Bids for combat jets open soon
The decks have been cleared by the government for opening of the financial bids in the `42,000-crore acquisition process for 126 Medium Multi-Role Combat Aircraft (MMRCA) for the Indian Air Force, with the Defence Acquisition Council (DAC) of the ministry of defence (MoD) granting its approval on Friday for
opening of the financial bids. The financial bids are likely to be opened within a week to 10 days now. There is also a possibility that the final cost of the deal could be significantly higher than the earlier projected cost in 2007 of `42,000 crores.
There are now two vendors left in the race which are the French Dassault (manufacturer of the Rafale) and the EADS European (German, British, Italian and Spanish) consortium (manufacturer of the Eurofighter Typhoon aircraft). These were the two vendors shortlisted after the IAF’s technical trials last year that resulted in four other global vendors being knocked out of the race. The DAC — that is headed by defence minister A.K. Antony — on Friday approved the offset evaluation report that comprises the offset proposals of these two vendors.
Once the financial bids are opened in the presence of the two vendors, the MoD will begin the complex task of calculating who is the lowest bidder (L1) as per several parameters laid down. The contract will be awarded to the lowest bidder (L1) identified by the MoD. It is estimated that the deal could be inked with the successful vendor by December.
When the deal is finally clinched, the first 18 aircraft will come in a “fly away” condition while the remaining 108 will be manufactured in India under transfer of technology (ToT).
According to the MMRCA Request for Proposal issued a few years ago, the vendor who is finally selected would be required to undertake 50 percent offset obligations in India. The government hopes that the ToT and offset contracts would “provide a great technological and economic boost to indigenous defence industries”.
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