A frustrated IAF has asked the defence ministry to take a decision, one way or the other, on its long-pending case for the almost $2 billion acquisition of six Airbus-330 midair refueling aircraft or tankers to boost the strategic reach of its fighters and bombers.
Stressing the critical operational necessity for fast induction of the tankers, the IAF wants the A-330 MRTT (multi-role tanker transport) deal to be inked as soon as possible, or conversely scrapped, to ensure that a new procurement case can begin afresh.
“The IAF believes the case is just going around in circles without any resolution. It is stuck in the CNC (contract negotiation committee) stage, with Airbus being asked to keep on extending the validity of its commercial bid,” said a defence ministry source.
With French President Francois Hollande arriving on a state visit to India on Sunday, there may now be some additional pressure on the NDA government to fast-track the A-330 MRTT deal since the Airbus group is headquartered at Toulouse in France.
The IAF had first taken up the case for acquisition of the additional tankers in 2006, after inducting six Ilyushin-78 midair refueling aircraft in 2003-2004. The two-engine A-330 MRTT has twice been selected over the four-engine Russian IL-78 in technical and commercial evaluation over the last decade.
“But there are still some issues with the deal, including the life-cycle cost (LCC) methodology used in determining A-330 MRTT as L-1 (lowest bidder) over the IL-78 and pending CBI cases, which need to be clarified,” said the source.
The first tender or RFP (request for proposal), issued in 2006, was scrapped in 2010 because the finance ministry expressed “reservations relating to the competitiveness of the bids and the reasonableness of the price” of the A-330 MRTT.
In the second RFP floated in 2010, both A-330 MRTT and IL-78 cleared the extensive field trials. In the commercial evaluation thereafter, even though the IL-78 was cheaper off-the-shelf, the A-330 MRTT emerged the L-1 under the new LCC system put into practice in defence deals.
The LCC basically identifies the “total cost of ownership” of a particular equipment or aircraft over its entire operational life.
The MoD has also asked the CBI about the “current status” of a pending case against Airbus Industries in a matter connected to the civil aviation ministry. In between, there was also some delay due to change in the company’s name from EADS Cassidian to Airbus group, which had to be resolved in tune with the MoD’s convoluted procurement procedures.
