‘Mother Of All Defence Deals’ Set For Approval

TNN | Sep 3, 2018

NEW DELHI: The government is now getting set to grant initial approval to the long-drawn acquisition project for 114 new fighter jets for over $20 billion (Rs 1.4 lakh crore), with a seventh contender flying into the competition, amidst the ongoing political dogfight between BJP and Congress over the Rs 59,000 crore contract for 36 French Rafale jets+ .

Defence ministry sources say the Defence Acquisitions Council, chaired by minister Nirmala Sitharaman, is likely to consider “acceptance of necessity (AoN)” for the 114-jet project later this month or early next month.

Under the proposed project, while the first 18 jets will come in “a flyaway condition” in three to five years after the contract is inked, the rest will thereafter be produced in India under the new “strategic partnership (SP)” policy in a joint venture between the selected foreign aviation major and its Indian partner.

Interestingly, the Russian Sukhoi-35 fighter has also joined the race for India’s “mother of all defence deals” by submitting its bid to the preliminary tender or request for information (RFI) issued by IAF in April. This comes after the first six contenders, F/A-18 and F-16 (US), Gripen-E (Sweden), MiG-35 (Russia), Eurofighter Typhoon and Rafale, sent their bids in early-July.

But it will take at least four to five years for the actual contract to be inked with the selected foreign original equipment manufacturer (OEM)-Indian partner combine. It’s estimated each bare-bone fighter will cost around $100 million, with another $100 million for the “add-ons” in terms of weapons, simulators, performance-based logistics and the like.

Though IAF would like the entire process to be fast-tracked, grappling as it is with just 31 fighter squadrons (18 jets in each) when at least 42 are needed to tackle the “collusive threat” from China and Pakistan, the still untried SP model involves quite a complex process.

While an Indian company will be selected as the “strategic partner” based upon “financial strength, technical capability and capacity/infrastructure”, the OEM will be chosen in a separate but parallel process primarily on the “range, depth and scope” of the transfer of technology it offers. “Once the AoN is granted to the 114-jet project, the seven contenders will be given three months to respond to the EoI (expression of interest) to take things forward,” said a source.

Amid all this, some MoD insiders contend it would make “far better economical and logistical sense” to simply go in for more Rafales through a government-to-government deal, after the first 36 jets arrive in the 2019-2022 timeframe, but it has become “a hot potato” in the current political scenario.

“We are already paying for the 13 India-Specific Enhancement (ISE) upgrades to the Rafale fighters, infrastructure, storage etc under the 36-jet deal inked in September 2016. The infrastructure at the Hasimara and Ambala airbases can accommodate two Rafale squadrons each,” said an official.

“If India goes in for 36 more Rafales or decides to license produce 90 of them here, just one more airbase would be required. It will reduce acquisition and induction costs. But for 114 fighters of a different kind, at least three new bases with requisite infrastructure will be needed,” he added.

Unlike other air forces in the world, the IAF already operates seven types of fighters in Sukhoi-30MKI, Mirage-2000, Jaguar, MiG-21, MiG-27, MiG-29 and Tejas, which is a huge logistical nightmare. Rafale will be the eighth one.

Courtesy: TOI