200 LCA,50% of Rafale deal value will be invested in India: Defence Minister Manohar Parrikar

[doublemaster]

Yes Parrikar is talking a lot of crap these days and the sad part is, it's not even his fault, since he only tries to publically justify the move the PM did against the needs of IAF and against of what Parrikar did since he is in office. And yes, we need to worry that the government is already spinning things to highlight lower costs and LCAs, to distract from the fact that the 36 deal alone is just a poor compromise that neither helps IAF, nor the Indian aviation industry.

This government is all about "Managing headlines", Our PM can do anything, spend any amount if it improves PR. Its just another form of corruption

 

[Agent_47]

Well, government or specifically DM MP did say about the need of Light category Single Engine fighters to be in excess of 200 or more than say 10 squadrons. But GOI/MOD never placed order of LCA (MK1 or proposed MK2) on paper amounting to 200 in numbers.. In the meantime, you see news items of few parallel incidences
1. LCA Mk1 progress slower, less indegenous content and over all delay due to troika's responsibilities (DRDO/ADA/HAL) and IAF's reluctance for MK1
2. You get to hear about Maharashtra CM Devendra F (very close to NaMo and Jaitley) courting Saab and inviting them to Maharashtra for producing Single engined light fighter Gripen under Make In India.
3. Truly MMRCA is officially dead and GOI or PM NaMo initiated a proposal for 36 Rafale Jet Off the Shelf Purchase during his visit. In the same time, DM MP said the financial considerations as well as the contratc (MMRCA) was becoming too complex for meaningful negotiations. The specific term was "vortex"
4. The latest news items said Indian Rafale deal is at same price as France Rafales but France commitment is more than 225 and there are suppose to order 5th Tranche which is now delayed to accommodate the orders of Egypt, India, Qatar
Out comes another statement by DM MP that offset is at 50% (same like MMRCA)..

So in short some confusions

• Off the shelf proposed purchase with 50% offset clause with cost same as France Air Force.. for 36 proposed fighters
• MMRCA officially dead but 50% offset clause still retained (no clarity for critical TOT is there or not)
• Is there MMRCA 2.0 now with say production in India under make In India with terms similar to MMRCA?
• 200 Light category but No LCA firm order and Side by side courting of Saab
• Conflicting position versus talk of indigenous focus but courting Foreign Manufacturers

Sorry to say under no negotiations i have heard a defence deal with off the shell purchase with 50% offset. Its no meaningful numbers in order to back up any financial viability

LCA order of 10-12 sqd is a sure thing, Think about this, IAF was a single engine majority airforce.It served them well to defend itself.But lately it started to acquire more medium/heavy aircrafts to face a two front offensive/defensive war.

Still,Every airforce need single engine AC as their work force.IAF's plan was to make LCA 1/3 of the fleet.Delays and unfaithfulness will lead to a minimum 10-12 sqd which will be 1/4 of the fleet.
Choosing another single engine aircraft will make IAF's maintenance problems worse.
Yes,50% offset looks like a BS.

 

[PARIKRAMA]

LCA order of 10-12 sqd is a sure thing, Think about this, IAF was a single engine majority airforce.It served them well to defend itself.But lately it started to acquire more medium/heavy aircrafts to face a two front offensive/defensive war.

Still,Every airforce need single engine AC as their work force.IAF's plan was to make LCA 1/3 of the fleet.Delays and unfaithfulness will lead to a minimum 10-12 sqd which will be 1/4 of the fleet.
Choosing another single engine aircraft will make IAF's maintenance problems worse.
Yes,50% offset looks like a BS.

I completely agree with you.. But committing some numbers in a bigger way is more practically feasible as it gives the project developers confidence and urgency.. Hopefully may be on FOC completion the good news of a bulk order may be revealed..

But i also would emphasize that sizeable part of using effectively a low cost single engine aircraft (LCA Mk1/2) would also depend on time bound production with productivity rate as high as 16/18/24 birds a year from the beginning of commercial production. For this only a firm commitment and a clear sizeable investment to upscale the productivity is required.

