Posts Tagged ‘Dassault Rafale’

Short memories for Indian Rafale deal

October 16, 2018

The Rafale deal was done in 2012 when Manmohan Singh was still Prime Minister. The bidding process actually began in 2007. All the “side deals” would have been well structured at this time. The current Modi Government could only have taken over the “tributary mechanisms” of money flows from what was already structured by the previous government. Of course these would have been embellished a great deal.

Rahul Gandhi, it would seem, is trying desperately to obliterate the personal Bofors stain.

I wrote this in January 2012: Indian MMRCA: Dassault’s Rafale dumps its price to beat the Eurofighter

Finally the winner of the Indian MMRCA competition has been announced (or at least the L1 bidder) and it seems that the French dumped their prices for the Rafale to beat the Eurofighter by $4-5 million per aircraft. The performance of the Rafale in the Libyan adventure was also to its benefit compared to the Eurofighter Typhoon. Normally in the procurement process, the L1 bidder is called for final discussions to settle the contract and some further price negotiations can be expected. The contract will not be settled till the next fiscal year (after April 2012) and it would be very unusual for the evaluated L1 bidder not to get the contract. This contract is particularly important for Dassault since not only did the Rafale need a boost but also because they are guaranteed a market with the Indian Air Force for at least the next 15 years.


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Eurofighter tries to spoil the Indian MMRCA Rafale deal

March 24, 2012
Rafale de l'Escadron de Chasse 1/7 Provence

Rafale de l'Escadron de Chasse 1/7 Provence: Wikipedia

It is not unexpected or unusual in the award of large Indian contracts that the “losing” bidder cries “foul” and claims that the evaluation process was manipulated. From my own experience in the Power industry it is “standard practice” for a losing bidder to enlist the aid of the media, politicians and the courts in crying foul and in trying to get an award to a competitor overturned. Again, from my own experience, such tactics can often delay awards but rarely succeed. Such “spoiling” can cause much rancour with the client and – more often than not – is counter-productive. In marketing and sales for large projects in India, “spoiling” a competitor’s award is rather easy but only delays matters and is not really worthwhile. The real sales skill lies in getting to be the lowest bidder and then beating off the “spoilers”.

Dassault’s Rafale was announced as being the lowest bidder beating the Eurofighter for the $20billion Indian MMRCA contract at the end of January. Now comes the cry of “possible foul”  from a Member of the Upper House of Parliament (Rajya Sabha) who is also a member of Parliament’s standing Defence Committee. (The MP, MV Mysura Reddy,  is a former member of the Congress Party who left to join the regional Telegu Desam party. He has lost 3 elections for Parliament but has been appointed by his party to the Upper House).

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Following Indian MMRCA success, Dassaut’s Rafale also tipped for Brazil

February 13, 2012
Dassault’s success in being selected as the lowest bidder for the Indian MMRCA competition with the Rafale aircraft seems to be having a significant impact in other deals. The Rafale is now the most likely winner of the Brazilian contract for 36 aircraft. The aggressive pricing by Dassault and the active (and very effective) lobbying by the French government is a potent combination. The Rafale has not yet been sold outside France and the Indian and Brazilian deals are critical for the future export life of the Rafale.
In Brazil the Rafale is competing against Boeing’s F-18 and Saab’s Gripen. Though Saab is also desperately looking for export orders for the Gripen, it is unlikely that it can afford to drop its prices by the levels that Dassault obviously can. Boeing on the other hand is not so dependent on the Brazilian orders and is unlikely to drop its price by very much – especially since they will not wish to disturb the already very high price levels they enjoy for exports to the Middle-East. And that probably leaves the Rafale sitting very pretty.

Svenska Dagbladet reports (freely translated):

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Indian MMRCA: Rafale deal is $5 billion cheaper than the Eurofighter

February 10, 2012

Though David Cameron and the other leaders of the four country consortium which manufactures the Eurofighter Typhoon (UK, Germany, Spain and Italy) have all been somewhat whiny about the selection of the French (Dassault) Rafale for the 126 aircraft Indian MMRCA deal it seems highly unlikely that the Typhoon can make a comeback.

The life-time cost of the contract is evaluated at about $20 billion with an initial contract value of about $10-12 billion. The ToI reports that the Rafale deal was evaluated as being $5 billion (about 25%) cheaper than the Eurofighter. Though the evaluation probably considers a total of about 189 aircraft (126 +63 in phase 2) it still represents a life-cycle cost difference of some $26 million per aircraft  and not just the $4-5 million lower initial acquisition cost per aircraft (bid-price). It seems almost impossible for the Eurofighter to match this difference. The first 18 aircraft have to be delivered in “fly-away” condition from mid-2015 onwards. The next 108 aircraft will have to be delivered from HAL in India at about 6 per year initially going up to 20 per year.

Exclusive negotiations between Dassault and the Indian Ministry of Defence start next week.

Times of India:

It was the “substantially higher cost” of acquiring and operating the Eurofighter Typhoon that led to its ejection from the almost $20 billion MMRCA (medium multi-role combat aircraft) project to supply 126 fighters to IAF. 

