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India's Fighter Jet Negotiations Stall Over Delivery Commitments

Jun. 16, 2014 - 03:45AM   |  
India selected the Dassault Rafale for its fighter jet program in 2012, but contract negotiations have been delayed over a number of issues. (Joel Saget / Getty Images)
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NEW DELHI — India’s $12 billion Medium Multi-role Combat Aircraft (MMRCA) program has run into turbulence due to a disagreement over delivery commitments, according to an Indian Defence Ministry source.

The Indian Air Force has told the new government that Dassault Aviation, maker of the Rafale jet, and Hindustan Aeronautics Ltd. (HAL), which will produce the aircraft in India, must put their delivery guarantees in writing before the MoD signs the contract, the MoD source said.

HAL is unwilling to give any written guarantee on the delivery schedule for the Indian-made Rafales, and instead wants Dassault to guarantee deliveries of the Indian-made aircraft, a condition the French have already rejected, the MoD source said.

The program’s request for proposal stipulates that the first 18 aircraft will be supplied by the vendor — Dassault — in fly-away condition and the remaining 108 aircraft will be manufactured — in this case, by HAL — through technology transfer. The delivery of the aircraft should begin three years after the contract is signed.

India gave Dassault “preferred bidder status” in 2012 for the $12 billion program.

The MMRCA contract negotiations have also been delayed because HAL has not finalized the cost of the India-made Rafale.

No date is available for when the final cost of the Indian-made Rafale will be provided to the MoD, according to a senior HAL official.

Signing the deal within six months is unlikely, the MoD source said.

Executives from Dassault were unavailable for comment.

MoD had set up four subcommittees in the run-up to the finalization of the MMRCA deal with Dassault. They are: Technology of Production; Offsets; Logistics; and Cost Negotiations.

While the committees on Logistics and Offsets are almost ready with their reports, the remaining two are delayed, the MoD source added.

A team from HAL representing various sections of the production department visited Dassault facilities in France last month to understand the production process as it attempts to calculate the cost of the Indian-made Rafale, the HAL official said.

The delays in finalizing the deal have not only pushed back delivery of the fighter, but also led to cost escalations of more than 30 percent, an Air Force official said.

The first request for information for the MMRCA was floated in December 2005; the request for proposals followed in August 2007.

Rafale beat the Eurofighter Typhoon only on the basis of cost, after only the two bidders were left in the field.

The F-16, F/A-18, Gripen and MiG-35 were ejected from competition after the flight trials in August 2011 and the cost was not taken into consideration. ■


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