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

[sancho]

Dassault might be hoping India would eventually go on their terms like Mirage upgrade deal. They could be really wrong this time . I guess Govt has made its mind. Increased rigor on FGFA looks to be part of plan. I think India can not afford FGFA and Rafale for its air force. That would really suck out money from other services.

What they hope is not important, only what the RFP and DPP states is. They just have to say if they comply or not.
FGFA has no relation to MMRCA, both were always considered as seperate deals for different purposes.

 

[nik22]

What they hope is not important, only what the RFP and DPP states is. They just have to say if they comply or not.
FGFA has no relation to MMRCA, both were always considered as seperate deals for different purposes.

I know these are two separate programs but somewhere money has to come from. Navy and Army has dire needs. Navy is on ICU for their submarine. They need more than 150k crore for 6 ssk + 6 SSN + SSBN. That is like $25B for next 10-15 years. Army needs $10B for mountain unit. If India go for Rafale + FGFA both, that is like $40B (15 + 25). Now again in next 10- 15 years. This is like $75B of capital budget. That is just the major projects counted. Total requirement is much more + capital for ongoing projects. No way Govt can spend that much money when focus is to cut down fiscal deficit.

If you would have to cut down some spending where would you do? I don't see happening with Navy and Army.

 

[sancho]

This is like $75B of capital budget.

Actually the plan is to spend up to $100 billions over the next 10 years as several reports and statements said.

If you would have to cut down some spending where would you do?

There is no need to cut, but to do proper increases based on the growing economy and use the available budget in a proper manner. Jaguar upgrade is largely a waste and we should be aiming on selling them rather than keep them. Apache procurement is a waste, by the fact that there is no operational need in IAF for it. Chinook order is not only a waste of money, but makes IAF effectively less capable than they are today with Mi 26s. These 3 examples alone, could safe a lot of money in the budget, but that's another topic and you might want to open a new thread for discussions on that.

 

[SpArK]

Warranty Compromise Agreed on India Rafale Contract
(Source: Defense-Aerospace.com; published Mar 11, 2015)

(By Giovanni de Briganti)

PARIS --- A compromise solution splitting contractual warranties between France’s Dassault Aviation and India’s Hindustan Aeronautics Ltd. (HAL) has removed the biggest obstacle to closing the long-delayed sale of 126 Rafale fighters to India.

Dassault chief executive Eric Trappier confirmed here today that the compromise solution makes each company contractually responsible for its own work on the contract. This is of crucial long-term importance as HAL is due to gradually assume a bigger share of the 108 Rafales it is due to assemble, and ultimately manufacture, in India.

“Now, there will be a shared warranty as each partner will be responsible for its own work, Trappier told reporters here, “and HAL will provide warranties for its own work.” The Indian government has been insisting that Dassault take responsibility for the aircraft assembled by HAL, over which it had no control, and both sides have wrangling over this point for the best part of two years.

This is the same warranty arrangement that is currently in force for the two companies’ work on the ongoing upgrade of India’s fleet of Mirage 2000H fighters, and it is not clear why it was not adopted from the start. A senior Dassault executive said “taking responsibility is the only way to grow up and to gain experience,” and it is what Indian manufacturers must do to implement the governments “Make In India” policy.

For the Mirage upgrade, Dassault is supplying the first two complete upgraded aircraft – they are due to be delivered in the coming weeks – while the rest will be upgraded by HAL in Bangalore. HAL will provide the warranty for the latter, with Dassault providing assistance as necessary.

Trappier was careful to note that resolution of the warranty issue does not mean an immediate signature of the Rafale contract, as this is always a long process in India as many administrative levels are involved. (The long-overdue report of the Contract Negotiation Committee, which is necessary for the Rafale contract to be approved, has still not been released—Ed.)

Dassault has replied to a request for information from the Indian Navy on the naval Rafale M single-seat carrier-capable variant of its fighter, Trappier said, but this aspect has been overshadowed by the main contract.

He also declined to provide any clarity among the conflicting cost figures published in India on the Rafale contract, but he did say that, in euros, its cost has not increased since 2012. And the euro’s depreciation compared to the US dollar makes Rafale more competitive than its foreign competitors, he added.

According to current plans, Dassault is to build and deliver the first 18 Rafales from its own production line at Bordeaux-Mérignac, but HAL will assemble all aircraft beginning with the 19th aircraft, and will manufacture a gradually bigger share of the aircraft so that, by the time the 126th is delivered, it has become practically autonomous.

Trappier also dismissed reports in the Indian press that the Rafale deal will be replaced by a new buy of Russian fighters. “I see that Rafale is a fighter that scares the Russians, but we are not afraid of their fighters,” he said, adding that Russian competitors had been eliminated from the Medium Multi-Role Combat Aircraft (MMRCA) competition that Rafale ultimately won.

