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Ajai Shukla
The winner’s jackpot could soon become even bigger in what is already the world’s most lucrative fighter aircraft tender: India’s proposed purchase of 126 medium multi-role combat aircraft (MMRCA) for an estimated Rs 51,000 crore ($11 billion).
The reason is a breakdown in India’s long negotiations with Dassault Aviation, the French aircraft manufacturer, for upgrading 51 Indian Air Force Mirage-2000 fighters. According to senior IAF sources, Dassault has refused to reduce its quota of Rs 10,000 crore ($2.1 billion) for extending the service life of the IAF’s Mirage-2000 fleet by fitting new radars and avionics. The Ministry of Defence (MoD) considers this price — Rs 196 crore ($41 million) per aircraft — unacceptably high, given that the airframes and engines will not be changed.
In comparison, each of the 126 brand-new, next-generation MMRCAs will cost some Rs 400 crore ($87 million) per aircraft. That includes the cost of technology transfers, as well as capital costs for setting up a manufacturing line in India. Once those costs are amortised, additional MMRCAs would be significantly cheaper.
Dassault’s India head, Posina V Rao, did not return multiple phone calls from Business Standard. MoD sources say Rao is engaged in last-ditch attempts to salvage the deal.
But, the MoD is veering around to the view that the Mirage-2000 fleet should continue service in its current form. After six squadrons (126 aircraft) of MMRCAs have entered IAF service, an additional two squadrons of MMRCAs would be built to replace the 51 Mirage-2000 fighters. That amounts to a 40 per cent rise in the MMRCA’s numbers.
Israeli aerospace companies have reportedly entered the fray, offering to upgrade the Mirage-2000 for half the price being quoted by Dassault. The MoD, however, is not inclined to accept that offer.
Price negotiations for the Mirage-2000 upgrade have travelled a rocky road over two years. Initially, Dassault quoted Rs 13,500 crore ($2.9 billion), which it brought down to the current level of Rs 10,000 crore ($2.1 billion) after the IAF diluted its upgrade requirements. But the MoD believes Dassault’s reduced bid only reflects the diluted requirements, rather than any flexibility on the latter’s part.
The IAF, traditionally a staunch supporter of Dassault and the Mirage-2000 fighter, is apparently changing its views. Dassault, say pilots, has badly damaged its credibility during the recent negotiations by arm-twisting the IAF over the supply of spares for the Mirage-2000 fleet.
The Gwalior-based IAF squadrons that currently fly the Mirage-2000 are Number 1 squadron (Tigers) and Number 7 squadron (Battle Axes).
Five of the six contenders for the MMRCA contract — Boeing, Lockheed Martin, Eurofighter, Gripen and RAC MiG — know they could reap handsome gains, through larger fighter orders, if India chooses not to upgrade the Mirage-2000. The sixth contender, Dassault Aviation itself, realises failure to negotiate the Mirage-2000 upgrade contract could seriously damage the chances of its Rafale fighter for the MMRCA contract.
The fighters in contention for the MMRCA contract are sequentially undergoing flight trials and evaluation, which the IAF expects to complete by April 2010. It will take another six months to finalise the trial report and send that to the MoD, which will then announce the winner of the contract.
The winner’s jackpot could soon become even bigger in what is already the world’s most lucrative fighter aircraft tender: India’s proposed purchase of 126 medium multi-role combat aircraft (MMRCA) for an estimated Rs 51,000 crore ($11 billion).
The reason is a breakdown in India’s long negotiations with Dassault Aviation, the French aircraft manufacturer, for upgrading 51 Indian Air Force Mirage-2000 fighters. According to senior IAF sources, Dassault has refused to reduce its quota of Rs 10,000 crore ($2.1 billion) for extending the service life of the IAF’s Mirage-2000 fleet by fitting new radars and avionics. The Ministry of Defence (MoD) considers this price — Rs 196 crore ($41 million) per aircraft — unacceptably high, given that the airframes and engines will not be changed.
