India plans to take a final call, one way or the other, on the gigantic $20 billion MMRCA (medium multi-role combat aircraft) project to acquire 126 French Rafale fighters before Prime Minister Narendra Modi visits France and Germany in April.
Sources said the defence ministry is now hopping mad with French aviation major Dassault’s continuing refusal to take “ownership” of the 108 Rafale fighters which are to be manufactured by Hindustan Aeronautics Ltd (HAL) in India with transfer of technology after the first 18 jets are delivered off-the-shelf to IAF.
The MoD is also upset with Dassault’s attempts to “change the price line”, which led to its selection over the Eurofighter Typhoon as the L-1 (lowest bidder) three years ago, by deciding the “costing” for HAL on its own. “It will amount to a de facto hike in the L-1 price,” said a source.
If Dassault continues to renege from its earlier commitments, refusing to be “fully compliant” with the original RFP (request for proposal), India will be left with no option but to scrap the entire MMRCA project despite having invested almost a decade in the selection process. Incidentally, the defence procurement policy and Central Vigilance Commission guidelines do not allow the L-2 (Typhoon) to re-enter the negotiations.
As was first reported by TOI, even though 90% of the draft contract is ready, the finalization of the complex MMRCA project has been stuck for almost a year now due to Dassault’s reluctance to stand guarantee for the fighters to be made in India in terms of liquidity damages and production timelines.
Sources said defence minister Manohar Parrikar has written to his French counterpart Jean-Yves Le Drian that India was still awaiting the “empowered” delegation he had promised to send to resolve the imbroglio. The two ministers had decided to “fast-track” the negotiations during talks in New Delhi on December 1.
“The ball is firmly in the French court. India cannot allow any violation of the RFP in such a mega project, nor can it afford to let the negotiations drag on endlessly. A final call has to be taken, one way or the other,” said the source.
If the MMRCA project is indeed scrapped, it will bring to an end the mega fighter selection process launched by India way back in August 2007. This “mother of all defence deals” had global aviation majors salivating at the prospect of bagging the lucrative deal.
After extensive field trials by IAF test pilots, Swedish Gripen, Russian MiG-35, American F/A-18 ‘Super Hornet’ and F-16 ‘Super Viper’ were ejected out of the high-voltage competition.
Subsequently, the commercial bids of the two remaining contenders — Eurofighter Typhoon (EADS), backed by UK, Germany, Spain and Italy, and French Rafale (Dassault) – were opened in November 2011.
Rafale was then declared the winner in January 2012, having beaten the Typhoon both on direct cost of acquisition as well as “life-cycle costs” of operating the fighters over a 40-year period with 6,000 hours of flying. But the final commercial negotiations with Dassault have progressed at a glacial pace since then.