-ends-


Warranty Compromise Agreed on India Rafale Contract

 

[PARIKRAMA]

Is individual warranty as per RFP? or its a grey area? Either way its a climbdown from India's position, so what had french gave up as compromise? If its not a good bargain, MOD will find it difficult to explain the reason for this climbdown

 

[shaileshmd]

I know these are two separate programs but somewhere money has to come from. Navy and Army has dire needs. Navy is on ICU for their submarine. They need more than 150k crore for 6 ssk + 6 SSN + SSBN. That is like $25B for next 10-15 years. Army needs $10B for mountain unit. If India go for Rafale + FGFA both, that is like $40B (15 + 25). Now again in next 10- 15 years. This is like $75B of capital budget. That is just the major projects counted. Total requirement is much more + capital for ongoing projects. No way Govt can spend that much money when focus is to cut down fiscal deficit.

If you would have to cut down some spending where would you do? I don't see happening with Navy and Army.

Here are some important ways to reduce spending, and improve the cash flow
1) All GOI employees must increase productivity to private sector level.
2) All benefits and salaries should be comparable to private sector
3) Redundancy should be removed at all costs ( e.g. One Lt GOV in previous GOI had 31 drivers and commando guards!
4) Aggressively go after known corrupt officials who have amassed " billions" in cash, property and real estate. The previous chief engineer in UP GOV may have accumulated 100 billion RS in wealth. This money belongs to people of India. All real transactions should be audited. The 6/40 rule practiced in the industry is draining the country of massive revenue. Increase the property tax to realistic level. Once property tax increase comes in play, all services can be provided properly. This will increase employment, more enforcement of rules and regulations.
5) Bribers must bear massive fines, and jail terms no less than 10 years to prevent " palm greasing".
6) GOV owned under productive industries should be sold, or managed by the professional consultant teams of technical experts.
7) Realistic productivity goals should be expected from all GOI owned ventures
8) The internal revenue svc should be an independent agency. Massive training, and professional management with additional staff to prevent loss of taxes is must. Only 3 percent of the earning population is paying taxes. Proper auditing and loss prevention techniques can increase the revenue by thousand percent in no time. Many service based industries are cash only. Restaurants, small self employed merchandise sellers etc pay very little taxes. A mandatory electronic sales and receipts device will immediately control the tax pilferages. Periodic video monitoring, purchase and sales receipts tally and aggressive punishment for tax evasion will curb most, if not all black money. Manufactures and wholesalers encouraging cash business should be forced to submit all sales data to the retailers electronically to the auditors. Armed with this information, the retailer has limited chance of pilferage.

 

[sancho]

This is the same warranty arrangement that is currently in force for the two companies’ work on the ongoing upgrade of India’s fleet of Mirage 2000H fighters, and it is not clear why it was not adopted from the start.

Which shows how silly Dassault is moving in this negotiations, when they reach the same level of warranty only now, after 3 years of negotiations and still are not able to meet what the MoD wants since day one of the competition.
But this article is mainly based on the statements Eric Trappier gave some days ago:

FINALIZE THE CONTRACT

The leader returned to the Indian contract. Negotiations for the sale of 126 Rafale last for more than three years.

"The Indian Air Force is extremely pleased with the technical definitions. We finalized our industrial agreements with the largest industrial partner HAL has manufactured many of the aircraft locallyensures the leader. We have a contractual sharing of tasks on which we agreed. Now we have to finalize the contract with the Indian Ministry of Defence "

Dassault Rafale, tender | News & Discussions [Thread 2] | Page 42

So no matter what Dassault and HAL agree on wrt the workshare, the issue is about Dassault taking responsibility for the overall deal, according to the requirements of the MoD!

Is individual warranty as per RFP? or its a grey area?

Dassault Rafale, tender | News & Discussions [Thread 2] | Page 13

That's not the issue, since the DPP clearly states, that the OEM is only responsible for issues caused by or attributed to him. If Dassault provide faulty toolings or parts, that causes delays in the HAL's production, Dassault is responsible anyway, just as HAL would be for production mistakes from their side.
The real issue is the "performance guarantee", similar to the naval gun production case:

The MoD also wanted the vendors to undertake production, quality control and timeline guarantees for the BHEL-produced naval guns but without providing the vendor with executive or supervisory authority over the public sector company.

So that issue is the pending one, which Dassault first tried to avoid by deviate from the RFP and make Reliance the prime contractor, since they would have more control over the production line. But since IAF and all MoD's were stern about not moving away from the RFP and insisting on HAL, Dassault had to agree on the workshare, but still hasitate on the performance guarantees till now.

 

[wiseone2]

Honestly, if Dassault and French government cant work out a deal signing when India PM modi is there, then its a golden chance missed. Then i think we all should fancy less abt this deal gng through. With so many programs here and there planned, the more the delay the more it loses its relevance and thus reduces its chance for the massive contract..

May be Dassault is just happy to supply advanced avionics to JF17 program !!!

@halloweene : Whats the lates friend? You attended their annual meeting? if yes, no one is asking any tough question for MMRCA or all are overjoyed with just Egypt? Even without annual meeting, what are the feelers from Dassault camp?

india mirage-2000 upgrade is worth more $$$ than the jf-17 program

 

[Major Shaitan Singh]

Rafales next to the Chengdu J-10

 

[Superboy]

Rafales next to the Chengdu J-10

That's J-10A. Ugly and obsolete. They have J-10B operational now.

