Know Your 'Rafale'

PaliwalWarrior

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Govt has allocated some 3200o odd crores for IAF capital acquisition budget

now point to note & think over

This is the same amount as last year

this does not only include fresh deals

it also includes payments on delivery as per contract for purchase deals signed earlier and deliveries happening now (eg Su30, mirage upgrade jaguar upgrade mig29 upgrade etcetc )

IAF did not return any money as unspent from capital account last year

Last year it was said that there was shortage of funds due to existing commitments for signing Rafale deal

this year no pre commited deal payments have come down

the allocation is same as last year

it is not possible to spend 15000 odd crores as signing amount for rafale deal

the govt has annnounced that a decision will be made by MArch at the latest on rafale & so unless more ad hoc provisions are made down the year for rafale by the govt by way of supplemantary grants thru parliament ........................................
 

akshay m

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livefist says

Livefist @livefist · 20m 20 minutes ago
Sources: HAL-Dassault meetings lined up this week to fix Rafale licensee-licensor issues and evolve damages/guarantee arrangement. #MMRCA
 

PaliwalWarrior

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livefist says
there is a furthur shocker

the budget allocations for capital expenditure for Aircrafts & Aeroengines is only rs 18886 odd crores out of total capex of rs 31000 crores of IAF

can IAF pay 15000 crorres for signing Rafale deal out of its total aircraft & engines purchase budget of Rs 18800 odd crores ?
 

Punya Pratap

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What concerns me the most is that there is no separate allocation for capital acquisition like Rafale in the defence budget??

The finance Minister has hiked the defence budget for FY 2015-16 by 9.46 per cent to Rs 2,46,727 crore, which is Rs 23,357 crore more than the revised estimates for the current financial year that stand at Rs 2,22,370 crore. This small increase is grossly inadequate to give a boost to military modernisation that has been stagnating for over a decade.

In the budget for FY 2014-15 presented in July 2014, Finance Minister Arun Jaitley had increased the allocation for defence by 12.5 per cent over the amount allotted for 2013-14. The minister had hiked the defence outlay from Rs 2,03,672 crore (Revised Estimates – RE) in 2013-14 to Rs 2,29,000 crore (Budgetary Estimates – BE) for 2014-15. The defence budget for the current financial year stands at a low 1.74 per cent of India's projected GDP for 2014-15 and accounts for 12.75 per cent of the country's total government expenditure.

While presenting the budget, the Finance Minister had said, "Modernisation of the armed forces is critical to enable them to play their role effectively in the defence of India's strategic interests." However, the increase of Rs 25,328 crore in the allocation – partially neutralised by the high annual inflation rate that still hovers between 6 and 7 per cent, the steep fall in the value of the rupee against the US dollar vis-à-vis the traditional rise in the global prices of arms – was insufficient to give a major boost to the military modernisation that is necessary to meet the emerging threats and challenges.

The total revenue expenditure planned for 2014-15 was Rs 1,34,412 crore (approximately 60 per cent of the budget). This goes towards paying salaries and allowances and expenditure on ration, ammunition and transportation. The remaining amount of Rs 94,588 crore (40 per cent of the budget) was allotted on the capital account for the acquisition of modern weapon systems and equipment. Various consultancy firms have estimated that India will spend approximately US$ 100 billion over the 12th (2012-17) and 13th (2017-22) five-year defence plans on military modernisation.

The Army has begun the raising of 17 Corps, designated as a mountain strike corps, which is expected to cost Rs 64,000 crore over seven years. Major acquisitions of weapon platforms that have been pending for long include initial payments for 126 multi-mission, medium-range combat aircraft (MMRCA), 197 light helicopters, 145 Ultra-light Howitzers, 15 Apache attack helicopters and 22 CH-47F Chinook medium lift helicopters, C-17 heavy-lift aircraft and frigates and submarines. The armed forces must also upgrade their command and control systems and substantially improve their intelligence, surveillance and target acquisition capabilities if they are to become proficient in launching effect-based operations in a network-centric environment riddled with threats to cyber security.

In a letter to Prime Minister Manmohan Singh in March 2012, the COAS, General V K Singh, now MoS, External Affairs, had pointed out the 'critical hollowness' of defence preparedness. Ever since the Kargil conflict in 1999, when 50,000 rounds of Bofors medium artillery ammunition had to be imported in a hurry from South Africa, the ammunition holdings of the Army have been reported to be too low to fight and win a sustained war. Many other deficiencies in the holdings of important weapons and equipment need to be made up.

