rafale acquisition cost was double that of an MKI and he presumably wasn't speaking of just the aircraft cost. Even the basic upgrade cost of an M2K (without weapons etc.,) was around $45/50M for just 50 ($2.5B,$50M per plane) when it was just below $1B for 60+ MIG-29s ($15M per plane)! In both cases the types were already in IAF service needing no major input into infrastructure,etc. French "food" appears to come with a v.expensive price tag.

[Suresh S]

Well to be fair, that depends upon exactly what is on the offer in the guise of this "offsets" - for e.g. if it loosely reads like "Co-design and development of 110kN low BPR military Turbofan with 9+ TWR, based on Kaveri Core over 5 years", I'll be all ears.

That will justify the cost if true. otherwise this deal needs to be scrapped and the funds alloted to mainly LCA and more flankers/flanker variants to plug the gap

[brar_w]

No one disputes the facts of aircraft acquisition,plus spares,etc.,plus weapons,infrastructure,etc.costing extra, But we have our own DM saying that the Rafale acquisition cost was double that of an MKI and he presumably wasn't speaking of just the aircraft cost. Even the basic upgrade cost of an M2K (without weapons etc.,) was around $45/50M for just 50 ($2.5B,$50M per plane) when it was just below $1B for 60+ MIG-29s ($15M per plane)! In both cases the types were already in IAF service needing no major input into infrastructure,etc. French "food" appears to come with a v.expensive price tag.

Its entirely possible, that Dassault were at one point quoting $100-120 Million as the price of the aircraft itself. This would be approximately 1.5-2x that of the HAL produced MKI which runs in at around $60-$65 Million iirc. There is no reason to blindly assume that he was speaking of a deal, since no such collective deal for the Sukhoi (either the 30, 30MKI, or 35) exists in the open. Weapons package, and how much support you want to sign up for upfront is in the IAF/MODs hands therefore it is actually safer to assume that he was speaking of the cost of the two aircraft, which is less negotiable than add on packages and offsets.

The Su-35 as per china's deal, was for $83 Million dollars and no other component for that deal was not reported (such as offset or a weapons package).

These however, are unit procurement costs and not package costs, or LCC's. It doesn't take a lot of work to figure out that based on fuel-consumption over an 8000 hour air-frame life (or 6000 hours) a rafale which is lighter and has smaller engines would consume less fuel and therefore would be cheaper from that angle of the LCC. As far as support and upgrade packages, the former does not exist while the latter does not enter into the qualitative nature of the upgrades sought or offered. We know how much these upgrades cost each program (29 and 2K) yet we would need details to even begin comparing apples for apples.

The thing is that you can strip a lot of stuff out of this contract. You can drop the offset clause for one. You can buy weapons separately, you can also buy spares on a per batch basis as is being done for the flanker fleet. You can do all that, and the price won't be $200-$250 Million. It would be much less. However, on that $60 million for the Mki, or the 80-85 Million for the Su-35, you can't really drop anything...Therefore, either add all those costs to the Sukhoi, or drop all misc. cost from the rafale. The Sukhoi would still come in as being cheaper, however the margin would be much smaller.

[sudeepj]

The more I think about it, the more I feel that Rafale acquisition is an effort to build a 'fleet in being', or a capability that makes the adversary change their plans. It will create a nucleus of western technology in the IAF that can then be expanded/wound down based on how strategic events unfold. After all, these high tech weapons cant be ope rationalized in a few years unless there is an already existing infrastructure. There is an increasingly apparent Russia-China axis that doesn't have any room for India. On the other side, US foreign policy appears to be in a confused state. They will do the right thing, but only after trying every other option. England/Germany are suspect and susceptible to domestic political pressures. By themselves, 36 Rafales will be sufficient only for one theater. But we will have the capability to expand the 36 to 72 or more in short order (1-2 years) if there is an actual conflict.

In retrospect, it would be cheaper to buy F18s but what we get in operational capability we lose in strategic autonomy. Su/Migs cant be relied on because the Russian compulsions are making them pick China as a partner. Unfortunately, this is the price of strategic autonomy.

[brar_w]

How exactly would you be able to expand 36 to 72 in one to two years?

[Akshay Kapoor]

How exactly would you be able to expand 36 to 72 in one to two years?

+ 1

[sudeepj]

How exactly would you be able to expand 36 to 72 in one to two years?

My bad. Didn't realize so few (141) rafale airframes had been built so far! For some reason, I 'felt' there were a few hundred in service with the French and those could be bought/borrowed in a pinch. With so few built, we would be lucky to borrow a half dozen.

So even the potential to surge argument is out of the window. The only argument that remains is a nucleus of non-US western/NATO compatible capability.

