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Home arrow Aerospace arrow MoD approves offset proposals for India's 126 MMRCA deal
MoD approves offset proposals for India's 126 MMRCA deal Print E-mail
Written by Anand, Arjun   
Monday, 10 October 2011
New Delhi:  Indian Air Force (IAF) chief Air Chief Marshal Norman Anil Kumar Browne said that the winner of India's $10.4-billion tender for 126 combat aircraft is expected to be announced in November. India wants to close the deal before March 31, 2012.

The defence ministry on Friday approved the offset proposals for India’s biggest defence deal to buy 126 fighter planes at an estimate price of Rs 42,000 crore ($ 10.4 billion) paving the way for opening the commercial bids in ten days time.

The offset proposals from Dassault Aviation (Rafale) and the Eurofighter consortium (Typhoon) were presented before the DAC by director general acquisition Vivek Rae. Besides the Defence Minister, the two-hour meeting was attended by the three Service chiefs, the Defence Secretary, the Secretary, Defence Production, the DG (Acquisition) and concerned joint secretaries in the Ministry.

After the bids are opened, the Defence Ministry will be able to determine the lowest bidder in the deal. In the MMRCA deal, foreign vendors bagging deals will have to invest back 50 per cent of the worth of the deal in Indian defence industry. This means the winning firm has to reinvest more than Rs 21000 crore in India, either alone or in partnership with an Indian company, in military, homeland security and civil aviation.

However it is understood that the procurement policy has a provision that allows MoD to discard L1 for strategic benefits which the next highest bidder offers. It is said to be vague on what qualifies as strategic benefit.

After the bids are opened to evaluate the lowest bidder, the proposal will move to the Finance Ministry for its approval and it will then go to the Cabinet Committee on Security (CCS) for final nod by the government.

"In the middle of November, we shall be able to announce to the whole world which plane we have selected, the L1 vendor (lowest bidder)," Browne said in his interaction with reporters after he inspected the 79th Air Force Day parade here. "The process for acquisition of the MMRCA (Medium Multi-Role Combat Aircraft) is in its last lap and we should be able to open the bids in 10 days' time from now," he said. He added that after opening of the commercial bids, "complex calculations" would be done in a tabular format of the entire life-cycle cost, the acquisition cost and the technology transfer. It is expected to take two or three weeks to calculate these.

The two planes had been shortlisted in April this year after eliminating other competitors -- American Boeing's F/A-18, Lockheed Martin's F-16, Russian UAC's MiG-35 and Swedish Saab's Gripen -- through a rigorous technical and weapons evaluation process that lasted for over a year.

Together with Su-30 MKI, indigenous Light Combat Aircraft Tejas, Indo-Russian fifth generation fighter, the 126 MMRCA will be the mainstay of Indian Air Force in the coming decades. The winning company is also likely to receive a follow-on order of 80 odd MMRCA.

Speaking on other important IAF modernisation programmes, Air Chief Marshal NAK Browne said said that the C-130J Hercules and the Airborne Early Warning and Control System (AWACS) have been inducted and operationalised in good time. The IAF has inducted five of the six C-130J ordered from the US under a $1 billion deal in 2007 and is looking to place orders for six more in the near future. It is also planning to deploy the additional six aircraft at the Charbatia air base in Orissa. The IAF has also inducted all three AWACs aircraft procured from Israel and has started using them in exercises.

He said that the planned induction of the C-17 Heavylift aircraft along with medium and heavylift choppers will increase IAF's operational flexibility. India recently signed a $4.1 billion deal with the US for procuring 10 C-17 aircraft, which will be alongside the C-130Js at the IAF base here.

On the upgrade programmes involving the fighter and transport aircraft, he said, "Upgrades of Jaguar, Mirage 2000 and MiG 29 fighter aircraft along with An-32 transport aircraft are under way and will help in enhancing their operational relevance."

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