Dassault Rafale, tender | News & Discussions [Thread 2]

[aakash_2410]

Bloody hell! Still no contract?! Indian bureaucracy makes me wanna pull my hair!!

 

[topgun047]

Who said there were to be no guarentees? That's what the "Comfort Letter" takes care of. But there is no need for a Sovereign Guarantee as Dassualt is a private entity and this deal is not being pursued through a government-government route like FMS in the US or through Rosoboronexport as with Russia. This is a commerical sale.

I am not looking to enter a long winded argument these things generally devolve to.
There are some things I feel you are misunderstanding though I am not sure.

Anyways I will take the line of GOI here - Give the guarantee or no deal.

 

[Picdelamirand-oil]

Rafale: Safran in favor of increasing the thrust of the M88 engine
Google Translate

 

[Abingdonboy]

LOL ...... do you even know what a "comfort letter" is ?

A comfort letter is a document prepared by an accounting firm assuring the financial soundness or backing of a company. THAT IS IT. NOTHING MORE.

That is a Minimum Condition, not a Necessary condition. Do you understand the difference between the two ? Clearly you don't.

A comfort letter is NOT A GUARANTEE. It DOES NOT GUARANTEE that Dassault Will full fill the contract. It only guarantees that it CAN fulfull the contract.

Do you understand the difference between the two ?

What "personal attack" have I indulged in ? SO far the only one who was attacked is me. That too for asking a simple uncomfortable question.





Rather than be childish and blame the Media, the vested interests, and what not, it would be better if one can focus on the simple issue that has been highlighted.

What kind of built Guarantees does the deal have to safe guard Indian interest ? Everything else is just fluff.

I am not looking to enter a long winded argument these things generally devolve to.
There are some things I feel you are misunderstanding though I am not sure.

Anyways I will take the line of GOI here - Give the guarantee or no deal.

Very good point.

Tendulkar has given guarantee that "Boost is the secret of his Energy". We should all drink Boost.

I am sure you find comfort in the big and strong hands of Dassault. It must be wonderful to be so gullible.

What a shame we all have to grow up sometime.

Ya right, its all just a big phoney.

We don't really need any Guarantees, we have "God" on our side..

This has all got very tedious, I am going to go get some lunch and remove myself from this disucssion entirely. I am more than certain the GoI/MoD will do what is in the best interests of their constituents, this mindless barking, assuming the worst is not very constructive.

 

[PARIKRAMA]

Rafale: Safran in favor of increasing the thrust of the M88 engine
Google Translate

The CEO of Safran Petitcolin Philippe said he was "favorable" to an increase in Rafale engine thrust, the M88. According to the assumptions, the new M88 engine thrust could range "between 8 and 9 tons of thrust", against about 7.5 today.


The CEO of Safran, Philippe Petitcolin, said in an interview with French journalists it was "time today to ask about an upgrade (improvement, ed) the M88 in terms of thrust." He said it is"favorable". He recalled that the original thrust of the engine Rafale was the same since the launch of the French fighter. Approximately 7.5 tons of thrust. Why such an improvement? "The Rafale has grown. Compared to the original specification, the Rafale is heavier today. He is asked more and more" operationally, explained the operational head of Safran, who has not yet discussed with Dassault Aviation.

"It is time to ask the question whether it is not appropriate to launch a study that would inflate a little this engine. Technically we can do. We are in discussion with the relevant authorities to see if possible. and if so, under what conditions and at what level of performance, it would be desirable "to improve it, said Philippe Petitcolin.

What would be the good push for the Rafale? "It depends on whether France is" ready or not to make changes to the aircraft itself in terms of air intake, "he said. According to the assumptions used by France, the new M88 engine thrust could range "between 8 and 9 tons of thrust." this is what the Emiratis had asked a few years ago before abandoning the project. Regarding investments for the modernization program, Philippe Petitcolin said the discussions were not yet at this stage. "I have not the amount (of investment, ed.) it is a discussion which is ongoing . I will have in the coming months, "he said.

Difference is that is for SELLING Rafale, not for Technology Transfer.

Do you understand the difference ?

You pay money for ToT and the Dassault says , sorry the Govt. of France is not letting us do it. So what happens next ?

What good is the bank guarantee if Dassault will turn around and say that we have already delivered 36 Aircraft as per the contact, so no more ToT since GoF has refused us permission.

Please show me what do you believe "Technology transfer" constitutes in this deal...

What do you think DA is giving us in TOT?

Before parroting this line, i urge you again to understand and re read what you are writing...

 

[PARIKRAMA]

Are you saying the deal for 36 Rafale has no ToT built in ?

