What's new

Dassault Rafale, tender | News & Discussions

Status
Not open for further replies.
Tuesday, 14 December 2010
Moment of truth for defence offsets

By Ajai Shukla
Business Standard, 14th Dec 10

Tomorrow the MoD’s apex procurement body, the Defence Acquisition Council, will consider and possibly dilute India’s defence offset policy. The proposed changes --- especially the “liberalization” of defence offsets into fields like civil aviation and homeland security --- would nullify the very rationale of a defence offset policy, which is to direct foreign money and know-how into India’s nascent defence industry by leveraging our position as a major buyer in the global arms bazaar.

Global arms corporations quite predictably resist investing in another countries’ defence industries: this builds up potential competitors; involves the painstaking and commercially risky task of identifying local partners; it transfers jobs overseas; defence remains a highly regulated field; and there are obvious strategic reasons as well. And so global arms corporations have a persuasive counter-argument that portrays offsets as unscrupulous commercial arm-twisting, which is counterproductive since it yields jobs only in the short term, with the costs borne by the buyer since the vendors load them onto the basic contract.

Foreign vendors selling weaponry to India have constructed an even more pernicious argument: that our defence industry is incapable of absorbing the vast offsets that will arise from arms purchases over the next five years. With a CII-Deloitte report in June projecting that the MoD will spend Rs 3,60,000 crore (US$ 80 billion) on the capital purchase of weaponry by 2015, India’s defence industry would be required to absorb at least Rs 108,000 crore (US$ 24 billion) worth of offsets. Therefore, suggest these vendors helpfully, the buyer should “liberalise” the policy by permitting offsets in easy fields like infrastructure, homeland security, healthcare, etc, where investment is attractive.

These self-serving arguments are, worryingly, being swallowed by the MoD, which is forgetting that it fire-walled the defence offset policy from the national offsets policy (which covers non-military procurements like civil airliners, nuclear plants, etc) expressly to jump-start Indian defence industry. To now allow vendors to discharge offset liabilities in non-defence spheres would be a turnaround that reeks of capitulation before foreign pressure groups.

Instead, the MoD must remind global arms vendors that, by participating in Indian defence tenders, they have explicitly accepted the obligation to meet our defence offset requirements. This places on vendors the responsibility to build the capacities of their local offset partners, if necessary by transferring the technology needed to develop Indian suppliers into viable links in their global supply chain.

Any difficulty that foreign vendors are encountering in finding Indian partners stems from a lazy reluctance to reach above the low-hanging fruit --- defence PSUs like Hindustan Aeronautics Ltd; Bharat Electronics; and large private corporates like L&T, and the Tata Group, which are already flush with offset offers --- and instead identify partners from amongst the many small and medium scale industries that have emerged over the last decade. The Indian defence landscape has an entire ecosystem of defence firms with impressive technological skills and entrepreneurial talent, many of them concentrated around hubs like Hyderabad, Bangalore, Pune, Chennai and Delhi. So far largely untapped, these provide partnership opportunities to global defence corporations that will endure long after their offset requirements are met.

Much of the government’s muddle-headedness on these issues stems from the absence of a clearly articulated aim for the defence offset policy. Consequently, Indian pressure groups lobby self-servingly: the DRDO pushes offsets for obtaining the 18 technologies that it has listed as key priorities; the IT industry as an opportunity to develop defence software; and low-tech manufacturing companies as an easy source of massive orders for low-end, labour-intensive, repeat manufacture.

To direct offsets into IT or repeat manufacture is wasteful, since these sectors will anyway attract foreign investment based on commercial logic. Nor should offsets be wasted on high technology, which is best prised out of vendors by leveraging the power of major contracts in competitive tendering. India’s US $10 billion multi-role fighter tender, in which the MoD has stipulated --- and vendors have accepted --- the transfer of heavily guarded AESA radar technology, provides the ideal model for obtaining technology.