While China has been engaged in rapidly implementing new rail, road and airfield projects in Tibet so as to reduce the deployment timings of the People's Liberation Army (PLA) and enhance operational logistics, India's development of infrastructure along the border with China has made relatively little progress. As many as 14 strategic rail projects have been pending due to resource constraints. These shortcomings need to be made up quickly to avoid military embarrassment in a future conflict.

The announcement made in the budget speech to raise the ceiling for FDI in joint ventures (JVs) for the manufacture of weapons and defence equipment from 26 to 49 per cent had fallen far short of the expectations of the defence MNCs. They would have preferred to have a majority stake of at least 51 per cent. That would have made investment in defence manufacture in India worthwhile for them.

The Department of Industrial Policy and Promotion had proposed an increase in the FDI limit in the defence sector from 26 per cent to 49 per cent without the transfer of technology (ToT), up to 74 per cent with ToT, both with FIPB approval, and up to 100 per cent in the case of the transfer of state-of-the-art technologies with prior approval of the Union Cabinet. However, the Ministry of Defence, the defence PSUs and the CII and FICCI, the two powerful of chambers of commerce, had expressed their reservations on giving controlling interest to MNCs.

While inaugurating the biennial air show Aero-India 2015 at Bengaluru on February 18, Prime Minister Narendra Modi said he did not like the fact that India is the world's largest importer of weapon systems. With the NDA government's second budget approaching, the Prime Minister said in the era of shrinking defence budgets India could become a global manufacturing and export hub for arms and defence equipment.

The Prime Minister invited defence MNCs to join hands with Indian public and private sector companies to "make in India" and reiterated the government's willingness to allow FDI in defence beyond the stipulated 49 per cent for projects involving the transfer of cutting-edge technologies. He pointed out that the reduction in dependence on defence imports from 70 to 40 per cent in five years would create 100,000 to 120,000 highly skilled jobs, boost investment, reduce costs and upgrade India's manufacturing and system integration skills. In short, a gradual shift in the defence acquisition policy to manufacturing in India will provide huge economic benefits.
 

grampiguy

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Is all the money being paid in a single shot. I mean 15000 crores ??
Yup, that's the signing amount. The whole deal will get into lakhs of crores..and break and wreck the Indian defence budget for 2 decades in future.
 

PaliwalWarrior

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Is all the money being paid in a single shot. I mean 15000 crores ??
nope, It may be transferred to French for next 5 to 10 years
well yes

the total deal size is estimated to be around more than 1 lac crore

15% is the down payment / signing amount to be paid at the signing of the contract

so 15000 crores has to be paid at one go at the time of signing of the contract

the balance 85000 crore + has to be paid at contracted time intervals over a period of 7-10 years
 

sgarg

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Funny posts. There is NO Rafale contract yet. GOI has no clarity if any contract will be signed in this fin year. How will FM plan for this purchase?? Clearly no amount is earmarked to Rafale.

The money budgeted for current running programs like Su-30, LCA, Mirage-2000 upgrade etc.

The amount budgeted is sufficient to cover planned purchases (which are already approved by DAC).

There is a major focus on acquisition of artillery, SAM systems, Naval ships etc. which is visible in the allocations.
 

PaliwalWarrior

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you mean the total contact value is $100 billions


somebody order me a Coffee Please

well here are a few conversion basics

1 million = 10 lacs

1 billion = 1000 millions

1 billion = 10000 lacs

so now

1 million dollars = 10,00,000 dollars

1 billion dollars = 1,00,00,00,000 dollars

so

1 billion dollars * 62 rs = rupee value of 1 billion dollars

1,00,00,00,000 *62 = 62,00,00,00,000 rupees / 1,00,00,000 (crores) = 6200 crores

so
1 billion dollars = 6200 crores rupees

now lets take deal size as 20 billion dollars

now 15% of 20 billion dollars is 3 billion dollars

3 billion dollars = rs 6200 cr *3 = 18600 crore rupees
 

PaliwalWarrior

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Funny posts. There is NO Rafale contract yet. GOI has no clarity if any contract will be signed in this fin year. How will FM plan for this purchase?? Clearly no amount is earmarked to Rafale.

The money budgeted for current running programs like Su-30, LCA, Mirage-2000 upgrade etc.

The amount budgeted is sufficient to cover planned purchases (which are already approved by DAC).

