Posted on 02/13/2011 11:03:30 PM PST by sukhoi-30mki
Fighter deal bigger: 126 will rise to 260
February 13th, 2011
DC Correspondent
Feb. 12: It is already known as the world’s biggest defence import deal in a long time. Now, it transpires, it is even bigger than that. The Indian Air Force is in the market to buy 126 Medium Multi-role Combat Aircraft (MMRCA) from one of six foreign vendors bidding for the contract.
Over time, however, the IAF plans to buy 260 of them, Deccan Chronicle has learnt. That means, what has been talked about as a $10-12 billion deal will eventually fetch the winner of the contract close to $25 billion.
While the IAF floated a request for proposal (RFP) for only 126 fighters, sources privy to the armed forces’ Long-Term Integrated Perspective Plan said that that document puts the number of medium fighter jets the IAF needs at is 260. Ministry of defence officials, however, refused to confirm that there was any plan beyond the current RFP.
America’s Lockheed Martin (F-16) and Boeing (F/A-18), the 4-nation Eurofighter consortium (Typhoon), France’s Dassault (Rafale), Sweden's SAAB (Gripen) and Russia’s Mikoyan-Gureyvich (MiG-35) are locked in a high-intensity public relations as well as behind-the-scenes war to win the contract.
Air Chief P.V. Naik had on Thursday said that the Contract Negotiations Committee would achieve key milestones towards evaluating the packages offered by the various vendors in a week or two and that the contract would be ready for signing by September, except if "dissatisfied vendors put a spoke in the wheel".
That, sources said, looked almost inevitable given the size of the contract and what it could do to the fortunes of the winner. It could potentially keep alive assembly lines for some fighters from the 1970s/1980s vintage for another 30 years, ensuring that some 25,000 to 30,000 people would find employment in what are currently stricken economies in the US and Europe.
The sources also said that the eventual number of the frontline air superiority Sukhoi-30 MKIs from Russia in the IAF's fleet would also go up to 280.
The IAF would need these higher numbers of combat jets of different classes considering that it has to plan for threats coming from two fronts.
Even more than the jump from 126 to 200 originally projected. Interesting.
The folks at Boeing say its may go to 400. Of course, you can’t expect them to play down the numbers!!
Also, this makes a split deal even more likely.(?) Far easier to viably split 260 than 126, with the greater efficacy coming with increased costs. Could easily see a hundred Eurofighters with 160 SuperBugs.
That would be one nightmare of a split!! Costs would zoom up too, than say choosing a Gripen or F-16 in place of one of those twins.
The rise of Pakistan to its new status as a major arms purchaser from the United States is particularly noteworthy given the difficulties the United States has had with Pakistan since the 1970s over its successful effort to produce nuclear weapons. The total value of Pakistan’s 2006 arms purchases from the United States nearly matches the total value of all Foreign Military Sales (FMS) program purchases by Pakistan from the United States for the entire period from FY1950-FY2001 (more than $3.6 billion in current dollars).
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JOBS.
Hence, the Indians have a lot of good aircraft with critical military functionality (e.g. with a lot of India's fighters due to retirein the mid future, plus the need to maintain squadron strength) and technological growth/increase, that also come with tremendous political considerations. Thus, I wonder whether I would use that opportunity (the financial ability of India to increase the order size) to simply go ahead and add the F-16 and/or Gripen (the Viper's chances must be really low for obvious reasons, and as for the Gripen I wonder how disimilar it would be from an evolved LCA Mk2 ...obviously the Tejas may not be as good, but it is in the same niche). I do not think they would pick the Viper over the SuperHornet (for a number of reasons ranging from greater growth potential and ongoing investment, the fact it will be in use with the USN/Aussies for quite some time, all the way to more visceral reasons like Pakistani Vipers), thus for the American option it will definitely be the SuperHornet. For the other choice all one is left with is the Eurofighter and the Rafale, and either of them is expensive. I just do not see a choice of a SuperHornet with a F-16, Superhornet with Gripen (which by the way would make the most sense from a cost perspective considering the engines, as well as from an immediate capability perspective, and even from a political point of view - with the aegis of the US for the SuperBug, and independence with the Gripen), or Tiffy (or Rafale) with F-16 or Tiffy (or Rafale) with F-16. Thus, unless they go for a SuperHornet/Gripen combo, it will be two twins with one being American and the other European.