Instead, offsets must have the clearly stated aim of furthering the defence minister’s oft-enunciated objective of indigenising at least 70% of our defence equipment needs. The MoD must abandon its timid, hands-off approach towards offsets and direct vendors towards carefully identified Indian companies with demonstrated technological skills in key areas. Offset partnerships with global giants would allow such companies to bridge technology gaps and --- by becoming a part of the vendor’s global supply chain --- scale up and generate the financial muscle needed for serious R&D.

For this, the MoD must empower and staff its Defence Offsets Facilitation Agency (DOFA), so that it can map Indian defence industry, creating a capability and technology matrix that can be matched with prospective platform development requirements. Offsets could then be directed to fill the gaps. This would involve an enormous MoD mind shift from its current approach towards offsets where a man-and-a-dog DOFA plays passing-the-offsets-parcel with an equally reluctant Acquisitions Wing, both hoping that when the music stops the other will be left holding the responsibility for offsets.

The need for an activist and empowered DOFA has been understood by industry, if not by the MoD. The CII and FICCI had earlier pledged Rs 25 lakhs each to set up a DOFA secretariat at Pragati Maidan, which could monitor and account for the tens of thousands of crores worth of offsets that lay ahead. But, with trust in short supply, the MoD felt that the companies that would benefit from offsets should not have any role in accounting for them; and the corporates felt, “why should we do the babus’ job for them?” It is time to come together to galvanise India’s defence industry.
 
.
5261115606_0dc21fab74_o.jpg

A U.S. Navy F/A-18 Hornet pilot positions the aircraft for refueling from a KC-10 Extender Nov. 25, 2010, over Southwest Asia. The KC-10 is with the 908th Expeditionary Air Refueling Squadron. (U.S. Air Force photo/Staff Sgt. Andy M. Kin)​
 
.
India’s MMRCA contract may force defence offsets policy change : Defense news

The Indian MoD may be forced to bring in an offsets multiplier clause in its defence offsets policy to conclude the estimated $10 billion procurement of 126 Medium Multi-Role Combat Aircraft (MMRCA). At least two of the six bidders have demanded offset multipliers to bring in technology for fulfilling the 50% offsets amounting to about $5 billion.


The Indian MoD has started the process of a likely policy change by holding discussions with industry bodies such the Confederation of Indian Industry (CII) and the Associated Chambers of Commerce & Industry (ASSOCHAM). The discussions held last week between senior MoD officials dealing with procurement matters and the industry representatives were mixed with some in favor of a more liberal policy and others wanting a continuation of the present policy, industry sources told Defenseworld.net.

“The 50% offsets for the MMRCA cannot be fulfilled under the present policy of direct offsets”, said the industry source pointing out that international vendors have a pool of just about 160 companies including 9 government-owned firms to choose from as potential offset partners. From the private companies, only those which have been granted an industrial licence to manufacture a particular defence equipment or system can be partnered with.

India’s DPP holds out the possibility of bringing in offset multipliers. The present policy states, “the advisability of giving additional weights to offers having multiplier effects in terms of exports generated or building indigenous capability in strategic technology products, or other issues may be considered after reviewing the experience of implementing the above (existing) policy”.

For fulfilling the 50% direct offsets as per the MMRCA contract, international vendors would need to bring in high technology defence product manufacturing to India and find suitable partners to implement them. As things stand, private Indian firms are at the beginning of the defence equipment manufacturing curve and will take years before they are capable of executing an important sub-system of a fighter aircraft or armored vehicle. In the military aircraft domain, Hindustan Aeronautics Limited (HAL) is the only option and here too it has limitations in areas such as engines.

In this context, a letter written by the aerospace and defence industry associations of the U.S., Canada, France, Germany and the U.K. in September to India’s defence minister A.K. Antony demanding the offsets multiplier clause besides other concessions gains significance. All the MMRCA bidders with the exception of the Russian Mikoyan MiG, are members of the associations which have authored the letter.

