• Sunday, September 22, 2019

No softlanding in sight for $20-bn Rafale deal

Discussion in 'Indian Defence Forum' started by TimeTraveller, Oct 27, 2014.

  1. TimeTraveller

    TimeTraveller FULL MEMBER

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    rafale-best1.jpg


    The wait for the $20-billion 126 medium multi-role combat aircraft for
    the Indian Air Force is going to get longer due to budgetary constraints
    and the delay in concluding the negotiations with the French company
    Dassault. Though the talks with Dassault have been going on for two
    years now, IAF chief Arup Raha has admitted that it would take another
    three to four years before the first squadron of Rafale aircraft could
    be raised. This effectively means a timeframe of 2015-16 if there is no
    further delay in signing the agreement.

    Speaking to FE on conditions of anonymity, an officer who has been part
    of the negotiating team, said, “While the negotiations with the French
    company are on track, there are several other agencies involved in this
    project and it will be another few months before the negotiations are
    complete. Which means this deal will not be done this fiscal ended March
    2015.”

    Also, sources have indicated that there could be budgetary issues too as
    the Modi government is more focused on social programmes. Hence paying
    the first instalment of the deal could be a problem too. When the
    approval for procuring the 126 aircraft was given by the previous NDA
    regime in 2000, the cost pegged was at around $10 billion, since then
    the prices have gone up.

    This fiscal’s R2.24-lakh-crore interim defence budget, especially the
    R89,588-crore capital expenditure for new assets, has not factored in
    the 15% down payment that needs to be immediately made if the MMRCA deal
    is inked.
    ‘’After one-and-a-half decade of that approval, the cost of the combat
    machines has gone up, including inflation and the rupee-euro conversion
    rates. While the government has benchmarked the likely price of the
    machines and the cost increase factored in, the necessary approvals for
    budgetary provisions for the planes would need a fresh sanction,”
    explained a senior IAF officer.

    It is uncertain if the contract would be signed within the current
    fiscal even if negotiations were completed by late next month and all
    issues relating to technology transfer from Dassault were taken care off
    and papers readied by December.

    It has been more than two years, since Rafale beat its closest
    competitor Eurofighter Typhoon from the consortium — then called EADS
    Cassidian. When French foreign minister Laurent Fabius was in Delhi
    recently, the Indian response to his efforts to push the deal through
    was lukewarm, say officials.

    One of the major reasons why the new government is very cautious about
    the Dassault aircraft is perhaps its life-cycle cost, which is the
    expenditure which would be incurred by India on operations and
    maintenance of the plane for 40 years after induction, along with the
    price of the planes.

    Under the tender provisions, Dassault Aviation will manufacture the
    first 18 of the Rafale for the IAF while Hindustan Aeronautics will
    build the remaining 108 in India. The talks on life-cycle costs have
    taken so long as this is the first-ever Indian defence deal in which
    these costs are being worked out. It is now mandatory to calculate this
    expenditure before the deal is signed.

    Step by step
    * The Contract Negotiation Committee will prepare the report of the
    negotiations with Dassault
    * Since the value is high, the matter will be brought before the Cabinet
    Committee on Security
    * This will require inter-ministerial consultations, in this case it is
    the finance ministry
    * The ministry could raise questions that need to be answered
    * The CCS will then send the Cabinet note to the PMO and as per the
    procedure, there will be a 15-day wait for response.

    Source : No softlanding in sight for $20-bn Rafale deal | idrw.org
     
  2. SpArK

    SpArK PDF THINK TANK: ANALYST

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    If we dont have money look for other options rather than wasting time and putting country into vulnerability.
     
  3. Skull and Bones

    Skull and Bones ELITE MEMBER

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    Bas karo nautanki kamino. :mad:
     
  4. Chinese-Dragon

    Chinese-Dragon PDF THINK TANK: ANALYST

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    More budget problems?
     
  5. SpArK

    SpArK PDF THINK TANK: ANALYST

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    Thats what the article is saying.
     
  6. RKO

    RKO FULL MEMBER

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    fck you kongress..you should have signed it when price was 10bil $..... a$$ hole Antony!!!! fck you all!!!!
     
  7. anant_s

    anant_s SENIOR MEMBER

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    Can somebody tell, how much money do we need to pay upfront for the deal? Media reports have been suggesting these 10 and then 20 billion USD figures for quite long. However such deals and production schedules spread over many years of delivery do work on pro-rata payment basis (essentially you pay for something, when u have it). So even if this deal is say 25 Billion USD, i don't think we have to pay more than 5-10% amount just to start production rest will follow.
    In this light budget constraints might not be the actual reason for delay, it more looks like technical issues especially wrt ToT and domestic production issues.
     
