Direct purchase of 36 fighters will alter original Rafale deal

TNN

New Delhi, 11 Apr 2015: India will now negotiate direct purchase of 36 Rafale jets from France through a government-to-government deal worth around $4 billion, without any "Make in India" or technology transfer component, to meet IAF’s urgent "critical operational necessity" for new fighters.

 

After Modi held extensive talks with French President Francois Hollande in Paris on Friday, it was announced that fresh commercial negotiations will now be held for the direct acquisition of two Rafale squadrons (each has 18 jets) in "flyaway" condition.

 

"France has agreed to fast-track the deliveries and give us better terms for the outright purchase and longer maintenance support for the jets. Finding the money for this contract should not be a problem since it will have to be paid in instalments linked to deliveries," said a source.

 

The "politico-strategic" decision of negotiating the direct purchase of 36 Rafale jets that was taken by Prime Minister Narendra Modi just before he left for Paris on Thursday afternoon, will lead to a "modification" of the original deadlocked $20 billion MMRCA (medium multi-role combat aircraft) project for 126 fighters, said sources.

 

As reported by TOI earlier, final negotiations for the MMRCA project — which envisaged direct acquisition of the first 18 jets from France with the remaining 108 being built in India by Hindustan Aeronautics after transfer of technology — have been stalled for over a year now.France, incidentally, has failed to find international customers for its Rafale fighters, except for Egypt which agreed to buy 24 of them in February.

 

The insurmountable hurdle in the MMRCA negotiations was Dassault’s substantial hike in pricing for the 108 fighters to be produced by HAL as well as its refusal to take "full responsibility" for them. India, in turn, was clear it could not accept a hike in the L-1 (lowest bidder) price provided by Dassault since it had led Rafale to defeat the Eurofighter Typhoon in commercial evaluation in January 2012.

 

 

Down to just 34 fighter squadrons when at least 44 are required to be comfortable against China and Pakistan, IAF can now hope to get 36 new fighters soon to arrest its fast-eroding air combat power. The defence procurement procedure allows such acquisitions on a single-vendor basis due to "strategic considerations", both to achieve major diplomatic, political and economic benefits" as well as meet critical operational military necessity.

 

India, for instance, has inked deals worth over $6 billion with the US for 12 C-130J Super Hercules and 10 C-17 Globemaster-III aircraft on a direct government-to-government basis without any open tender or competition.

 

Concurrently, as reported earlier by TOI, India is trying to fast-track the stealth fifth-generation fighter aircraft project with Russia. It has asked for the FGFA deliveries to begin 36 months after the contract is inked, instead of the 94 months envisaged earlier.

 

Prime Minister Narendra Modi (2nd from left) and French president Francois Hollande (3rd from right) during their meeting at the Elysee Palace in Paris, on April 10, 2015. 

 

Swamy warns of legal action over jets

 

BJP member Subramanian Swamy on Friday threatened to take legal recourse if the government went ahead with the Rafale deal with France, saying there were shortcomings in the fighter.

 

Swamy, national executive member of BJP, requested PM Narendra Modi not to go ahead with the Rafale deal, which was negotiated by the previous UPA government, and said the performance of the French jet "turned out to be worst of all the aircraft" in Libya and Egypt. "If the PM decides to go ahead with the deal, I will have o option but to approach the court to get it set aside," he said.