Imagine an MOU cum firm order emphasizing a minimum purchase order of 200+ LCA class of fighter jets with breakup between MK1/2/3 (evolved version) etc flexibility based on IAF's choice among LIFT/Mk1/2 etc. That kind of confidence on the program would benefit the LCA program more than at present statements which cannot be backing the financial need for escalated productivity need. That also puts lots of pressure on the program managers (HAL/ADA/DRDO) to meet stringent timelines emphasized in this contract with penalties (financial) and reputational risks and lower chances of new project funding/approval.

Sadly at present the rate of production of Sps is a bit slow and i hope by Dec 2015 or max Mar 2016 we get FOC. But then also proposed productivity rate of 4/6/8 is not very healthy to begin with in initial timeline. Perhaps i am saying as i feel order of 200 is needed to be fulfilled by say 8-10-12 years max not 16-18-20 years.

 

[Agent_47]

I completely agree with you.. But committing some numbers in a bigger way is more practically feasible as it gives the project developers confidence and urgency.. Hopefully may be on FOC completion the good news of a bulk order may be revealed..

New DM is indicating the commitment i guess.There will not be a sizable mk1 order(LIFT maybe).As it looks like Rafale is out of the table from HAL, LCA is the only way forward for them.I'm kinda optimistic about mk2 hope they don't repeat mistakes and achieve IOC by early 2019.

But i also would emphasize that sizeable part of using effectively a low cost single engine aircraft (LCA Mk1/2) would also depend on time bound production with productivity rate as high as 16/18/24 birds a year from the beginning of commercial production. For this only a firm commitment and a clear sizeable investment to upscale the productivity is required.

Imagine an MOU cum firm order emphasizing a minimum purchase order of 200+ LCA class of fighter jets with breakup between MK1/2/3 (evolved version) etc flexibility based on IAF's choice among LIFT/Mk1/2 etc. That kind of confidence on the program would benefit the LCA program more than at present statements which cannot be backing the financial need for escalated productivity need. That also puts lots of pressure on the program managers (HAL/ADA/DRDO) to meet stringent timelines emphasized in this contract with penalties (financial) and reputational risks and lower chances of new project funding/approval.

Sadly at present the rate of production of Sps is a bit slow and i hope by Dec 2015 or max Mar 2016 we get FOC. But then also proposed productivity rate of 4/6/8 is not very healthy to begin with in initial timeline. Perhaps i am saying as i feel order of 200 is needed to be fulfilled by say 8-10-12 years max not 16-18-20 years.

There will be a sizable order once MK2 is a reality. Credits to historical unfaithfulness to HAL.
LCA mk1 - 40 (fullfilled by 2018-19)
LCA mk2 / N-LCA - 160 ~200 + 50 = 210 ~ 250 (Starting from 2019, first bath in IOC standard )
To fulfill this kind of order in 7-9 years second production line is a necessity. It will be a good chance for private sector to chip in.

 

[Nityam]

This government is all about "Managing headlines", Our PM can do anything, spend any amount if it improves PR. Its just another form of corruption

Eating Mango's in the summer is also a form of corruption.

Doing PR is corruption, foreign travel is corruption, not be "secular" is corruption............. everything except taking money is "corruption'"

 

[sancho]

Why not try leaving your religion and political affiliations out of your "analysis" ?

Or do you claim to know more about the IAF needs and recommendations than the Defence Minister of India ?