In comparison, each of the 126 brand-new, next-generation MMRCAs will cost some Rs 400 crore ($87 million) per aircraft. That includes the cost of technology transfers, as well as capital costs for setting up a manufacturing line in India. Once those costs are amortised, additional MMRCAs would be significantly cheaper.
Dassault’s India head, Posina V Rao, did not return multiple phone calls from Business Standard. MoD sources say Rao is engaged in last-ditch attempts to salvage the deal.
But, the MoD is veering around to the view that the Mirage-2000 fleet should continue service in its current form. After six squadrons (126 aircraft) of MMRCAs have entered IAF service, an additional two squadrons of MMRCAs would be built to replace the 51 Mirage-2000 fighters. That amounts to a 40 per cent rise in the MMRCA’s numbers.
Israeli aerospace companies have reportedly entered the fray, offering to upgrade the Mirage-2000 for half the price being quoted by Dassault. The MoD, however, is not inclined to accept that offer.
Price negotiations for the Mirage-2000 upgrade have travelled a rocky road over two years. Initially, Dassault quoted Rs 13,500 crore ($2.9 billion), which it brought down to the current level of Rs 10,000 crore ($2.1 billion) after the IAF diluted its upgrade requirements. But the MoD believes Dassault’s reduced bid only reflects the diluted requirements, rather than any flexibility on the latter’s part.
The IAF, traditionally a staunch supporter of Dassault and the Mirage-2000 fighter, is apparently changing its views. Dassault, say pilots, has badly damaged its credibility during the recent negotiations by arm-twisting the IAF over the supply of spares for the Mirage-2000 fleet.
The Gwalior-based IAF squadrons that currently fly the Mirage-2000 are Number 1 squadron (Tigers) and Number 7 squadron (Battle Axes).
Five of the six contenders for the MMRCA contract — Boeing, Lockheed Martin, Eurofighter, Gripen and RAC MiG — know they could reap handsome gains, through larger fighter orders, if India chooses not to upgrade the Mirage-2000. The sixth contender, Dassault Aviation itself, realises failure to negotiate the Mirage-2000 upgrade contract could seriously damage the chances of its Rafale fighter for the MMRCA contract.
The fighters in contention for the MMRCA contract are sequentially undergoing flight trials and evaluation, which the IAF expects to complete by April 2010. It will take another six months to finalise the trial report and send that to the MoD, which will then announce the winner of the contract.
3 comments:
French military aircraft are notoriously costly to buy and maintain vis a vis American aircraft.
IAF has right objected to 41 million $ upgrade per mirage 2000,as for 40 Million it will get a new gripen(flyaway cost) and anyway most IAF mirages are over 20 year old.
Rafale i think will be the last fully made french fighter, and they are finding it difficult to find even one customer for it because of its very high cost.
The IAF has acted judiciously. It would be great if 200 MRCA's are procured as some of them would eventually replace the Mirages.Rafale is already out since the Mirage factor would come into play.It is only TOT which would decide which aircraft would be selected.It has to be the Eurofighter or the Gripen provided IAF can afford the Typhoon The Americans wont agree easily for source codes so they too can be ruled out.cant say anything about Mig-35 since it could be the last choice.
I like the idea of buying more MMRCA (preferably Typhoon Eurofighters) instead of the Mirage upgrades for the same price and maybe carry out a minimal indigenous (or Israeli) upgrade of the existing Mirages to keep them operational, however it the timeframe that is not in our favor. We are at least another five years away from inducting the first batch of MMRCA fighters and would take way more then a decade to get the full strength of 126 fighters operational in the IAF. The Mirage upgrade can easily be completed in a few years time. With the total strength IAF squadrons significantly dropping I doubt we have the luxury to wait until the MMRCA program is able to replace one of the most potent fighters in the current IAF inventory. We have kinda shot ourselves in the foot with the delay of LCAs and MMRCA acquisitions. But yeah I believe a larger MMRCA number and a minimal indigenous upgrade of existing fleet would have been a real good deal. Now that we have gained some experience from LCA program its high time we upgrade our own fighters. Romania is able to upgrade their Mig 21s and Turkey is able to upgrade their F-16s, so why not we?
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