June 22, 2011

US may land deal for re-engining of Indian Air Force's Jaguar too

(The Economic Times ) : The US is likely to be the prime beneficiary of yet another lucrative military contract, after the defence ministry withdrew its commercial tender for the re-engining of the Indian Air Force's Jaguar Deep Penetration Strike Aircraft last month.

New Delhi is likely to proceed through the Foreign Military Sales route as the existing defence policy does not allow procurement from a single vendor.

The latest development is likely to propel the US-based diversified conglomerate Honeywell, which was one of the two vendors invited to supply new engines, as the prime contractor for the new engines, especially after British engine-maker Rolls-Royce pulled out of the competition in March 2011. The tender for the re-engining of the Jaguar aircraft, which was cancelled by South Block last month, has been estimated at $670 million, and calls for the supply of between 200 and 250 engines.

"Commercial tenders cannot end up in a single-vendor situation. This (Jaguar re-engining tender) is likely to be a government-to-government deal," a ministry source said on the condition of anonymity.

For the Jaguar re-engining programme, Rolls-Royce, the world's second-largest engine-maker, had offered its Adour MK-821 engine, an upgraded version of the Adour-811 engines that are currently powering the fleet.

In an emailed response to queries sent by ET, the Westminster, London-based company said it has informed the government, IAF and state-owned defence undertaking Hindustan Aeronautics that it "will not be responding to the RFP".

"The IAF RFP issued in November last year and later confirmed at the Bid Conference in Delhi now calls for a new engine not an upgraded engine," the company said in a statement.

However, Honeywell has elected to stay in the competition, through its offering, the F125-IN Turbofan engine. "Honeywell remains fully committed to supporting the Indian Air Force and the Indian Ministry of Defence in their procurement process for an engine upgrade for their fleet of Jaguar aircraft," Pritam Bhavnani, president, Honeywell Aerospace India, wrote in an email.

The IAF, currently, has about 125 Jaguar strike fighters, but the existing engines on the aircraft have been deemed underpowered as per modern-era battlefield requirements, and a decision to install brand-new engines with greater thrust, has been taken.

With Honeywell still angling for the contract, New Delhi is likely to work directly with Washington for the supply of the engines, with the deal being concluded at the government-to-government level, according to informed sources.

The IAF wants to retain its Jaguar fleet and have been insisting that new engines will increase its longevity. Operationally, the the Jaguars have been used by the IAF, with a great degree of success during the Kargil conflict, in conjunction with its Mirage-2000 fighters.

However, upgrades of existing fighter fleets have not met with much success in recent times, with the Mirage-2000 retrofit seemingly in limbo, as the government continues to be at logger heads with French defence vendors Dassault and Thales over costs.

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