If I had made a political statement, I would had refered to another party or politician, which I haven't. In fact, I was talking about the differences between the politicians of the same party itself and of what IAF officials publicaly stated. You seems to be new to the forum and new to the tender too, otherwise you would know, that current Air Chief Raha publically refuted the DM's statements on MKI being an alternative. He even made it very clear, that the IAF wants an MMRCA, not a heavy or light class fighter and went so far to say that it doesn't necessarily need to be the Rafale!
Former Air Chief Major, stated after the visit of the PM, that 36 off the shelf is good, but that it would be (quote) "a ridiculous step" of the government, if they only procure 36, since the requirement of the IAF since the early 2000s was 126 fighters!
And last but not least, the DM itself confirmed in an interview, that the PM took the decision, without including the IAF in the process:

Q. Was the Indian Air Force on board when the government took the decision to buy 36 Rafale fighters under the government-to-government (G2G) route from France?

A. I consulted the air force to the extent it was required. They have no role in decision-making as ultimately it's the Prime Minister's call.

post #1118 - defence.pk/threads/dassault-rafale-tender-news-discussions-thread-2.351407/page-75


So...

...the DM tried to create the MKI as an alternative and put pressure on Dassault
...the IAF Chief refuted him and made it clear that IAF needs an MMRCA, not necessarily the Rafale
...the PM took a decision against both, by trying to get a G2G that reduces the pressure on Dassault and provides IAF with less fighters than they require and Parrikar did nothing but played along to what the PM wanted!

That's the reality or the mess of the tender today and nothing politicial. The level of insanity of the PM's decision gets even more evident, if you keep in mind, that not only Parrikar, but also part time DM Jaitley worked 6 months to get the Rafale deal through. He cleared the pending offset and ToT requirements in the deal and officially announced it, so the PM destroyed 1 year of NDA MoD's work, for a bad compromise.

Are you suggesting that Rafale should have been discarded or that the full number of 126 should have been procured regardless of the financial position?
Also when you suggest that the government is spinning things, do you have any reasoning in your mind as to why they are doing that? Something other than finances?

Costs is not the issue, otherwise we wouldn't pay a higher unit costs, get less returns to our industry and therefor also less taxes from them. Not to mention that this is possibly the best time to make that deal (loans in Europe at low levels, French government eager to help, Indian economy keeps recovering, which provides us with more tax returns, if you go for 36 first, you only have to pay for them this year, while the payments for the larger deal would be delayed, when even more money is available).

And if you have followed the decisision the new MoD made in the last year, it is evident that they scrap and re-issue tenders to provide privat industry favours (LUH tender, SSK tender) and even now, the offsets for the 36 Rafale are likely to be diverted to privat players (Reliance and Samtel) mainly, while the initial tender would had benefited HAL and BEL to a large extent too.
As I said in other posts, I expect the offsets of the IRST to be diverted, because that's a technical requirement of IAF and it's not in production in France anymore. Besides that Reliance might get the assembly line of Rafales produced in France, with some basic production parts. That covers the Make in India slogan and at the same time the cost of the deal is lower, because it's just for a fraction of the total requirement and because we bypass Dassault (which still is the key problem for the larger tender) and negotiate with the French government for fighters they ordered.

This deal for 36 is only good if they fix the larger order too, if not and they just use it to show, that they at least bought some Rafales, even if it doesn't help anybody.

LCA order of 10-12 sqd is a sure thing,

Doubtful, because that's just a dream figure that does not include the production time, or even the development time for LCA MK2. The current order of 6 x LCA squads won't be delieverd before 2025, so do you honestly think IAF will order 4 to 6 more squads after that, or will they prefer FGFAs or AMCA to meet the threats of that time?

If we had developed LCA in time, we would see several squads in service already and then 10 to 12 squads would make perfectly sense. But not with at least a decade delay and the MK2 only available on paper so far.

Think about this, IAF was a single engine majority airforce.It served them well to defend itself.But lately it started to acquire more medium/heavy aircrafts to face a two front offensive/defensive war.

Which shows that they don't changed the requirement just for fun, but for operational reasons! Remember, IAF initially prefered the Mirage 2000, when the MRCA was meant to provide a gap filler that is fast to induct. But threats have increased and a decade has gone by, which is why IAF needs more capable fighter. So it's not about the number of engines, but the needed capabilities to provide IAF an edge for the next 30 years and there simply was no valid single engine option in the tender, nor is LCA anyway close to provide such capability.