There is a major focus on acquisition of artillery, SAM systems, Naval ships etc. which is visible in the allocations.

your first sentences contradict with your last sentences

first you say it is funny posts because contracts have not been signed for rafale and hence provision not made

but in your last line you infer from increased budget allocations (read contracts not signed) that there is a major focus on artillary sam & naval ships

arent these contradicting logic u r using ?

anyways

FM does not budget for individual programs - Def Min does - FM just allocates funds - which arm which program to spend them on is Def Min job

so it seems that Def Min did not ask for rafale funds

if def min did not ask for funds in this year budget what does it mean ?
it is not easy to get sanctions for 15000 - 19000 crore additional funds mid year - for that too the govt would need to go to parliament and get approval for supplemantary grants

now
govt plans to take a decision on rafale by march end / april
this budget gets approved by march & eefective april

next parliament session in july/ august
 

PaliwalWarrior

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@PaliwalWarrior

Sorry what you are trying to say $100 billion's equal to 1 lakh crore
sorry you dont get it

i am trying to say is

rafale deal estimated at 20 billion dollars

now

1 billlion dollars = 6200 crores rupees

20 billion dollars = 124000 crore rupees

15% down payment of 20 billion dollars is 3 billion dollars

3 billion dollars = 18600 crores rupees
which is the amount we need to pay dasault at the time of signing the rafale deal/contract

rest of the 17 billion dollars = 105400 crore ( at todays exchange rate of 62 rupees a dollar ) needs to be paid over the next 7-10 years
 
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smestarz

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Govt has allocated some 3200o odd crores for IAF capital acquisition budget

now point to note & think over

This is the same amount as last year

this does not only include fresh deals

it also includes payments on delivery as per contract for purchase deals signed earlier and deliveries happening now (eg Su30, mirage upgrade jaguar upgrade mig29 upgrade etcetc )

IAF did not return any money as unspent from capital account last year

Last year it was said that there was shortage of funds due to existing commitments for signing Rafale deal

this year no pre commited deal payments have come down

the allocation is same as last year

it is not possible to spend 15000 odd crores as signing amount for rafale deal

the govt has annnounced that a decision will be made by MArch at the latest on rafale & so unless more ad hoc provisions are made down the year for rafale by the govt by way of supplemantary grants thru parliament ........................................
And out of these Rs 3400 crore will go for Spares of Su-30 MKI, hahahaha.
Rafale deal is dead in water. there is possibility that India could buy some Rafale but off the shelf but at much lower price. it is better to go for separate ToT
 

cobra commando

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HAL, Dassault to be 'Joint Prime Contractors' in Rafale MMRCA Deal: Eric Trappier

Dassault Aviation and Hindustan Aeronautics Limited (HAL) will be 'joint prime contractors' to manufacture 118 Rafale fighters in India clearing the way as to who will assume responsibility for timely delivery and quality of the aircraft. Negotiations between Indian MoD and Dassault have been deadlocked over the past three years over various issues, many of which have been cleared but assuming responsibility for the aircraft made in India was considered the major stumbling block. The decision on naming both companies' as 'joint prime contractors' was described by Dassault chief executive Eric Trappier as a 'new development' implying that it may have been arrived at during the last few days or weeks. If this is correct, then the last big hurdle to clear the US$20billion deal is on its way to be ironed out. Dassault as well as the Indian MoD are keen to decide on the deal before the visit of Indian Prime Minister Narendra Modi to France in April where contract is likely to be signed. Trappier, who had accompanied French President François Hollande on a visit to Dassault's factory in Bordeaux today was quoted as saying in French media reports that he expects a second Rafale contract this year in addition to the one signed with Egypt. "India existed before the Egyptian contract, so we must continue talks with India, and we know they will be long. We must also talk to other countries that have shown interest in the Rafale since the Egyptian contract, and we must neglect no lead," Hollande said in a speech to Dassault employees as quoted in the French media.
HAL, Dassault to be 'Joint Prime Contractors' in Rafale MMRCA Deal: Eric Trappier
 

Lions Of Punjab

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Terminate the Rafale Deal


Chief of Air Staff Air Chief Marshal Arup Raha has repeatedly and publicly declared "there's no Plan B", that in effect it is Rafale or nothing with respect to the Indian Air Force's dubious Medium Multi-Role Combat Aircraft (MMRCA) requirement. It merits his dismissal from service, because these words denote gross incompetence, failure to anticipate the unexpected and prepare for it—axiomatic in all military planning and, hence, of leadership. For every plan there is always an alternative plan of action in case things don't work out as envisaged.

The absence of a fallback scheme is, of course, a ruse by Raha to pressurise the government into acceding to IAF's wishes for the Rafale, despite defence minister Manohar Parrikar spelling out an alternative—the cost-effective, Nasik-produced Su-30MKI, which won't require multi-billion dollar investment in another production facility and beats the French combat aircraft by any performance standard.