[brar_w]

The Rafale production is down to single digits per year at the moment from 11 in 2014 iirc. It will most likely swing up in 2016 due to more deliveries to export customers even though france will most likely move its own delivery slots to the right. Additionally, as export orders come in (IAF and UAE will probably be next), the French would most probably like to keep production rates at a reasonable pace so it would be in their interest to stretch out deliveries so as to have options open before FCAS project is ready for production. It also allows for their economy to improve so that they can buy more air-frames since their original projected requirements were for considerably more airframes by now. Generally aircraft take 2-4 years worth of lead efforts to deliver, and if you want to introduce a ramp in production you have to make more investments even if your production line/process can handle a higher rate. OEM's will resist huge spikes in production unless they are sustainable (commercial aircraft delivery trends are a great example of this) as there is significant cost involved all the way down the supply chain.

[sudeepj]

But sometimes, airframes are transferred from serving airforces in the manufacturing country for 'emergencies'. I vaguely remember this being the case for some aircraft that we bought in the past. Cant recall the make/model. This was what I had in mind when talking about the surge capability.

[brar_w]

I wouldn't count on that being the case. Looking at the French force structure, they are well on their path to being quite a bit smaller from a fast jet perspective than in the past. It would take quite a strategic partnership for them to openly send aircraft to the IAF especially in an open conflict with China, a natino that is going to be among the most important trading partners for them going forward (including their commercial aerospace industry).

[Lalmohan]

But sometimes, airframes are transferred from serving airforces in the manufacturing country for 'emergencies'. I vaguely remember this being the case for some aircraft that we bought in the past. Cant recall the make/model. This was what I had in mind when talking about the surge capability.

the first batch of jaguars we got were ex RAF IIRC

[sudeepj]

I wouldn't count on that being the case. Looking at the French force structure, they are well on their path to being quite a bit smaller from a fast jet perspective than in the past. It would take quite a strategic partnership for them to openly send aircraft to the IAF especially in an open conflict with China, a natino that is going to be among the most important trading partners for them going forward (including their commercial aerospace industry).

Agreed. But trade is changing. There is some dawning realization in the west that China is not a normal country, content with raising the standard of living of its citizens. But going along this tangent will be a digression from the main thread. By any line of thinking, the US appears to be the one country that has a motivation (Pacific hegemony), means and intent of having a long term conflict ridden relationship with the Chinese. A French fighter.. It *will* preserve a nucleus of a Western platform in India.. but at what cost. And clearly, the capability is not superlative..

Its said in jest, but I think both the Indians and Americans will eventually do the right thing. But only after they have exhausted every other option.

[sudeepj]

But sometimes, airframes are transferred from serving airforces in the manufacturing country for 'emergencies'. I vaguely remember this being the case for some aircraft that we bought in the past. Cant recall the make/model. This was what I had in mind when talking about the surge capability.

the first batch of jaguars we got were ex RAF IIRC

Yes!! Thank you! I think even the hawks. Its interesting that this sale came 5 years after the 1974 Peaceful Experiment.

[Viv S]

My bad. Didn't realize so few (141) rafale airframes had been built so far! For some reason, I 'felt' there were a few hundred in service with the French and those could be bought/borrowed in a pinch. With so few built, we would be lucky to borrow a half dozen.

Not a chance! The French will never overtly pick sides against China (which whom they enjoy quite warm relations) by lending weapons to India in the midst of/lead-up to a conflict. They've spent years lobbying for the EU to lift its arms embargo on China.

In fact, thinking about it in those terms, the only nations willing to openly cross China by militarily/logistically supporting India are the US, Vietnam and (in the future) possibly Japan.

[sudeepj]

My bad. Didn't realize so few (141) rafale airframes had been built so far! For some reason, I 'felt' there were a few hundred in service with the French and those could be bought/borrowed in a pinch. With so few built, we would be lucky to borrow a half dozen.

Not a chance! The French will never overtly pick sides against China (which whom they enjoy quite warm relations) by lending weapons to India in the midst of/lead-up to a conflict. They've spent years lobbying for the EU to lift its arms embargo on China.

In fact, thinking about it in those terms, the only nations willing to openly cross China by militarily/logistically supporting India are the US, Vietnam and (in the future) possibly Japan.

I find myself agreeing with you. Unless the Chinese start WW III or a new cold war posing existential threats to the West, I dont see French having either the inclination or the heft to make a huge difference. And the Chinese leadership is not likely to oblige us with such a stark and clear choice.

The only theater these 36 planes can make a difference is to our West and for that theater, the Su30s/LCAs should be enough, but perhaps these rafales are needed for an overmatch.

Edit: And perhaps to tide over equipment shortages temporarily till the US/Indian establishments are done with their foreplay and start the thrusting.

Edit: The only advantages I can see are to maintain a nucleus of western technology in the IAF. The extra money we appear to be paying should be around ~$4 billion over a similar Russian platform (figure pulled from thin air). Worth it? Time will tell.

[ramana]

Nik raised an interesting question on the penalty if Rafale is cancelled.

What is the penalty if it gets cancelled?

[Arunkumar]

I dont think deal will be cancelled. Since Make in India component can only come if order goes beyond 36 and possibly hitting 72, Naval orders might make that up. I think French might be helping us in bridging some Aerospace capabilities although on costly terms which might take a decade or 2 to bridge if done at our cost and institutional abilities. French know this very well and are squeezing the last bit of milk from the udder before it dries completely.