 

[Nityam]

If I had made a political statement, I would had refered to another party or politician, which I haven't. In fact, I was talking about the differences between the politicians of the same party itself and of what IAF officials publicaly stated.

You are slyly trying to bad mouth Modi and his govt. without mentioning the congress so that your agenda remains "innocent".

First you have to prove there is differences between politicians of BJP in this matter.

If you cannot prove it, admit your political agenda and apologize.

You seems to be new to the forum and new to the tender too, otherwise you would know, that current Air Chief Raha publically refuted the DM's statements on MKI being an alternative. He even made it very clear, that the IAF wants an MMRCA, not a heavy or light class fighter and went so far to say that it doesn't necessarily need to be the Rafale!

More LIES to cover up your agenda.

DM never said MKI is an alternative to MMRCA. He said MKI is always there to make up for the falling numbers and if need be, act like a plan B if MMRCA does not happen for various reasons.

Air Chief Raha OTOH said "his force has no Plan B and was working on only Plan A." Admitting to not having a back up plan to fulfil a critical requirement was just a desperate sales pitch for Rafale. The other alternative is Incompetence.

DM stepped up to the Air Chief's incompetence by shouldering that responsibility and some more. DM has delivered 36 MMRCA. That is a good Plan B

Former Air Chief Major, stated after the visit of the PM, that 36 off the shelf is good, but that it would be (quote) "a ridiculous step" of the government, if they only procure 36, since the requirement of the IAF since the early 2000s was 126 fighters!

Crrent DM is far more well informed that Former Air Chief. One lives in the past, the other lives in the Present. If you were not pushing your Anti-Hindutva aganda, this would have been pretty clear.

And last but not least, the DM itself confirmed in an interview, that the PM took the decision, without including the IAF in the process:

More LIES. You OWN Link admits that IAF was consulted to the extend it was required..

"I consulted the air force to the extent it was required. They have no role in decision-making as ultimately it's the Prime Minister's call."

This Proves IAF was part of the Process.

Your deliberate twisting of facts also proves you Agenda, AGAIN.

post #1118 - defence.pk/threads/dassault-rafale-tender-news-discussions-thread-2.351407/page-75


So...

...the DM tried to create the MKI as an alternative and put pressure on Dassault
...the IAF Chief refuted him and made it clear that IAF needs an MMRCA, not necessarily the Rafale
...the PM took a decision against both, by trying to get a G2G that reduces the pressure on Dassault and provides IAF with less fighters than they require and Parrikar did nothing but played along to what the PM wanted!

ALL you points have been shown to be LIES and Pure Rubbish made just to further your agenda.

That's the reality or the mess of the tender today and nothing politicial. The level of insanity of the PM's decision gets even more evident, if you keep in mind, that not only Parrikar, but also part time DM Jaitley worked 6 months to get the Rafale deal through. He cleared the pending offset and ToT requirements in the deal and officially announced it, so the PM destroyed 1 year of NDA MoD's work, for a bad compromise.

The reality is that there is more clarity on MMRCA that there has ever been during the entire process. Better still, there is clear and time bound decision making. (decision on MMRCA by 2015 March end )

The level of your insanity that makes you twist the facts and present jaded opinions is what is visible here.

NDA made a decision within 1 year of coming to power. DM Jaitley and Parrikar is part of that NDA and there is nothing to suggest the transition was not seamless. So your "twisted opinion" of them working at loggerheads is just evidence of a fertile imagination fuelled by political beliefs coloured by religious faith.

Again there is nothing to suggest its a bad compromise, Just your self proclaimed "expert opinion".

 

[I M Sikander]

I am going to take a guess that these would be MKI and MKII (whenever we get it) since there is no point in getting MKI in such a large number. The SU30MKI and Rafale would be more than enough for now, the low end aircraft can be filled with a mix of MKI and MKII though I really don't wish to have MKI in larger numbers, I want the MKII to inducted in place.