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Indian MMRCA: Dassault’s Rafale dumps its price to beat the Eurofighter

January 31, 2012

Finally the winner of the Indian MMRCA competition has been announced (or at least the L1 bidder) and it seems that the French dumped their prices for the Rafale to beat the Eurofighter by $4-5 million per aircraft. The performance of the Rafale in the Libyan adventure was also to its benefit compared to the Eurofighter Typhoon. Normally in the procurement process, the L1 bidder is called for final discussions to settle the contract and some further price negotiations can be expected. The contract will not be settled till the next fiscal year (after April 2012) and it would be very unusual for the evaluated L1 bidder not to get the contract. This contract is particularly important for Dassault since not only did the Rafale need a boost but also because they are guaranteed a market with the Indian Air Force for at least the next 15 years.

Economic Times:

French company Dassault Rafale on Tuesday bagged India’s biggest-ever contract for supplying 126 combat aircraft for the air force, edging out European competitor EADS in the multi-billion dollar deal. 

The French firm was declared as the lowest bidder, according to which it will get the contract under India’s defence procurement procedure, sources said.  “The French firm Dassault Rafale has emerged as the L-1 (lowest bidder) and cheaper than its european rival EADS (maker of Eurofighter) in the tender and will be offered to supply the aircraft to the IAF,” the source said. 

They said the representatives of Dassault here were informed about the development in the morning and further negotiations on price will be held with them in the next 10-15 days. 

The contract will be signed only in the next fiscal. According to the Request for Proposal (RFP), the winner of the contract will have to supply 18 of the 126 aircraft to the IAF in 36 months from its facilities and the remaining would be produced at HAL facilities in Bangalore. 

Six companies including American F-16 and F-18, Russian MiG 35, Swedish Saab Gripen alongwith Eurofighter and Dassault Rafale were in the race in the beginning. But in April last year, the Defence Ministry shortlisted Dassault and EADS, evicting the American, Russian and Swedish bids. 

The process was started with the issuing of a global tender in 2007 after which all the six contenders were subjected to extensive field evaluation trails by the Indian Air Force at several locations across the globe. 

The Defence Ministry had earlier cleared the way for opening commercial bids of Rafale and Eurofighter Typhoon by approving their offset proposals.

famille Rafale

Indian MMRCA decision imminent as political support peaks for the Eurofighter Typhoon

December 28, 2011

The long running saga for the purchase of 126 combat aircraft for the Indian Air Force (worth in excess of 11 Billion $) is coming to a head between the 2 short listed – the Eurofighter Typhoon (UK, Germany, Italy and Spain) and the French Rafale. In April, Boeing’s F/A-18 Super Hornet, Lockheed Martin’s F-16IN Super Viper, the MiG Corporation’s MiG-35 and Saab’s Gripen NG were eliminated after the technical evaluation leaving Dassault’s Rafale to compete with the Eurofighter built by a 4-country consortium. The winner is likely to sell a further 80 – 100 aircraft in a second phase. One requirement that the suppliers will be judged on is the extent to which technology transfer will take place and the extent to which Indian industry can become sub-suppliers. Rumours in the Defence Ministry are indicating a decision in the first half of January 2012.

The political support for the Eurofighter has reached its peak with a joint letter written by the leaders of the four supplier countries to the Indian Government welcoming India as a “fifth partner country”.

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Indian MMRCA contract: Financial bids from Eurofighter and Rafale due on 4th November

October 31, 2011

The protracted process for the $10 billion (which will become $15 billion) contract for the supply of 126 fighter aircraft (MMRCA – Medium Multi-Role Combat Aircraft) to the Indian Air Force is coming into its final lap. Eurofighter Typhoon and Dassault’s Rafale made the short list and have been asked to submit their “best and final offers”. The financial bids will be opened on November 4th. The contract is expected to contain an option for an additional 63 aircraft.

MSN India reports:

With the decision of the defence ministry to open the financial bids early next month of the two finalists in the IAF?s medium multi role combat aircraft (MMRCA) tender, IAF can now hope to acquire the first lot of 18 aircraft by end-2014 or mid-2015, depending on when the contract is signed.

The ministry completed the formalities last week and sent letters Monday to representatives of Eurofighter and Rafale for opening the bids on the afternoon of Friday, November 4. The representatives would authenticate the tender packets as their own and as submitted by them earlier, in the presence of senior ministry officials, and then they would be opened by one of the designated officers. …

Although the ministry’s initial assessment was that the deal could be worth around $10 billion, the Rafale and Eurofighter should cost somewhere around $15 billion. … it was only in 2007 that a Request for Proposals (RFP), or tender, was issued to these two European companies as well as US Lockheed Martin for the F-16 Super Viper and Boeing for F/A-18 Super Hornet, Swedish Saab for the Gripen and Russia’s Rosoboronexport for Mig 29M2, later designated Mig 35.

Eurofighter Typhoon for Indian contract? image: defpro.org

The bids are valid till the end of December so the final contract could be awarded by then. But this  is India and  Dassault for Rafale and the Cassidian European consortium  for the Eurofighter could always be asked to extend the validity or to renew their bids.

But it does seem that the long tendering and contracting process which began in 2007 is finally coming to an end.

My guess is that the Eurofighter Typhoon will be chosen.


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