Europe pips Russia in mega mid-air refueling aircraft deal

After having lost out to the US in the race to supply "attack" and "heavy-lift" helicopters to India, Russia has now been upstaged in yet another mega defence deal. India has selected the European Airbus-330 MRTT over the Russian Ilyushin-78 mid-air refuelling aircraft in an Rs 8,500-crore contract.

Defence ministry sources on Thursday said the European Aeronautics Defence and Space Company (EADS) "is now being called for the final commercial negotiations" for acquisition of six Airbus-330 MRTT tankers.

"The actual contract will be inked in the 2013-14 financial year since commercial negotiations with EADS will take some time. Moreover, there has been a massive cut (Rs 10,000 crore) in the defence capital budget for the ongoing fiscal," said a source.

Both the four-engine IL-78 and the two-engine Airbus-330 had passed the extensive field evaluation trials conducted by IAF but the latter emerged the cheaper option in the subsequent commercial evaluation. "Though the two commercial bids were opened earlier, the final costing last week put the Airbus-330 as the L-1 (lowest bidder) on account of life-cycle costs," said a source.

IAF, which already operates six IL-78s since 2003-04, is looking to induct the six new tankers or "force-multipliers" from 2017 onwards to further enhance its "strategic reach" capabilities. Only a handful of countries operate such tankers, which with their "booms" can refuel fighters and other aircraft in mid-air to virtually double their radius of operations. IAF's Sukhoi-30MKI fighters, which have a cruising speed range of 3,200-km, for instance, can strike high-value targets deep inside China with in-flight refuelling.

Despite the recent setbacks with countries like the US, France and Israel muscling into the lucrative Indian market, Russia will remain India's largest arms supplier for the foreseeable future. As first reported by TOI, the imminent inking of the final design contract for the joint development of the fifth-generation stealth fighter will further buttress Russia's position. India will eventually end up spending around $35 billion on the project over the next two decades.

This fresh acquisition of the tankers, however, once again underscores the long-winded Indian defence procurement process that often gets derailed mid-way, leading to huge delays in modernization of the armed forces.

Under an earlier 2006 tender for the tankers, IAF had then also selected the Airbus-330 over the IL-78. But the tender was scrapped in early-2010 after the finance ministry "expressed certain reservations relating to the competitiveness of the bids and the reasonableness of the price".

The current contract is the result of a fresh tender floated in 2010, where "life-cycle costs" were also made part of the selection process unlike the first one. "Four to five years have been lost. IAF could have got the Airbus-330 MRTT much earlier and at a cheaper cost," said the source.

The MRTT (multi-role tanker transport), based on the Airbus-330 wide-bodied commercial airliner, can carry 110 tonnes of fuel to "`top-off" several fighters simultaneously through its "aerial refuelling boom system".

EADS touts its tanker as the fastest one in the business because it can transfer 4,600 litres per minute, greatly reducing the refuelling operation time. The MRTT can also be used as a transport/cargo plane, capable as it is of carrying around 380 passengers or a 45-tonne payload. 

Times of India