So you finally agrees with thr impotency of LCA specially mk1, any way keep your hopes alive for mk2. No other option.

 

[I M Sikander]

Any Dassault need another supply chain to meet their own requirement and exports .Do better option will be to produce in India due to very skilled labors, abandoned of resources, willingness to produce Rafale in a cost effective ways. So its Win win for both .

Why a production line in india for just 36 jets after 8 years long process.

 

[doublemaster]

Eating Mango's in the summer is also a form of corruption.

Doing PR is corruption, foreign travel is corruption, not be "secular" is corruption............. everything except taking money is "corruption'"

Bhaktha....Dont try to beat Prahlada...Get well soon!

 

[Nityam]

Bhaktha....Dont try to beat Prahlada...Get well soon!

Mullah ...... don't run after 42 virgins. Get well soon.

 

[Bang Galore]

Parrikar also set out the exact figure on India's manufacturing share of the Rafale fighter jet project - France will need to spend 50% of the contract value, almost four billion dollars, as investments in the Indian defence and aerospace sector. The minister said the Rafale jet project will "unleash Make-in- India".

Parrikar also said that with India buying around 36 Rafale jets for now, government savings on this project is likely to be up Rs 60,000-65,000 crore.

These figures bother me a bit. The first part suggests that the deal is for $8 billion dollars, roughly around Rs.50,000 crores. Apart from the figure being a bit mind boggling, how does it square with "savings" of Rs. 60,000-65,000 crores? What is the definition of "savings" being used here? Non-purchase of the balance quantity of 90 aircrafts is considered as saving? Or that the normal cost for the 36 aircrafts would have been Rs.60,000-65,000 crores extra? Since that is obviously absurd, RM is referring to the unspent part which raises the question (apart from the definition of savings) - Rs.50,000 crores for 36 aircrafts but Rs.60,000-65,000 crores for the balance 90?

This is real fuzzy maths right here......

@sancho , @Abingdonboy , @Nityam

Wonder about these figures even more when i see stuff like this:

"Kuwait plans to order 28 Super Hornet advanced fighter jets worth $3bn (£1.95) from Boeing, snubbing a deal to buy British-made Eurofighter Typhoons."

Kuwait decides to buy F-18 fighter jets from Boeing for $3bn, rejecting UK-made Typhoon deal

 

[Nityam]

These figures bother me a bit. The first part suggests that the deal is for $8 billion dollars, roughly around Rs.50,000 crores. Apart from the figure being a bit mind boggling, how does it square with "savings" of Rs. 60,000-65,000 crores? What is the definition of "savings" being used here? Non-purchase of the balance quantity of 90 aircrafts is considered as saving? Or that the normal cost for the 36 aircrafts would have been Rs.60,000-65,000 crores extra? Since that is obviously absurd, RM is referring to the unspent part which raises the question (apart from the definition of savings) - Rs.50,000 crores for 36 aircrafts but Rs.60,000-65,000 crores for the balance 90?

This is real fuzzy maths right here......

@sancho , @Abingdonboy , @Nityam

Wonder about these figures even more when i see stuff like this:

"Kuwait plans to order 28 Super Hornet advanced fighter jets worth $3bn (£1.95) from Boeing, snubbing a deal to buy British-made Eurofighter Typhoons."

Kuwait decides to buy F-18 fighter jets from Boeing for $3bn, rejecting UK-made Typhoon deal

Consider the following facts.

1. Rafale for India is reported to be offered at a same price the French Govt. purchased it. Which means its the lowest possible cost.

2. New report says 50% of purchase cost will be reinvested back into Make in India.

3. Govt. has eliminated any Risk from the deal. There is no commitment for any future purchase.

4. ALL Risk now is to be taken by Dassault and they have to set up the plant and Indian partner in the hope that Indian will purchase more.

