France on Tuesday virtually bagged the multi-billion dollar Medium Multi-role Combat Aircraft (MMRCA) deal for 126 fighter aircraft for the Indian Air Force, with Dassault Aviation — manufacturer of the state-of-the-art Rafale — declared as the “L1” (lowest bidder), sources confirmed. Dassault beat its European rival, German-led EADS Eurofighter that manufactures the Eurofighter Typhoon. Dassault said it was “honoured”, while its rival Eurofighter said it was disappointed, but respected the decision.
EADS sources said Eurofighter was still hopeful as the contract negotiations are yet to be conducted. Dassault was declared L1 after its financial bid (including aircraft and lifecycle costs) was found lower than its rival’s.
With this, contract cost negotiations will start with Dassault. The declaration of the lowest bidder marks the decisive stage in the acquisition process, which started in 2007. The original estimated cost of the deal was around Rs 42,000 crores ($10.4 billion) in 2007, but there are indications this could escalate to between Rs 80,000 crores to Rs 90,000 crores (about $16-18 billion). But no official figures are available as cost negotiations are yet to begin.
India will now compare its “benchmark price” at current costs to the cost at which the French are prepared to sell, and will try to scale down the French bid. Only if these talks with Dassault fail will negotiations start with “L2” (second-lowest bidder) — EADS Eurofighter.
The Rafale, currently the main French Air Force combat aircraft, is known as an “omnirole” fighter capable of multi-role functions like air-to-ground precision strikes, nuclear strikes, anti-ship attacks, reconnaissance, close air support and air defence. The aircraft is equipped with smart sensors and rocket-boosted air-to-ground precision guided weapons with laser guidance systems, long-range missiles, anti-ship missiles and air-to-air missiles. Dassault says the Rafale was used with great success in French combat ops in Afghanistan and Libya.
Of the 126 aircraft that will be acquired, 18 will come in “flyaway” condition in three years, while the remaining 108 will be built by state-owned Hindustan Aeronautics Ltd in the next seven years with technology transfers. The contract is expected to be signed in the next five months.