The prohibitive cost and questionable fighting qualities of the Rafale apart, the unwillingness of the French consortium headed by Dassault to guarantee the aircraft licence manufactured by Hindustan Aeronautics Ltd. (HAL), and to fully meet transfer of technology (TOT) obligations involving Indian public and private sector entities directly or by way of offsets, too, are factors of serious concern. Source codes, flight control laws, and "black box" technologies, including all aspects of the engine, advanced sensors and avionics are likely to be left out of any TOT agreement or worse, paid for but not delivered, if previous defence deals are any guide. Dassault plans on supplying critical components and technologies for the entire production run of the "Indian-made" Rafale to ensure massive recurring profits, whence its insistence that its novice Indian partner, Reliance Aerospace, be part of the local production cycle. One other aspect is equally worrying. HAL assembling Rafale may face the kind of troubles Mazgaon Dockyard Ltd. is experiencing with the French Scorpene submarine where French vendors are delaying the supply of material and hence delaying induction and raising the direct and indirect costs.

The Price Negotiation Committees (PNCs) instituted by the defence ministry to hammer out contracts with foreign firms are to blame for such flawed transactions. Voluminous contracts are drawn up—the Rafale document reportedly exceeds 1,500 pages—but the use of indistinct language deliberately leaves large enough loopholes for even middling technologies, what to speak of the more sensitive "know why" knowledge, to be legitimately denied even as the suppliers pocket the monies the defence ministry is quick to disburse in full at the start. The PNCs need investigating, particularly for the vast leakage of the national wealth through this route.

A recent visit to HAL facilities by Dassault officials is a pointer to things to come. They complained to the US-based Defense News about the low productivity of HAL workforce and lack of economies of scale to argue that Indian-built Rafales will be costlier. Besides indicating that defence PSUs are not proficient in even the low-end screwdriver technology, the French hinted at further escalation of realistic cost beyond the presently estimated $30-$35 billion!

Flawed contracts drafted by PNCs that do not insist on penalties for time and cost overruns, and on staggered payments to fit delivery schedules, moreover, substantiate the fear repeatedly voiced by this analyst, of manipulation of assembly kits and spares supply, for foreign/economic policy reasons by France to ground the IAF squadrons at any time, is real. Such apprehensions are sought to be doused by Paris claiming that owing to TOT India will achieve "industrial autonomy". But considering the guaranteed high level of French content in the supposedly "indigenous" Rafales, this is a laughable claim.

There are operational reasons as well why Rafale will be a liability. The IAF has always been wary of buying foreign aircraft accessible to its Pakistani counterpart. This was a reason for the rejection of F-16s as MMRCA given that they outfit the Pakistan Air Force (PAF) strike squadrons. Now consider this: Dassault is cock-a-hoop about the likely purchase by Qatar of some 66 Rafales. The Qatari Air Force (QAF) has traditionally been run by PAF pilots, with the understanding that these squadrons will switch to PAF use in any conflict with India. So, IAF Rafales will go up against Pakistani-flown Qatari Rafales that potentially will be better equipped and periodically upgraded with more sophisticated sensors, avionics, and weapons that Saudi Arabia will happily finance, as it did the $500 million deal for PAF's F-16s and Pakistan's acquisition of nuclear weapons and missile technologies from China. The Gulf regimes, after all, consider the Pakistan military their palace guard.

And, Rafales cannot be effectively used against China either. Why? Because, firstly, it will not survive sophisticated Chinese air defence; secondly, Dassault won't allow the indigenous Brahmos supersonic cruise missile to take out targets inside China from standoff range to be integrated with it; and thirdly, because the Rafale is a compromised system for another reason. Pakistan is the prime conduit for Western military, especially aerospace, technologies to China. A Qatari Rafale will be disassembled in Pakistan for Chinese engineers to scrutinise, or wing its way to a Chengdu Aircraft Industry Groupsite for its best features and technologies to be reverse-engineered and incorporated in Chinese combat aircraft, and otherwise permit the Chinese military to familiarise itself with its technical weaknesses and configure appropriate counter-measures and counter-tactics.

Every demerit attends on the Rafale aircraft deal, including its outrageous cost and negligible effects in growing a self-sufficient Indian defence industry. It should be terminated also because of the country's meagre resources—the capital defence budget of `94,588 crore for 2015-16 remains unchanged from last year, and careful inter se choices will have to be made from among myriad military procurement programmes. In the competition for the defence rupee, the Rafale is eminently expendable. It is time Parrikar told IAF, using the words of former US defence secretary Robert Gates, that "there's no endless money". If a Rafale deal is still signed to crown Narendra Modi's April 10 visit to France, the government will have much to answer for.

Terminate the Rafale Deal | idrw.org
 

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