5. This is also incentive to reduce cost for future purchase, or in worst case, not to increase the cost.

The supposed saving of 10 billion $ will possibly be w.r.t opportunity cost, consulting cost, purchase of machines etc. which will now not go from the govt.'s pocket.


Qatar purchased 24 Rafale for 7 billion $ with No ToT, so 36 Rafale for 8 billion along with 50% ToT is a Great deal.

Now,

1. Kuwait already operate around 27 F-18 and has infrastructure to support, train, maintain them and armaments etc.
2. US aircraft purchase cost is typically without the Engine cost. or without any other kind of support.
3. F-18 is definitely cheaper than the Rafale but also comes with strings attached and it has been rejected in the MMRCA trials.


If we strictly go by cost, F-16 purchase is the best possible buy for MMRCA. Sadly that is too not an option.

 

[Bang Galore]

Consider the following facts.

1. Rafale for India is reported to be offered at a same price the French Govt. purchased it. Which means its the lowest possible cost.

2. New report says 50% of purchase cost will be reinvested back into Make in India.

3. Govt. has eliminated any Risk from the deal. There is no commitment for any future purchase.

4. ALL Risk now is to be taken by Dassault and they have to set up the plant and Indian partner in the hope that Indian will purchase more.

5. This is also incentive to reduce cost for future purchase, or in worst case, not to increase the cost.

The supposed saving of 10 billion $ will possibly be w.r.t opportunity cost, consulting cost, purchase of machines etc. which will now not go from the govt.'s pocket.


Qatar purchased 24 Rafale for 7 billion $ with No ToT, so 36 Rafale for 8 billion along with 50% ToT is a Great deal.

Now,

1. Kuwait already operate around 27 F-18 and ha infrastructure to support, train, maintain them and armaments etc.
2. US aircraft purchase cost is typically without the Engine cost. or without any other king of support.
3. F-18 is definitely cheaper than the Rafale but also comes with strings attached and it has been rejected in the MMRCA trials.


If we strictly go by cost, F-16 purchase is the best possible buy for MMRCA. Sadly that is too not an option.

My point was specific to the two sets of figures which don't seem to square off well. Secondly, we are now told that around $ 200 million is cheap & that is supposedly the cost being paid by the French. What does that make the original MMRCA deal worth then? $25-30 billion? We have discussed this before, it was a bad deal then & remains so now. This is essentially a political decision, Funny that the UPA government had told the Americans that this was purely technical, not political, so they couldn't get in. Now we are back to a political call whether or not this government had a choice or not after the goof up before.

 

[Hellfire]

@ Sancho : notwithstanding the tardy progress by HAL, the LCA mk2 will be inducted into the IAF. The problem was ToT for engine as Kaveri failed miserably, With the US agreeing to help India in critical fields of defence, the ToT for GE-F414 has been agreed to for mk2. The problem was the reconfiguration of mk2 to accommodate the bigger (and better) engine than GE-F404 which is integrated into the mk1. It is similar to the problem with Arjun. The GSQR keeps changing as the time passes and PSUs taking years to develop a particular platform, so the GSQR is revised again. Now with the sword of private players hanging over the PSUs, the PSUs have been kicked into performing or simply perishing. Shiv Aroor's blog for your perusal ..

LIVEFIST: GE Statement: F414-powered LCA’s Mission Superiority Enhanced With Indian Expertise

@ Nityam Reading your posts, you have hardly given any facts or a rationale for your points, have instead chosen to be personal and in bad taste. While it is your wish how you want to be, my suggestion is to not get personal or fanatical, present your points with proofs from open sources, or justify them with rationales, in case you want to be taken seriously. And on one more point of you trying to laugh at former air chief knowing less than the DM, bro, if you have been in the services, you will realize that there are capabilities with us that the DM is not aware of. There are few sections of the armed forces which report directly to the PM, and no one else. And sometimes it may happen that a colonel knows about something and the Chief is not aware of that at all. Indian security establishment is very well segregated and is compartmentalized. Just for your info