Long back about 3-4 months back Manu Pubby declared in Public what constitutes in Rafale 36 off the shelf deal as part of "credible" technology transfer that DM MP wants to be in the fineprint of this deal. These were clubbed under mandatory offset program

1. Manufacturing Line of Rafale In India with a Indian Company
2. A role in developing an Under carriage for Tejas Naval variant with HAL
3. RAM painting technology
4. A role in designing air intake systems for domestic fighter program
5. Integrated Production Line software and Management System

These are whats being constituted as deliverable and credible tech transfers

We are not getting any sophisticated know hows as it was under original MMRCA deal with 50% offsets where there were bigger pies like RBE2 AESA, and other cutting edge tech was there for TOT and which was not possible owing to the fact that IPR issues and French Government could block it any time (like US government Senate refuses).

These 5 things are more or less are too meagre for any IPR issues or any French Senat Blocking.

 

[sathya]

Difference is that is for SELLING Rafale, not for Technology Transfer.

Do you understand the difference ?

You pay money for ToT and the Dassault says , sorry the Govt. of France is not letting us do it. So what happens next ?

What good is the bank guarantee if Dassault will turn around and say that we have already delivered 36 Aircraft as per the contact, so no more ToT since GoF has refused us permission.

I have no idea what guarantee is ..

After reading past few pages posts , I am guessing no one has a clear Infos regarding it, in the past or rafale..

By reading your posts,

India made a mistake in scorpene ..

Why would we do mistakes again if we are in a position to not do it?

When we reach certain point we may not look at the companies who don't honour the deal... Until then we have make use of the best , that's available ..

 

[randomradio]

So in short you have NO IDEA how that "dassault guarantee" works.

Are you too stupid to understand that I already said I have NO IDEA?

Good job on coming to that conclusion. It took me three posts to get you to understand that.

In that case why don't GoI give Dassault a "guarantee" that we will pay for the aircraft once they have delivered it ? Not one paise before that.

For expensive systems, money is paid in installments. Dassault has to make huge investments before construction of the aircraft, so they need money to buy long lead items, tools and start construction. The sooner we pay, the cheaper the aircraft is. The more we wait, the greater is the payout due to inflation. So you have NO IDEA.

If India has to pay the full amount during delivery, then it will become unaffordable. Instead the money is paid in installments as and when the the aircraft reaches a particular stage in manufacturing over 3 years. The final installment is paid after delivery.

I have no idea what guarantee is ..

After reading past few pages posts , I am guessing no one has a clear Infos regarding it, in the past or rafale..

By reading your posts,

India made a mistake in scorpene ..

Why would we do mistakes again if we are in a position to not do it?

When we reach certain point we may not look at the companies who don't honour the deal... Until then we have make use of the best , that's available ..

Dassault will pay a penalty in case the aircraft quality is not up to par or is delayed.

 

[PARIKRAMA]

Dassault seeks a Guarantee from India where we have to make a part payment IN ADVANCE to ensure our credibility.

However when India seeks a counter Guarantee from Dassault, they seem to have a problem with it.

That is the Gist of the whole thing.

Then there are those who call GoI fools for seeking such guarantees

We need to look beyond "honour" when making deals. We need iron clad guarantees that will not be hostage to their "good will" and doubtful integrity.

Scorpene discussion is outside the scope, but its fair to say we did not have sufficient safe guards.



This is pure speculation.

ASSUMING this to be true, how can we guarantee compliance to these requirements ? Do we take their "word" for it ? or do we require something more substantial ?

Maybe a Bank Guarantee that will ensure that we can fund our own R&D if Dassault fail to deliver ? or Maybe a French Sovereign guarantee that will force Dassault to supply us with this tech ?

or are you going to stick with that line that its all a evil conspiracy by the media and "vested interests" ??

At present neither i nor you have a 150 page IGA to know whats inside it.. If there is any other data i would love to hear about it.

As for the part about guaranteeing compliance, There are two parts,, The offset execution happens in shorter period of time during the initial years of the deal whereas Indian payment in tranches happens over longer period of deal. In short, if the progress is not tangible in offset execution, there would be corresponding penalty deducted in tranche payment.

The route may be a BG where these clauses will be referred to and defined under Terms of Payment. Under any circumstances there will be a mobilization advance, a part payment for the tranches and a retention payment part.

The retention payment will not get discharged unless DA executes the offset properly and GOI/MOD is convinced about it.

There wont be a Sovereign French Guarantee for such a weapon deal or execution of offsets.

 

[randomradio]

The normal practice is to keep quite when you have No Idea. Too bad you had to fake it till I proved the obvious. That you don't know.

Good. you should practice what you preach then.

By that same twisted logic, it would be cheaper to pay the full money upfront since that would work out the cheapest.

No. There is a 5.5-7.5% inflation on the contract. The later we pay, the more we add to the price.

