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Rafale proposal 'effectively dead' as Dassault bid not cheapest

PEOPLE There is still some hope left

Source Induction of Rafale will take time

The minister said negotiations over pricing and the role of HAL in inducting the French fighter aircraft, Rafale, was taking time and causing delay in going ahead with the procurement of the aircraft which has won the bid. “There are some issues with regard to HAL’s role. Will Dassault, the company that manufactures Rafale, give guarantee to HAL on the 108 aircraft that will be produced by HAL? What HAL makes should be the same as what Dassault makes. So, whether Dassault takes responsibility for the aircraft that are not directly imported but made by HAL is what we are discussing. Pricing is also an issue. We haven’t given up and we’ll be looking forward to breaking ground soon,” Singh said.
 
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Some thoughts off the corner of my table... (and an info)
1- i was told yesterday by SMS by a top brass DA executive (high enough to be in Egypt) "no worries" about shukla's reports.
2- there are presently very strong political pressure from Russia so as to scrap MMRCA.
3- I wouldn't call Shukla "payed". Biased, yes. But a journalist depends on his sources, which are themselves often biased...
4- It is not the interest of India to show too heavy commitment to MMRCA while negociating, is it?
5- Isn't there somehow a part of internal politics in all that "game", BJP wishing to show that thy do better than congress?

just a few thoughts and questionings...


Well for point 2, i agree with you as the Business Standard report by Ajai is painted all over russian news media as a victory sign for russian. Especially bcz they cite it as their reply for Mistral issues by France and they feel MKI will replcae the 200 odd birds.

For point 1,3 and 5 - the tight lipped scenario is a bit odd... You know i like this posturing by both sides. but then i dont want them to be stupid enough to either drag this endlessly or end up with ego bruised. Libya or probably Qatar is nothing as compared to MMRCA. So i feel a more genuine approach and a proper reply to baseless reports is needed with may be consent of MOD. this is to stop the negative campaign where finally the masses may get colored and always feel that the GOI had bought white elephants and political parties (read congress) may use it against the ruling Modi govt in next elections. This thought and fear may cripple the GOI also as they may like to wash off their hands for their own future. You know over coal scams this bjp as opposition crippled parliament functioning so you can expect the reciprocation from congress. especially when in rajya sabha the bjp government is in minority. And govt cannot pass all resolutions or new initiatives via ordinance route alone as it kills the democratic rights of a parliamentarian who is elected representative of people. Thus this angle is something with which Modi govt may like to project as blot free, corruption free govt in every sense.
Hence, i strongly believe Dassault needs to come out with their own campaigns to counter all this nonsense or biased views.

Point 4. well India needs MMRCA and Dassault needs Indian 200 odd (126+63) orders, So commitment is both sides need. I dont think any side can show distant commitment posturing. They cant afford it as any wrong signal may lead to more odd posturing and give fodder to dead deal mongers
 
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Dassault may abandon $20-bn MMRCA deal

Dassault Aviation, maker of Rafale fighter jet which is in exclusive negotiations with the ministry of defence for close to three years now for the $ 20-billion Medium Multi-Role Combat Aircraft (MMRCA) tender, may have to abandon the plan over lingering issues.

This is despite the fact that bagging the MMRCA tender, which envisages purchase of 126 aircraft with an option for buying 63 more, is critical for Dassault. Contrary to initial expectations of a quick contract signature, Dassault-MoD negotiations have dragged for over two years.

As reported by FE earlier, cost has been an issue since the start besides the company’s reluctance to transfer sophisticated technology to India and meet offsets requirements. In the last few months, questions have been raised by Dassault regarding the role of HAL in the MMRCA.

Moreover, the French company is unwilling to be held liable for the quality, timely and on-cost delivery of the 108 aircraft to be license produced at HAL. This is in breach of tender conditions and has emerged as a major threat to speedy contract conclusion.

Highly placed sources disclosed to FE that after being declared as L1, the French company was very much aware that as per the RFP it had responded to, “state-owned Hindustan Aeronautics was the designated production agency.” The French company had offered 22% work share for HAL at the initial stage of negotiations, as its response to the RFP was influenced by a planned partnership with Reliance Industries, that planned to expand into aerospace and defence in 2011.

Talking to FE, Air Marshal (retd) M Matheswaran, senior adviser to HAL’s management, said: “Guaranteeing HAL’s work is not the issue, but that the French are being “rigid” and refusing to stand behind the integrity of the design.”

Matheswaran, who was involved in drafting the original RFP for the deal, added: “Unfortunately, the French don’t want to be accountable in any way. However, the original equipment manufacturer has to stand guarantee with respect to design and integrity of design. By constantly denying to take responsibility for production of the 108 aircraft at HAL, the French are trying to get away from the OEM’s responsibility.” Also, it is about technology transfer, which the French are loath to do.

Dassault may abandon $20-bn MMRCA deal | The Financial Express
 
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There is thing like overdependence. You might have observed the C 17 GM III, Chinooks have Russian Substitues available.

One of prime reasons behind MMRCA was avoiding over dependence on Russia. That's also a reason we denied Mig 35.

Its all about diversifying.

So if the deal for GE414 for LCA is taken off, the over dependence will be lesser if choose Gripen or SH?