[habal]

bridging some Aerospace capabilities although on costly terms which might take a decade or 2 to bridge if done at our cost and institutional abilities. French know this very well and are squeezing the last bit of milk from the udder before it dries completely.

that seems to be the idea. Since this is the last deal, let us squeeze em for what it is worth.

[SaiK]

What is the penalty if it gets cancelled?

H&D.

[Austin]

Nik raised an interesting question on the penalty if Rafale is cancelled.

What is the penalty if it gets cancelled?

Why would it be cancelled for all matter and purpose its a done deal , both have invested enough time effort money and energy to make it go.

The problem here is our screwed up process for procurement and then the politics , That needs to be fixed but it never gets highlighted , the focus is on the deal be it Rafale , Howitzer or others but not on our flawed procurement process.

[habal]

the cost of commodities, global recession and oil prices and everything has only gone down since it's peak of 2008. In 2008 oil was $120 a barrel, today it is 32 something. If anything, the prices of rafale should be crashing down if current prices are in consideration.

unless you are in reality bargaining for technology and rafale is just a cover.

[rohitvats]

A question - is the price being quoted for the deal inclusive of certain amount of weapons system, spares for 'n' years, logistic support, crew training, simulator etc? Is the entire package being talked about in per unit terms? Something like hotels - where entire construction cost is calculated on per key basis.

If the above be the case, then comparing USD 60 million cost of HAL built Su-30MKI or USD 100 million for direct import for Su-35 is not the correct comparison.

For example, a report by Ajai Shukla spoke about a fighter consuming 5% of its value in spares per annum. A Su-35 at $ 100 million with outright package of 10-year spare parts would cost $150 million. To this, you'd need to add the weapons package on per plane basis. If we take A2A superiority package of 6 x R-27 + 6 x R-73, we're talking about ($ 800K*6+$ 200K*6) = $ 6 million. And then, this gets multiplied by number of such load-outs IAF is looking at.

In the above simplistic case, we've per unit cost of $150+ $ 6 x 3 - $168 million. If you add A2G package, which you will, this amount goes up further. And it does not include price adjustment for inflation. Though, I'd assume the per unit cost of package would be present value of all future cash flows.

Further, we know that French stuff is expensive. By how much, we don't know. Or, at least I don't know. But even if you assume a 25% mark-up on average prices, a Su-35 with above package from French stable would cost $210 million.

If we want to under this $250 million tag for Rafale, we first need the per unit cost of the airplane sans any add-on. That should come from French AF induction numbers.

There is one report here by AS (http://www.business-standard.com/articl ... 026_1.html) which says that France had quoted a price of $80 million for first 18 units to come in ready made from Dassault.

Dassault had quoted $80 million in the MMRCA tender for each of the 18 Rafales it was to supply in flyaway condition. There is no way Dassault can supply the Rafale for less than $80 million today," points out Abhijit Iyer-Mitra, an aerospace expert at the Observer Research Foundation.

In fact, Wikipedia has a pretty accurate description on prices. I quote:

Before taking into account the draft Trademark Law, the total cost of the program for the state was 45.9 billion € 2013. Unit cost (excluding development costs) of €74M 2013 for the Rafale B (110 aircraft) €68.8M 2013 for the Rafale C (for 118 aircraft) and 79 M € 2011 for the Rafale M (58 aircraft).

This data has been translated from this page: http://www.senat.fr/rap/a13-158-8/a13-1 ... tml#toc178 which is senate of France page.

I think we need to cleave the price keeping the above information in mind.

PS: Are we getting Meteor in the package? That thing costs a cool ~$2 million per missile!

[Austin]

A question - is the price being quoted for the deal inclusive of certain amount of weapons system, spares for 'n' years, logistic support, crew training, simulator etc? Is the entire package being talked about in per unit terms? Something like hotels - where entire construction cost is calculated on per key basis.

yes its the entire package deal and not plain jane aircraft , some one posted the news in previous thread what that is to roughly put up 2 squadron infra , MRO facility , Ground infra , weapons , Spares for 5-10 years , IAF demanding 90 % uptimes etc

[Indranil]

Rohit, Austin, it will still be on the higher side. There is no questioning that French maal is one of the most expensive from around the world. They are of good quality at premium prices. Of that, there is no question. Also, I don't agree with adding the cost of infrastructure and logistics. You add these if you HAVE TO add another plane (to IAF's existing 6-7 types). Otherwise, you don't need to. For example, if you get more Su-30s and LCAs which you are anyways going to have 10s of squadrons of, then this extra price doesn't have to be paid.

The question is very simple. WHY DO WE ABSOLUTELY HAVE TO HAVE RAFALES? I was one of the strongest supporters of MMRCA. We were getting 6-10 squadrons of one of worlds premier fighters. All this while learning manufacturing technology which could be dovetailed into our own products. Made a lot of sense. This piddly super expensive buy doesn't make sense. 2-3 squadrons of Rafale does not change the face of a 50 squadron IAF. Neither does it make up numbers significantly or fast enough. In the years of global financial slowdown this super expensive buys don't make much sense to me.