  8. Sardar Singh

    Sardar Singh FULL MEMBER

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    Bhai jaldi se deal finalise kerdo nahi toh kahi $20Bilion key $30Billion na ho jaye.:hitwall:
     
  9. SrNair

    SrNair ELITE MEMBER

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    It seems we dont have any other options.Dassault will go at any level for secure this deal.Otherwise their Rafale will shut down in once and for all with huge loss.
    IAF not gonna compromise in their stance.Because another MMRCA competition is ridiculous and impossible.
    We onlyyhave two options if we dont sign this deal.
    One is waiting for an indigenous one .But that is not gonna happen.LCA is a light weight and our only option is AMCA which is still in conceptual stage.So outcome will be a drastical reduction in our squadron level.

    Another option is FGFA .I think that is possibly a good option .Reinvest entire sources for the early development of FGFA.But another issue in ther is that FGFA is heavy class not a midterm type like Rafale.

    Diplomatic and political issues is also another fact.
    Lets see their response.
     
  10. Tshering22

    Tshering22 ELITE MEMBER

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    It doesn't seem to be like that.

    If the French were that desperate, they would not have bickered about the pre-agreed terms and conditions and the cost escalations. We are going to buy 126 + 74 optional jets from them which could be a sure shot deal. That means we are investing a lot in establishing new infrastructure, training, spares support and many thing else and for Dassault this would have been a saving grace.

    But if this is the way it is going, I see GOI agree to Germany's new lower price option with full ToT for EFT.

    If that happens, it is bye bye for Dassault's line, unless Arab countries bail them out.

    EFT from Germany is the L2 category. Which means that if Dassault doesn't agree, the contract goes to Merkel. Recently, Germany has offered to lower the Typhoon price below Rafale, as they have the volumes due to pre-existing sales. I don't care whether it is either of them, I just want that our pilots should be safe and that PLAAF doesn't catch us with our pants down.

    Mind you, the real threat is in the eastern belt of Himalayas and we easterners and northeasterners have been telling this for years.

    PAKFA will fully be combat ready in nothing less than 2025, for any meaningful numbers. 1 squadron of PAKFA will do nothing by 2018-19. To create a force multiplier, we need at least 4-5 squadrons combat ready, with a 85% combat availability.

    Tejas Mk.1 and Mk.2 need to be manufactured at war footing to make any meaningful numbers.

    People think it is an obsolete jet but they don't know that the tech is still 4.5 gen and is a very capable fighter for the existing threats that we face. Only problem is the politics behind getting it out.

    I think that Modi has to force the FOC of Tejas himself if it has to come out. And we should make nothing less than 20 units a year from day one in order to save IAF strength.
     
  11. sancho

    sancho PDF THINK TANK: ANALYST

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    MRCA competition till 2007 - Mirage 2000-5, Gripen C/D, F16B52, Mig 29SMT - ESTIMATED cost between $6 and $10 billion

    M-MRCA competition since 2007 - Rafale, Gripen NG, F16B60, Mig 35, F18SH, EF - ESTIMATED between $12 and 20 billion depending on fighter
     
    Last edited: Oct 27, 2014
  12. Storm Force

    Storm Force BANNED

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    With weapons and cost of tot not less. Than 25 billion dollars.

    This excludes lifecycle costs

    Quote me if you want when it happens.

    We spend over 4 billion on arming the. Mmrca but the level of technology will leave Pakistan in a tailspin.

    They will never recover the gap

    I'm the same guy that opened s thread 18 months ago suggesting mmrca was in danger of cancellation due to cost and got shot down by some people
     
  13. RKO

    RKO FULL MEMBER

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    Fck NDA then and whoever responsible...fck Modi if he dnt sign it soon!!
     
  14. SpArK

    SpArK PDF THINK TANK: ANALYST

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    Who is going to pay 25 billion for fighters only which is bigger than our neighbors total budget?
     
  15. PARIKRAMA

    PARIKRAMA PDF THINK TANK: ANALYST

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    15% on contract signing and rest on tranches.
    Source FE
    No softlanding in sight for $20-bn Rafale deal - Financial Express

    This fiscal’s R2.24-lakh-crore interim defence budget, especially the R89,588-crore capital expenditure for new assets, has not factored in the 15% down payment that needs to be immediately made if the MMRCA deal is inked.

    In essence since the payments are not at one go. $ 15-20 Bn over 10 years is not a big sum if we get the right pakaged deal and TOT