Thaindian News

New Delhi, Oct 25 (IANS) The Indian Air Force (IAF) is finally on the cusp of ordering and acquiring cutting edge combat jets to replace its outdated inventory of Soviet-vintage MiG aircraft.

With the decision of the defence ministry to open the financial bids early next month of the two finalists in the IAF?s medium multi role combat aircraft (MMRCA) tender, IAF can now hope to acquire the first lot of 18 aircraft by end-2014 or mid-2015, depending on when the contract is signed.

The ministry completed the formalities last week and sent letters Monday to representatives of Eurofighter and Rafale for opening the bids on the afternoon of Friday, November 4. The representatives would authenticate the tender packets as their own and as submitted by them earlier, in the presence of senior ministry officials, and then they would be opened by one of the designated officers.

Each bid would have a Summary Sheet and the Best and Final Offer, or BAFO as it is called, and both the bids would be read out to the Rafale and Eurofighter representatives. The ministry officials present would represent the the acquistion, technical and defence finance departments.

Although the ministry’s initial assessment was that the deal could be worth around $10 billion, the Rafale and Eurofighter should cost somewhere around $15 billion.

It is perhaps safe to assume that if the difference between the two bids is 15 per cent or more, then the lower bidder would ultimately be the winner. But if the difference is only marginal, or around four to five percent, then the associated costs on spares, tooling, maintenance and operating costs per hour in terms of fuel, manpower, maintenance and lifecycle would play a role in determining the winner.

In any case, the initial costs, which include spares and support for the first two years, as well as the associated costs would be computed and only then would the winner be declared.

Well placed sources told India Strategic defence magazine (www.indiastrategic.in) that it should take a month or so to do the necessary calculations. The IAF chief, Air Chief Marshal Norman Anil Kumar Browne, has has also expressed this hope.

Notably, the financial bids are valid only till December 2011, and if there is a delay by chance, then the two companies, French Dassault for Rafale and European consortium Cassidian for Eurofighter, would have to renew the validity of their bids. But that is unlikely to happen.

The IAF has been in a hurry for several years to replace its inventory of old Soviet Migs, but it was only in 2007 that a Request for Proposals (RFP), or tender, was issued to these two European companies as well as US Lockheed Martin for the F-16 Super Viper and Boeing for F/A-18 Super Hornet, Swedish Saab for the Gripen and Russia?s Rosoboronexport for Mig 29M2, later designated Mig 35.

The IAF conducted extensive flight and weapon trials within India and the country of manufacture. According to Air Chief Marshal P.V. Naik, who retired a couple of months ago as the IAF chief after overseeing the exercise, all the aircraft were good but the Rafale and Eurofighter scored the maximum points.

The tender is for 126 aircraft, with an option for 63 more. It mandates two years support, cost of weapons, transfer of some critical technologies and 50 per cent of the value of the tender to be reinvested back in India in defence-related industries. The winner has to supply 18 aircraft in fly-away condition and the rest as kits and parts, some of which would be progressively made in India.

It would be up to the winner to choose any public or private sector company for collaborations but the final integration of the aircraft and systems would be done by Hindustan Aeronautics Limited, India?s premier aerospace state-run company.

Nonetheless, both Dassault and Cassidian, a subsidiary of EADS, have tied up with Indian industrial houses like Tatas, Mahindras, Larsen and Toubro as well as HAL, BEML and so on.

Senior and younger officers of the IAF are looking forward to the arrival of the new combat jets, particularly as the Sukhoi SU-30MKI is the only aircraft in IAF?s inventory which can be described as modern. All the other aircraft are 25 or more years old and are being upgraded for a life extension of 10-15 years.

(Gulshan Luthra is a senior defence analyst. He can be contacted at gulshan.luthra@indiastrategic.in)