Offset multipliers will enable the MMRCA contract winner to partner with India’s Defence Research and Development Organzation (DRDO) to develop technology in areas which the DRDO is currently lacking in and claim multiplier effects. However, DRDO is not included in the list of Indian offset partners and the potential policy change may have to address this issue too.
 
.
Eurofighter Tranche 3​


RSAF_Typhoon-300x181.jpg


Tranche 3 Eurofighters will be the most capable aircraft in the 3rd stage program, which will incorporate full strike built in capabilities.Tranche 3 Eurofighters would be massively upgraded from the Tranche 1 and 2 versions. Eurofighter wants to convert the aircraft from a highly specialist air-to-air fighter into a multirole deep strike electronic warfare plane that is capable of locating and destroying any powerful enemy air-defence network.

It also would be incorporating an AESA radar. In 2008, EADS submitted a range of procurement options to the aircraft’s launch customers like Britain, Germany, Italy and Spain with the intention of offering them flexibility by dividing promised Tranche 3 orders over time.

The production version of the CAPTOR-E radar was being proposed as part of Tranche 3 of the Typhoon from 2012. Tranche 2 aircraft use the non AESA, mechanically scanned Captor-M which incorporates weight and space provisions for possible upgrade to CAESAR (AESA) standard in the future.

The Italian Air Force doubted that the AESA radar would be ready in time for Tranche 3 production.In July 2010, Eurofighter announced that the AESA radar would enter service in 2015.



Eurofighter Tranche 3 | Defence Aviation
 
.
does it will make any fever of Rafale
Talks with UAE ongoing to buy French Rafale jets

By admin at 16 December, 2010, 3:04 am

SOURCE : Reuters

Talks between the United Arab Emirates and France over the sale of French Rafale fighter jets are still ongoing despite recent tensions, the French president’s office said on Wednesday.

A senior French official told Reuters in early October that the United Arab Emirates had suspended talks to buy 60 Rafales, but Abu Dhabi Crown Prince Mohammed bin Zayed al-Nahyan and President Nicolas Sarkozy discussed the potential deal over lunch in Paris, an official at Sarkozy’s office said.

“The discussions have not been broken off,” he said.
 
. . . . .
I feel 126 typhoon or Rafale looks kind a more mightier than 170+f18 (or)
180+grippen
 
Last edited:
.
does it will make any fever of Rafale

Don't think so, because the problem is not the Rafale deal (they are willing to pay, if Dassault make some custom changes for them), but that the UAE asks for way more than just France to take over the M2K-9s and things that are not related to the military field.

What I find more interesting in the regard of UAE is, that the RAF EFs that came to India for an exercise, also went to UAE, which could be a hint that they want to offer EF for them instead of Rafale too.
EF would be way better to put pressure on Dassault than the F18SH, because the SH offers not much more for them, that the F16 B60 already offers (US AESA radar, avionics, weapon package...). The Rafale is also the same weightclass like the F16s and both are meant mainly for strikes, while the EF is an air superiority fighter above the F16s and would be the better combo than Rafale/F16. The EF consortium for sure would offer UAE a custom version and UAE would be more than ready to pay for it.

The partners are very desperate at the moment and UAE is a possible way out of their problems, will be interesting to see how France would react.
 
.
WikiLeaks: U.S. officials pushed Brazil to buy Boeing fighters


WASHINGTON — Recently released confidential and secret cables show that U.S. diplomats have sought to help orchestrate the sale of about $4.4 billion worth of Boeing fighter jets to Brazil, but the French aerospace industry, a longtime Boeing nemesis, may have the inside track.

The cables, released online by WikiLeaks, offer an inside look at how U.S. officials sometimes act as super-salesmen in promoting American products abroad. They also give a glimpse of the behind-the-scenes diplomatic intrigue that the United States, France and others engage in as they court such emerging powerhouse nations as Brazil.

Boeing is caught in the middle, as a simple sale of planes carries international ramifications. It's not an unusual position for Boeing and other major U.S. exporters to find themselves in.

