Commercial bids for fighter plane contract to be opened next week

Written by Huma Siddiqui | New Delhi | Updated: May 28 2011, 05:37am hrs
Commercial bids for Indias $10.5-billion order for 126 fighter planes are expected to be opened next week, highly placed sourced told FE. There are two finalists in the race for the medium multi-role combat aircraft (MMRCA) tender, often described as the mother of all defence deals: Eurofighter Typhoon from Europes EADS-led consortium and Rafale from Dassault Aviation of France.

The opening of the commercial bids would lift the suspense on the lowest bidder, paving the way for commercial negotiations. Defence officials from France and Germany are currently touring India to promote their offerings, leaving no stone unturned to swing the deal in their favour.

Indian Air Force (IAF) officials are believed to be rooting for the Rafale, which could come across as the lowest bidder owing to its low lifecycle cost. However, Eurofighters offer to set up a production line in India could give it some leverage.

In fact, the outcome of several multi-billion arms deals dominated talks between French defence minister Gerard Longuet and his Indian counterpart, AK Antony, during the formers two-day visit to New Delhi which started on Friday.

We have one single speaking partner (Dassault) instead of four partners (Italy, Germany, Spain and UK), Longuet said, referring to the consortium of EADS, Alenia Aeronautica and BAE Systems working through holding company Eurofighter GmbH that builds the Eurofighter Typhoon.

The MMRCA tender is considered the single biggest military aviation contract in recent times, and had some of the worlds largest defence vendors vying for it, including Lockheed Martin and Boeing of the US and Swedens Saab and United Aircraft Corporation of Russia.

Briefing media persons ahead of German chancellor Angela Merkels visit next week, German ambassador Thomas Matussek said: The Typhoon represents the most advanced and cost-efficient machines. During her talks with Prime Minister Manmohan Singh, the chancellor will express satisfaction about the transparency and the orderly manner in which the whole process of selection took place.

Outlining details of the industrial partnership offer to integrate India as a partner in the Eurofighter programme, Bernhard Gerwert, CEO of Cassidian Air Systems and chairman of the supervisory board of Eurofighter GmbH, during his recent India visit told FE: Our ultimate objective is to win India as a key partner co-developing and co-producing future upgrades and enhancements, new sub-systems, software, etc.

An acquisition of the Eurofighter Typhoon will create more than 20,000 high-skilled jobs in India and support the development of a self-reliant indigenous defence industry. India would gain access to a wide array of technologies from Europe's leading aerospace and defence companies avoiding over-dependence on a single source, said company officials.

Enzo Casolini, CEO of Eurofighter GmbH, emphasised: We are committed to transfer of technology because we want to enable India to manufacture this advanced combat aircraft itself and we want to see the country emerge as a truly global development partner.

In fact, Cassidian, the EADS division for security and defence, is systematically implementing its industrialisation strategy. The latest step was the opening of the first defence-oriented engineering centre owned by a foreign company in India, as reported by FE earlier.

Gerwert underlined: This proves that we are ready to transfer high value defence R&D to India. Cassidian plans to increase the current number of 60 employees in its defence engineering centre to more than 200 by the end of 2012, with many of them working on Eurofighter-related tasks.