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MoD Begins Calculations to evaluate Life Cycle Cost of aircrafts for MMRCA Print E-mail
Written by Ganesh, Arjun   
Wednesday, 09 November 2011
New Delhi: The Indian Defence Ministry has initiated the process of calculation of the Life Cycle Cost (LCC) of the two shortlisted aircrafts - the Eurofighter and Dassault Rafale - in order to determine the lowest bidder and the ultimate winner of the medium multi-role combat aircraft (MMRCA) deal.

On November 4th, commercial bids from the two firms were opened in the presence of their representatives, by the Contracts Negotiation Committee of the Defence Ministry. Though both firms were notified about the cost per unit of each aircraft, confidentiality clauses prevent the figures from being revealed.

According to sources, the per unit cost of the Dassault Rafale is understood to be around 5 percent lower than the Eurofighter. However the final decision will be made on the basis of Life Cycle Cost of these aircrafts, which would be operated for around 40 years or 6,000 hours. The offset and technology transfer proposals made by the firms may also influence the decision.

The ultimate winner is expected to be revealed in six to eight weeks, after which final commercial negotiations will commence with the lowest bidder.

The Government had earmarked Rs 42,000 crore for the deal in 2007. According to officials, the funds can be increased significantly if required.

The offset clause in the tender requires the winner to reinvest 50 percent of the deal amount in the Indian defence industry. The Defence Acquisitions Council (DAC) had approved the offset proposals of the Eurofighter Typhoon and the Dassault Rafale on October 7.

Last Updated ( Wednesday, 09 November 2011 )
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