Dassault Aviation, maker of Rafale fighter jet which is in exclusive negotiations with the ministry of defence for close to three years now for the $ 20-billion Medium Multi-Role Combat Aircraft (MMRCA) tender, may have to abandon the plan over lingering issues.
This is despite the fact that bagging the MMRCA tender, which envisages purchase of 126 aircraft with an option for buying 63 more, is critical for Dassault. Contrary to initial expectations of a quick contract signature, Dassault-MoD negotiations have dragged for over two years.
As reported by FE earlier, cost has been an issue since the start besides the company’s reluctance to transfer sophisticated technology to India and meet offsets requirements. In the last few months, questions have been raised by Dassault regarding the role of HAL in the MMRCA.
Moreover, the French company is unwilling to be held liable for the quality, timely and on-cost delivery of the 108 aircraft to be license produced at HAL. This is in breach of tender conditions and has emerged as a major threat to speedy contract conclusion.
Highly placed sources disclosed to FE that after being declared as L1, the French company was very much aware that as per the RFP it had responded to, “state-owned Hindustan Aeronautics was the designated production agency.” The French company had offered 22% work share for HAL at the initial stage of negotiations, as its response to the RFP was influenced by a planned partnership with Reliance Industries, that planned to expand into aerospace and defence in 2011.
Talking to FE, Air Marshal (retd) M Matheswaran, senior adviser to HAL’s management, said: “Guaranteeing HAL’s work is not the issue, but that the French are being “rigid” and refusing to stand behind the integrity of the design.”
Matheswaran, who was involved in drafting the original RFP for the deal, added: “Unfortunately, the French don’t want to be accountable in any way. However, the original equipment manufacturer has to stand guarantee with respect to design and integrity of design. By constantly denying to take responsibility for production of the 108 aircraft at HAL, the French are trying to get away from the OEM’s responsibility.” Also, it is about technology transfer, which the French are loath to do.