Yes, we did have issues over harrier's spares in the past from US even its a purchase from UK or AESA issue of ELTA , but nowadays things have changed so much and the newer geopolitical scenarios demand newer partners and new relationships.

India is now totally changed from a Non- Alignment country to Multi-aligned nation which is good for us in future.
 
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We will only accept the best Rafales: Minister

Written by: Dr Anantha Krishnan M Updated: Tuesday, February 17, 2015, 8:57 [IST] FacebookTwitterGoogle+CommentsMailWhatsApp Bengaluru, Feb 16: The Union Minister of State for Defence Rao Inderjit Singh said on Monday that India would only accept best Rafales fighters, but refused to put a timeline as to when the deal would finally come out of the ‘foggy weather.' To a specific question from OneIndia, posed on the sidelines of the inauguration of Aero India International Seminar (Aerospace: Vision 2020), at the NIMHANS Convention Centre in Bengaluru, the minister made it categorical that the government would insist on the full transfer of technology from Dassault, the makers of Rafale. "We would like to have the 'same standard' of what is being produced in France," the minister said. He said efforts are on to thrash out the ‘pending concerns,' which according to him cannot be termed as ‘issues.' He refused to comment when asked whether one of the concerns were that of the ‘build standards' of Hindustan Aeronautics Ltd (HAL). As per the deal, first 18 Rafales would be built in France and the remaining 108 be produced in India. "There are no issues. When we make the aircraft at HAL they (Dassault) will have to be of the same standard manufactured by the OEM," the minister said. He said the government was keen to give the Indian Air Force (IAF) pilots best flying machines. "Our capability of assembling these fighters may not be as good as the OEM (Rafale). But they should help HAL bring out machines matching what they make in France," Singh said. He admitted that the OEMs exporting defence equipment to India, might not part with their best technology so easily. He said there could be some price escalation, but refused to go into the details. "Not everything can be discussed in public," he said. To another query whether Dassault is keen to undertake the India part of manufacturing the Rafales with another company (other than HAL), the minister said the DPSU has the expertise in making modern fighters. "HAL will continue to be the strategic production line for the aircraft as inducting another company will be difficult," he said.

Read more at: We will only accept the best Rafales: Minister - Oneindia
 
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In either case, we'll know for sure by April when the PM visits France. At least the A330 MRTT deal can be expected to be formally signed on the visit.
 
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forget media forget about everything for a second the million dollar question is why three long years and still dragging feet , everyone of us have their likes and dis like but why such a long delays ? what is stopping Dassault MOD IAF HAL from cracking the deal?

Because of Dassault and Reliance!


When you go back and check the reports, especially those with official statements from Dassault or the Indian side from 2012 onwards, it gets clear how and when the deal got caught up. After selecting Rafale as L1, the Indian side hoped to fix the deal in 8 to 9 months, which obviously was overambitious as it often is in India, but Dassault made pretty good progress in that time and officials stated, that more than half of the negotiations would be done!

In Dec 2012 however things gone bad, when Dassault made up the workshare issue, openly and knowingly deviating from the RFP to gain more advantages for them and Reliance and when that didn't worked since MoD and IAF was clear about their stand on the RFP and HAL, they kept going on with seperate contracts, with seperate liability and not taking responsibility for the licence produced fighters.
Settling the workshare and contract issue alone, wasted a lot of time that could had been used to fix the rest of the offset and ToT part, but Dassault went to slow mode until these issues were not settled and with the elections in reach, it was evident that the deal was at risk at least for further delays.

Dassault was then only able to fully comply to offset requirements at the end of 2013 / early 2014 and with the elections the ToT compliance was achieved only by July 2014, while the issues on liability and responsibility went on, although the Indian point of view didn't changed, with the new government on the same line as the older and as IAF!

Indian contracts and bureaucracy is complicated, no doubt about that, but what happened since the L1 selection is solely based on Dassault (with influence of Reliance). Without these issues, the deal could had been easily signed till mid 2013 and that's the frustrating part, when a company that is advertising itself as a reliable partner for India and the IAF, is messing with such an important deal in this manner! :tsk:

However, none of this could had been changed by modifying the procedure of the tender, since anything after the L1 selection is mainly based on the fast performance of the OEM. The faster it finds Indian companies to divert offsets and get them into contracts, the faster they can comply to offset and ToT requirements of the tender. All the MoD had to do, was monitoring the improvements and judge if everything goes according to the rules and regulations.
Our part was between sending out the RFP and the selection of L1, where IAF and the MoD did there work and surely some parts could had been faster there. For example, selecting only fighters to the trials that complied to the performance requirements of IAF, or that had proper prototypes available to test. That alone could had cut the trial period, just as evaluating the results before the shortlisting in half, but that's a common problem in the forces, that they don't make proper RFPs that narrows things down, which results it too large evaluations.

5- Isn't there somehow a part of internal politics in all that "game", BJP wishing to show that thy do better than congress?

If that would be the case, they would have tried to fix the deal right away and not to delay it further, since only that would had shown that they actually can fast track things. That however is not the case, in fact they have the same problems with Dassault that the former government had too, so politically India remains steady in this deal.
 
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