Dassault faces several hurdles before finalizing Indian fighter contract
Such is India's idiosyncratic procurement system that, in the run-up to the award of the $12 billion Medium Multirole Combat Aircraft program, the joke was that the only thing worse than losing would be winning. For , that reality is not that far off.
After itsoffer beat out the in January as the low-cost bidder for the MMRCA program, there has been much talk about the fate of the project, but very little action. Talks have been stuck since late February, with departmental inquiries into allegations that the final selection process was manipulated to favor Rafale.
Following weeks of uncertainty, Defense Minister A.K. Antony revealed last week that the program would move forward only after all inquiries were made and the ministry was satisfied that the selection process had not been corrupted. But that may not happen anytime soon.
“There are at least seven to eight more levels of scrutiny and process before the MMRCA contract can be signed,” Antony says. “The contract has to be vetted at multiple levels, including the finance ministry and the cabinet committee on security. Right now an inquiry is on. Only after we receive the inquiry report, study it and are satisfied that all processes have been followed unfailingly will the procurement effort move to the next level.”
Less than a month after the Rafale got the nod, the defense minister received a letter from M. V. Mysura Reddy, a member of the Indian parliament's standing committee on defense, asking for an inquiry into the selection process.
Allegations of favoritism are not new in Indian defense contracting, and the MP's letter could be the first of many twists in a journey that hardly suffers from a lack of drama and intrigue. Initially, officials indicated that the favoritism issue might only receive a cursory glance to satisfy the legislator's concerns, but the process may now be more extensive.
Formally, negotiations between the Indian contract committee and Dassault have begun, but in reality the two parties have not met even once as a result of the complaint, according to officials close to the proceedings. The ministry has refused to divulge the nature of its inquiries, although in March it acknowledged that internal questions raised about the Rafale's life-cycle cost had been looked at but dismissed.
A Dassault official says: “We are waiting to see if we can help with any information. We've worked with theand [defense ministry] for years, and are confident that we have provided all the information necessary and are fully compliant with the selection process. The Rafale was selected because it was the better aircraft backed by a better industrial package.”
The delays are beginning to worry the eventual customer, however. Indian air force sources say IAF leader Air Chief Marshal Norman Browne, who met the defense minister last week as part of a defense acquisition council (DAC) meeting, raised both the MMRCA program and delays in a final contract for a basic trainer as issues of concern.
The Indian government doused speculation that India and Brazil would jointly negotiate with Dassault for a common best price on the Rafale. “That is impossible and can never happen,” Antony declares. Brazil is due to make a type selection among the Rafale,/F and . A visit by Defense Minister Celso Amorim to India shortly after the Rafale selection gave rise to speculation that a partnership was in the offing, but that has been dismissed as merely coincidental. Furthermore, Brazilian President Dilma Rousseff is due in Washington this week, and the F-X2 fighter competition also is expected to be on the agenda.
The company most eager to see the derailment of MMRCA talks is runner-up. Officials for , the Typhoon partner in charge of the Indian campaign, have signaled that they view the contest as still in play. “As L2 [second-lowest bidder], we take our responsibility seriously,” a company official said during the recent Defexpo defense exhibition in New Delhi. “There is a larger concern that the Indian air force shouldn't suffer on any count as a result of delays. They need their aircraft as soon as possible.”
The loss in India also has given rise to renewed interest in Europe for core Eurofighter governments to press forward with a radar upgrade to add an active, electronically scanned array (AESA) to the fighter. Eurofighter industrial partners have been self-funding the development in the absence of government backing. That has created uncertainty over the fielding schedule, although industry officials insist they could meet a 2015 objective. In contrast, the first Rafale with theRBE2 production AESA is to fly this year; the first radar was recently delivered to Dassault for installation on C137, the aircraft to be used for the test campaign at the Istres flight test center in southern France. France would become the first European air force to field an AESA when the system becomes operational.
The fluid status has also led to continued political lobbying in India over the program. British Chancellor George Osborne, who visited India last week, is understood to have pushed Eurofighter's case with the government. A French delegation also called on the country's junior defense minister to see if it could gain more information about the inquiry.
Not all program activities are on ice, though. Hindustan Aeronautics, which will license-build 108 MMRCAs, has requested bids for a new design and manufacturing facility in Bengaluru for the new production line.
With Robert Wall in London.