On Tuesday India floated its biggest ever global defence tender for purchase of 126 multi-role combat aircraft in a deal potentially valued at $10 billion
India on Tuesday floated its biggest ever global defence tender for purchase of 126 multi-role combat aircraft (MRCA), in a deal which could reach a mammoth $10 billion (Rs42,000 crore).
An official announcement on 28 August said that the Request For Proposals (RFP) for the fighters had been issued to six main bidders. The main contenders, to whom the RFP has been issued are:
- Boeing F/A-18E/F Super Hornet
- Dassault Rafale
- Eurofighter Typhoon
- Lockheed Martin F-16
- RSK MiG-35
- Saab Gripen
At 211 pages long, the RFP document outlines India's requirements in areas including technology transfer, licenced manufacturing and through-life support arrangements. The Indian defence ministry has not released the delivery schedules. The RFP is the culmination of a process that began in 2001, when the IAF first sent out its request for information (RFI) for 126 jets.
The $10 billion contest has been in the planning phase for years now, and India's defence acquisition council (DAC) finally approved the MRCA RFP for release on 29 June. Several previous RFP release targets had passed with nothing happening, so Tuesday's RFP release caught manufacturers by surprise.
Bidders are to submit technical responses by 3 March 2008, and New Delhi will issue a shortlist after conducting extensive technical and field evaluations of the candidate aircraft.
The aircraft are envisaged to have a lifecycle of 40 years from the time of delivery.
The RFP says 18 fighters will be bought off the shelf, and the remaining 108 manufactured under technology transfer in India. India holds an option of purchasing another 64 fighters under the same terms and conditions. The six companies contending will have to sign a confidentiality clause against revealing the contents of the RFP to a third party.
The first batch of 18, to be supplied in a flyaway condition, has to be inducted in the IAF by 2012. The remaining 108 are to be manufactured in partnership with India's Hindustan Aeronautics (HAL) as part of a 50-per cent offset deal linked to the purchase.
Under the offsets clause, whoever wins the tender will have to reinvest 50 per cent of the value of the contract in India's defence manufacturing sector, by awarding contracts for sub-assemblies and components to Indian companies.
The offsets clause, first introduced in the 'defence procurement procedure-2006' (DPP-2006), mandates that 30 per cent of the cost of military purchases exceeding Rs3 billion has to be reinvested in the country. The DAC had decided that the offsets in this case would be 50 per cent.
The RFP also contains a selection model that involves a stringent evaluation process detailed in DPP-2006. First, a professional team conducts a technical evaluation of the proposals received to check for compliance with the IAF's operational requirements and other RFP conditions.