 

[Abingdonboy]

Dassault, HAL To Be Co-Contractors On Indian-Built Rafales

SAINT-CLOUD and PARIS – France’s bid to sell 126 Rafale combat jets to India moved a step closer to reality in recent weeks, with Dassault Aviation and Hindustan Aeronautics Ltd. (HAL) reaching an agreement as to who will be responsible for guaranteeing 108 Indian-built aircraft required under the deal.

The first 18 Rafale jets are to be built in France. After that, India’s HAL would take over production of the remaining aircraft.

"This is the first time Dassault agrees to be a co-contractor," Dassault CEO Eric Trappier said following his company’s annual earnings conference March 11. "Dassault and HAL will both take responsibility for the part they will each build on the Rafale aircraft made in India," he continued, asserting the commitment is in line with the Indian government’s initial request for proposals under the Medium Multi-Role Combat Aircraft (MMRCA) tender.

Trappier’s comments track with those of French defense procurement chief Laurent Collet-Billon in February: "Dassault will not be responsible for the whole contract," Collet-Billon said. "It is a co-management setup," meaning France will not assume full liability for the HAL-produced aircraft, and therefore HAL will not be a subcontractor to Dassault.

The question of production of Rafale aircraft on Indian soil has been one of the main sticking points between Paris and New Delhi in talks over the estimated €10.2 billion ($12 billion) agreement underway for the past three years.Trappier did not confirm the amount of the MMRCA contract, saying only that Dassault’s offer "stays the same."

The Dassault-built Rafale chalked up its first export sale in February with a contract to sell 24 of the combat jets to Egypt, along with a Fremm multi-mission frigate built by French shipbuilder DCNS.
"The first check arrived at the beginning of the week," Trappier said, adding that three of the aircraft will be delivered this year. He said Paris and Cairo are now discussing delivery rates for the coming years. Dassault is currently producing 11 Rafales a year for the French air force and navy, but Trappier says the factory could raise production to "a bit over 2.5 a month, if needed."
[...]

More:
http://aviationweek.com/defense/dass...-built-rafales

 

[sancho]

Dassault, HAL To Be Co-Contractors On Indian-Built Rafales

France’s bid to sell 126 Rafale combat jets to India moved a step closer to reality in recent weeks, with Dassault Aviation and Hindustan Aeronautics Ltd. (HAL) reaching an agreement as to who will be responsible for guaranteeing 108 Indian-built aircraft required under the deal...

..."This is the first time Dassault agrees to be a co-contractor," Dassault CEO Eric Trappier said following his company’s annual earnings conference March 11. "Dassault and HAL will both take responsibility for the part they will each build on the Rafale aircraft made in India," he continued, asserting the commitment is in line with the Indian government’s initial request for proposals under the Medium Multi-Role Combat Aircraft (MMRCA) tender.

Trappier’s comments track with those of French defense procurement chief Laurent Collet-Billon in February: "Dassault will not be responsible for the whole contract," Collet-Billon said. "It is a co-management setup," meaning France will not assume full liability for the HAL-produced aircraft, and therefore HAL will not be a subcontractor to Dassault.

Two things,
1) co-responsibility is better than nothing, but it must be shared at an equal base till the end, not linked to HAL's workshare, otherwise the shared responsibility would still not work according to the requirements.
2) It's interesting that Mr Trappier basically admits now, that this responsibility clause was in the RFP, which was denied before!

 

[Abingdonboy]

2) It's interesting that Mr Trappier basically admits now, that this responsibility clause was in the RFP, which was denied before!

Yes, I thought this was an interesting departure from Dassualt's past statements that basically claimed they were compliing with the RFPs fully and that there was no such liabilty clause contained within it- the waters do muddy.

+ @sancho note the quoted/reported price. It is interesting that the $12 Bn figure is consistently used in the French media now, nothing as abusrd as $20 billion+ has been reported by these responsible journalists.

 

[sancho]

note the quoted/reported price. It is interesting that the $12 Bn figure is consistently used in the French media now, nothing as abusrd as $20 billion+ has been reported by these responsible journalists.

As the article itself stated, Dassault didn't confirmed the figure, so it remains to be just another estimate. Personally I think that figure is too low and I stick with my estimate of around $16 billion, lets see.

 

[Sri]

Yes, I thought this was an interesting departure from Dassualt's past statements that basically claimed they were compliing with the RFPs fully and that there was no such liabilty clause contained within it- the waters do muddy.

+ @sancho note the quoted/reported price. It is interesting that the $12 Bn figure is consistently used in the French media now, nothing as abusrd as $20 billion+ has been reported by these responsible journalists.

The $12 billion might be flyaway cost which means cost of each bird little less than $100 million which was our guess and I believe the lifetime cost might be $20 billion which I think is also fine.
any thoughts
tx