There’s one form of pressure that the media isn’t paying attention to and that involves domestic political calculations.
If one of the non-American contenders launched a protest with the Comptroller and Auditor General in the event of a US aircraft being chosen (something the IAF is wary about in general), then all hell will break loose. The current Indian government is beset with allegations of malpractices as it is and the last thing it needs is a a scandal alleging a sell out to Uncle Sam since issues of technology transfer and monitoring remain unresolved. Of course that’s all hypothetical at the moment but the point is American political pressure can and will be offset by domestic compulsions to a degree.
They could chose a combination of both Grippens and Hornets being that they share the same engine. Would probably be more cost effective. Could go with Rafaels and Hornets too but I don’t see it.
Also, isn't this like a typical tender whereby if 4 competitors pass the Technical Bid then the winner will be the cheapest Financial Bid? I experienced what that means in my Fund Management days, where you can have a FAR FAR superior product/performance/services, but if the other guy just manages to squeek through the Technical Bid (e.g. say the performance metric is to match some index plus 50 basis points, and I have beaten the index by 1000 bps and the other guy has just managed to ease the aforementioned 50bps above base ....but his services are much cheaper than mine, he wins I lose). If that is the case here, and I am not sure if it is otherwise why did the Indians open things up to the heavy (and more expensive) twins, then that means the guaranteed winner would be a mix of Gripens and Vipers. I have not managed to grasp what the Technical Bid > Financial Bid process is for such a diverse set of competitors. On one side you have the Eurofighter Typhoon, arguably the most advanced operational plane in the World after the F-22 Raptor (as well as the second most expensive), and on the other end you have the F-16 that is near/at the end of its production line and doesn't cost as much. If it is a normal Techinical>Financial process, then if the F-16 passes the technical bid (and just manages to squeek through, as compared to, say, the Typhoon thoroughly mastering all the various areas assessed), then what that means is the F-16 automatically wins if it is the cheapest.
I think whatever winner is chosen there will be some hell to pay. This will not be easy.
I think the stage after the technical evaluations-the offsets and commercial offers, matters as much if not more than the price. So the products from EADS and Boeing would be more expensive than the Mig or F-16 or Gripen, but the makers of the latter three products are pretty much totally incapable of matching the big two regarding the scope of their offset proposals and options for transfer of technology.
So in theory, the products from Boeing and EADS would likely be more cost-effective and industrially beneficial to India though their per unit costs would be higher. If we take this logic further, it also diminishes the utility of a split-purchase to a degree. What can Lockheed Martin or SAAB give technology-wise that Boeing or EADS can’t?? You reduce your bargaining power in a sense if u award multiple contracts.
Can it replicate this in Leh and Arunachal/Sikkim, with full loads ? If so, a few squadrons with small airstrips in the mountains may seem a very good idea.
The Gripen-NG supposedly passed the high-altitude tests held at Leh. I don’t think any aircraft in the competition could take off wih a full load in the Himalayas; the demands on the engine are too high even with a full-size runway. Which is why four of the aircraft failed initial trials at Leh.
Much thanks. Quite interesting.
A badly kept secret now out in the open. I think they were always going to end up buying more planes, hence the intense lobbying for this deal by all the players. It seems India has a habit of making initial purchases with followups later, this will be no different.
That is true. The armed forces usually exercise the option of followup orders in pretty much every contract. There is a reason behind it. Things move very slowly in the Govt of India especially in the Ministry of Defense. For example, the go-ahead from Cabinet for this deal was given in 2002-03. Yet, the contract is only likely to be signed in 2013-14 if we are lucky. So, the armed forces just go with the followup orders as the process for that is much faster and they can get their resources faster.
Why would they want to invest in obsolete products such as the Typhoon, as the Grippen, as the Rafale, as America’s teen series and as Russia’s 4th Generation MiG’s and Su’s when they already have a high stake in the PAK-FA/T-50?
The PAK-FA is at least 12-15 years away from anything resembling full-scale service. And that is assuming that there are no development hiccups, political-technical issues with Russia etc. The aircraft you mentioned are hardly obsolete. A Eurofighter/Rafale/Super hornet equipped with new radars, datalinks and Meteor missiles are not sitting ducks agains the Russian PAK-FA or Chinese J-20.
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