Over the years, Boeing often has been a pawn in the U.S. relationship with China. When Chinese leaders are angry with the U.S., they place multibillion-dollar plane orders with France-based Airbus, Boeing's chief rival in the commercial jet market. When relations thaw, Boeing receives an order.

In Brazil, Boeing's F/A-18 Super Hornet is competing with the Rafale, built by France's Dassault Aviation, and the Gripen, from Swedish company Saab AB.

But according to the diplomatic cables, Boeing also was competing with French President Nicolas Sarkozy, whose "charm offensive" apparently had seduced Brazilian President Luiz Inacio Lula da Silva. Lula has been an outspoken champion of the French Rafale, even though many in Brazil's military support an F/A-18 purchase.

One cable from the U.S. Embassy in Paris to the State Department said the Sarkozy-Lula relationship was a "love fest," with the French president using the fighter jet sale as a model for French entree into Latin America and beyond.

Brazil recently signed a $12 billion deal with the French for five submarines, including a nuclear one, and 50 helicopters, the cable noted. The subs will be built at a new shipyard in Brazil.

Sarkozy has been "courting populous nonaligned nations to extend French influence worldwide," and Brazil was a top priority, the cable said.

The cables are part of a WikiLeaks cache of more than 250,000 State Department documents, many of them classified secret or confidential, that are being posted gradually on the WikiLeaks website. So far, fewer than 2,000 of the documents have been made public.

Boeing declined to comment on the cables and its effort to sell F/A-18s in Brazil.

"This is a matter for the U.S. State Department that involves confidential government correspondence, and Boeing has no comment at this time," said Phil Carder, a Boeing spokesman in St. Louis, where the F/A-18s are built.

Defense analysts say the backroom diplomacy over the Brazilian fighter jet sale isn't unusual. U.S. firms such as Caterpillar and Intel sometimes find themselves in the same situation as Boeing.

"There is always some French guy in the alley handing out money," said Loren Thompson of the Lexington Institute, a northern Virginia national security research center. "It's easier for the French to sell in developing countries because they can be more flexible."

Brazil wants to buy 36 jet fighters, which it will call the FX2. The deal eventually could involve 100 planes. Announcement of the contract winner is expected early next year.

Brazil currently has 110 aging jet fighters to patrol 5 million square miles, including most of the Amazon Basin and a vast new offshore oil field, the cable from the Paris U.S. Embassy said. While it didn't call it a Latin American arms race, the cable noted that Chile has 29 advanced F-16s and Venezuela 24 modern Sukhoi 30s.

Referring to Venezuela's president, the cable said, "With Hugo Chavez recently buying over $3 billion in aircraft, tanks and assault weapons from Russia, Brazil also seeks to enhance its regional military capabilities."

As the competition heated up early last year, the U.S. Embassy in Brasilia urged high-ranking U.S. officials to become more involved and to press the case for the F/A-18. A cable to the State Department in early January 2009 noted that the only one buying the Rafale was the French air force.

"French representatives have tried to spin the Rafale's dismal performance in the global market to be the result of U.S. government political pressure rather than the aircraft's shortcomings," the cable said, adding that the FX2 decision will only "marginally be based on price and Brazil is most interested in using the purchase to bolster its domestic defense industry."

Several months later, another cable from the embassy in Brasilia warned that U.S. government support for the F/A-18 sale was "lukewarm at best," as the Rafale sale was being managed "directly" out of Sarkozy's Cabinet and support for the Gripen came from the ministerial level in Sweden.

"We need to take steps to erode the French political edge," the cable said.

The cable also said there were Brazilian concerns that even if the F/A-18 were selected, the State Department would block the sale because it involved the export of sensitive technology, and financing could become an issue because the U.S. Export-Import Bank can't finance defense sales.

By the summer of 2009, President Barack Obama had raised the issue with Lula, and other U.S. officials, including Secretary of State Hillary Clinton and James Jones, the national security adviser at the time, had weighed in with the Brazilians.

