Europe versus France contest begins for world's biggest combat aircraft deal

(Times of India) : Now, battle-lines for the Europe versus France contest, after elimination of US and Russia in earlier rounds, have been clearly drawn. India on Friday opened the financial bids of the two fighters left in the fray for the world's biggest combat aircraft deal, but promptly declared it would take at least two-three weeks to declare the eventual winner since tons of data had to be computed.

For all its promises of "full transparency" in the medium multi-role combat aircraft ( MMRCA) contract to acquire 126 fighters, likely to be the single biggest defence deal in the run-up to the 2014 polls with its overall value set to exceed $20 billion, the defence ministry refused to say anything concrete.

Sources, however, said the "unit flyaway cost" or "direct acquisition cost" of each Eurofighter Typhoon was "higher" than the French Rafale fighter, both of which fall in the $80-$110 million bracket, much costlier than the American, Russian and Swedish jets earlier eliminated after exhaustive technical evaluation by IAF pilots.

But the unit flyaway cost will not be the only factor to determine the lowest bidder (L-1). The MoD will also take into account "life-cycle costs" or the cost of operating the fighters over a 40-year period, with 6,000 hours of flying.

Besides, there are costs of the transfer of technology (ToT) since the first 18 jets will be bought from abroad in a flyaway condition, while the rest 108 will be manufactured in India, under licence, by Hindustan Aeronautics Ltd.

"The bids were opened today in front of the Indian contract negotiating committee, comprising MoD, IAF, finance, production and quality assurance officials, as well as representatives from French Dassault and EADS (backed by UK, Germany, Spain and Italy). It will take a few weeks to examine and evaluate their commercial proposals to arrive at a verifiable cost model to determine the L-1," said an official.

IAF wants the actual contract to be inked by January-February to ensure the delivery of first 18 jets begins by early-2015 to stem its fast-eroding combat edge, with HAL beginning the manufacturing of the rest 108 from early-2017 onwards. "The first jet built by HAL should roll out in early-2017," said an official.

India is also likely to go in for another 63 fighters after the first 126, if the timelines for the under-development Tejas LCA (light combat aircraft) and the stealth Indo-Russian FGFA (fifth-generation fighter aircraft) projects are not met.