If you pay for something 3 years after production starts, then you are paying a minimum 5.5% extra every year you wait.

The point is about Risk mitigation. Dassault reduces Risk to itself by ensuring part payment. That is Risk management.

GoI seeks to manage its risk by a bank Guarantee or a Sovereign guarantee.

.

That is what is ensured by the GUARANTEE.

The contract is no different from any contract between two private players. Just because we don't know what's in the contract doesn't mean we start jumping the gun because we read an obvious paid article.

Anyway, military contracts have more than just bank and sovereign guarantees. There are penalties in contracts. If the program is to continue after lapses, Dassault will have to pay penalties to make up for the lapses.

Tools and long lead items are expensive. They would have purchased it for the entire duration of the contract. If Dassault messes up, they go under a loss.

It is easier to deal with private players than with govt controlled players because they are more worried about profits and losses. And penalties eat into their profits.

So it's no as simple as throwing around words like "bank guarantee or sovereign guarantee" and expecting a one word answer. And the guarantee mechanism is generally a state secret. We don't buy weapons on loans. We buy them on hard cash.

There was no sovereign guarantee on the Russian Mistral deal. But the Russians have successfully dealt with their problem.
France pays Russia €900mn compensation for Mistral warships - reports — RT News

Don't get so excited over articles from lobbyists.

 

[topgun047]

Can you answer these questions that came to my mind ?
Where is the penalty in Cobham deal ?
What penalty did Russia pay for not supplying TOT of T-90 barrel ?

Anyway, military contracts have more than just bank and sovereign guarantees. There are penalties in contracts. If the program is to continue after lapses, Dassault will have to pay penalties to make up for the lapses.

 

[randomradio]

^Where is the penalty in Cobham deal ?
What penalty did Russia pay for not giving of T-90 barrel ?

Are both from Dassault?

Why don't you ask those questions to the parties involved? Don't bring irrelevant aspects into Dassault. Both are DRDO's headache.

 

[topgun047]

Are both from Dassault?

Why don't you ask those questions to the parties involved? Don't bring irrelevant aspects into Dassault. Both are DRDO's headache.

But these contradict your claim, the qouted part...

 

[PARIKRAMA]

You are again Speculating.

What do do have is a Report that talks CLEARLY about,

1, Liability heavily loaded in favour of France
2. Refusal of the French government to give any bank guarantees
3. Attempt to replacing Guarantees by "comfort letter" by its PM.

Not to mention a 50% Offset clause.

No solution is mentioned, but there can be only two.

Either France provides the guarantees or India compromise on its interests and sign away the guarantees.

If you dont understand finance parlance, no one can help you with your "idiotic" methodology of going round and round even when everybody explains to you in simple lucid words..

For what i say is speculation and what you say is fact.. Get out of your mountain cave which you have been living for decades and think the world moves at your whims and fancies....

Point 1
The fact remains you are basing all this spouting of round round nonsense on one report and sidelining everything including what DM MP has clearly said.. You believe a report is more authentic when DM MP statement..

Point 2
You can keep talking things again and again by saying Government needs to give BG when you dont understand a government cannot give a BG.. A Government gives a Sovereign guarantee to a Bank which provides a loan for the customer towards payment to Dassault for its Rafales .. That what happens when you have a loan backed defense deal.. A government cannot give a BG!!! Only a financial institute like a Bank gives BG.

Pls enlighten us all about any deal from your knowledge with facts and figures where a government issued a BG.

Point 3
A comfort letter is a normal practice.. France does not have a PM.
IF you believe that its not enough then pls as a free country you can go file a case in Supreme Court stating its against the countries National interest..

Sadly thats the same structure followed world over..


For your kind information and irrelevant ranting in this thread, till now GOI/MOD has not penalized HAL for its absolute disgraceful project execution in Tejas Project. Not even in case of Cobham they could do anything to Cobham which faced issues with specs for Nose cone. Not even in case of SP2 or in Case of delays in IOC nd FOC or in case of absolute delay in the whole project. The courage and ability of the government to seek financial penalty does not exist in domestic projects till date but you expect a foreign vendor should be backed by Sovereign guarantee for the so called 36 rafales bcz a news report says so.

PS: I am already aware what was your original account as your style of writing and choice of words is very much easy to see the similarity..

 

[randomradio]

But these contradict your claim, the qouted part...

They don't.

Also in case there were penalties levied, we won't know about it because it will be a state secret. We only know certain things because of CAG reports. Nobody willingly discloses such details.

Russia could afford to go ahead with Mistral deal without a guarantee, They have a fearsome reputation backed by more than 1,500 Nukes. They have a huge history of ship building.

You talk about childish and grown ups and real world and then start talking about nukes factor in the Mistral deal.

Lol. That ended the discussion.