In the fall of 2009, with a visit to Brazil by Sarkozy looming, the U.S. Embassy in Brasilia was getting skittish again. Sarkozy had met with Lula four times in 2008, and in 2009 the two also held four meetings.

The Brazilians also were wondering whether the U.S. decision to block the sale of Embraer's Super Tucano to Venezuela because it carried sensitive U.S. technology was a sign that there would be problems with the export of F/A-18s. Embraer is Brazil's largest aerospace company, and the Super Tucano is a turboprop light attack aircraft.

By the beginning of this year, the Brazilians were expressing renewed interest in the F/A-18.

"There remains, however, the formidable obstacle of convincing Lula," said a January cable from the embassy in Brasilia.

The USS Carl Vinson, carrying a deck full of F/A-18 Super Hornets, arrived in Rio de Janeiro in February in what was seen as an effort by the U.S. to show off the Boeing jet fighter.

A cable in early February said the FX2 sale came up during a meeting between new U.S. Ambassador Thomas Shannon and Brazil's deputy foreign minister.

That's where the trail of WikiLeaks' released cables ends.



Read more: WikiLeaks: U.S. officials pushed Brazil to buy Boeing fighters | McClatchy
 
.
Defense analysts say the backroom diplomacy over the Brazilian fighter jet sale isn't unusual. U.S. firms such as Caterpillar and Intel sometimes find themselves in the same situation as Boeing.
"There is always some French guy in the alley handing out money," said Loren Thompson of the Lexington Institute, a northern Virginia national security research center. "It's easier for the French to sell in developing countries because they can be more flexible."

I'm not surprised by this comment, recently Olivier Dassault approached the French National Assembly to legalize payment of commissions 'bribes' to secure arms contracts.He also made it known that it will be difficult to sell the Rafale internationally without the payment of commissions.


Le député UMP Olivier Dassault, fils du président de Dassault Aviation Serge Dassault, se déclare favorable au paiement de commissions dans les contrats d'armement, pourtant interdites par l'OCDE.Dassault cherche depuis des années à placer son avion de combat Rafale à l'international, en vain pour l'instant.

Le député UMP Olivier Dassault veut rétablir les commissions, actualité Economie : Le Point
 
Last edited:
.
Tech Transfer Issues Could Hold Up Indian Fighter Buy | AVIATION WEEK

Evidence is growing that the downselect decision for India’s Medium Multi-Role Combat Aircraft (MMRCA) may not be announced until the fourth quarter of 2011, with the holdup centered on terms for technology transfer.

India requires that any aircraft or weapons system introduced into service successfully clear all tests, trials and evaluations. All the MMRCA candidates have completed user trials, including weapons validations, technical and maintenance evaluations. They are currently being evaluated on their proposals for industrial offsets, with technology transfer next up. Only when this process produces a short list will their commercial offers be evaluated.

Technology transfer terms must be completed with the main contract, a defense official explained. India requires that licensed production of the aircraft, including engines, accessories, radars, systems and tooling, be covered by the tech transfer proposal. The ministry holds refusal rights on any specific item and suppliers must provide full life-cycle product support.

The MMRCA contract will provide for 126 aircraft and is the largest military procurement pending in India. It has drawn bids based on the MiG-35, Dassault’s Rafale, Eurofighter, the Saab Gripen, Boeing’s F/A-18E/F and Lockheed Martin’s F-16.

Vendors, who were supposed to have their evaluations completed last April, have already been required to extend or revise their bids through next April because the selection process became bogged down. If the defense ministry is not able to complete its downselect process by then, vendors will have to resubmit their bids and another year’s delay will ensue.

That raises the prospect that swings in currency rates could significantly change the value of the bids, given that rates are determined not when bids are received but when the commercial evaluation begins.
 
. .
Status
Not open for further replies.

Pakistan Affairs Latest Posts

Back
Top Bottom