COVER STORY: THE MMRCA – DECISION EXPECTED SOON.
28th Jan 2011
Latest information from New Delhi indicates that the Government's decision-making processes are entering their final stages. In late August 2007, the Indian Ministry of Defence issued the much awaited Request for Proposal (RFP) for procurement of 126 Medium Multi Role Combat Aircraft (MMRCA) for the Indian Air Force, whose combat squadron strength is now below 33. This is well below the government-authorised level of 39.5 squadrons. The cost of the proposal was projected at Rs. 42, 000 crore (approximately US$ 10.2 billion at 2007 average exchange rate). The 211-page document was issued to six global vendors - Russia's MIG-35 (RAC MiG single seat version); Swedish JAS-39 (Gripen); Dassault Rafale (France); American F-16 Falcon (Lockheed Martin) and Boeing's F/A-18 Super Hornet and Eurofighter Typhoon (made by a consortium of British, German, Spanish and Italian firms).
As per the RFP, the first 18 aircraft will come in a 'fly away' condition, while the remaining 108 will be manufactured in India by the state-owned Hindustan Aeronautics Ltd (HAL) under a Transfer of Technology (ToT) agreement. To give a further fillip to the domestic defence industry, the offset requirement has been increased from normal 30 per cent to 50 per cent. In other words, offsets worth over US$ 5 billion are to be ploughed back to Indian industry during the MMRCA's supply period. In a first, the RFP has stipulated life-time maintenance support cost of the aircraft as one of the conditions for final selection of vendor. In other words, the cost of owing and operating the aircraft for the next 40 years (the time period as mentioned in the RFP), would be the determining factor for final selection of the technically qualified vendors.
To ward off controversy - which is often a common feature in India's big defence acquisitions - the MMRCA contest has been widely promoted as being "competitive, fair and transparent." According to the MoD, "greater care has been taken to ensure that only determinable factors, which do not lend themselves to any subjectivity, are included in the commercial selection." For this, the US$10 billion plus contract, dubbed the "mother of all deals", is being subjected to the provisions of the MoD's Defence Procurement Procedures (DPP), which stipulates time-lines for each stage of procurement, detailed rules of procurement and empowers various acquisition functionaries in the armed forces, MoD and other governmental bodies, to perform their respective assignments.
As per DPP provisions, the tender documents submitted by the participating vendors are to be evaluated by the IAF's technical team, followed by the extensive field trials to validate the performance with respect to operational and other requirements stipulated in the RFP. Once the IAF shortlists the vendors based on technical and trial evaluations, the MoD would then compare the commercial proposals of shortlisted vendors. Based on the commercial examination, the vendor which quotes the lowest amount is to be awarded the contract. The award of the contract is however subject to the vendor's undertaking that it would undertake the necessary offset-related work in stipulated time frame.
THE CONTENDERS: ADVANTAGES AND DISADVANAGES
Among the six contenders, Boeing F/A-18E/F Super Hornet, MIG-35 French Dassault Rafale, and Eurofighter Typhoon are twin-engined, while the others (Gripen and F-16) are single engine fighters. In terms of cost, the first three - Super Hornet, Rafael and Typhoon - come with a bigger unit price tag in the range of US$ 65-129 million, while the others are relatively cheaper in the range of US$ 25-50 million. All the aircraft possess distinct advantage and disadvantage, in terms of cost, technology, and other factors. It is noteworthy that given such a big contract, New Delhi may not simply go by techno-commercial parameters. In stead, it may look at broader strategic interest and industrial benefits which serve it in the long run.
F/A-18 Super Hornet: Boeing, which has recently made a great stride in Indian defence market – by signing or in the process of signing several high profile contracts including P8I maritime reconnaissance aircraft (US$2.14 billion), C-17 Globemaster (US$ 5.8 billion) – is hoping to add the most coveted of all contacts. The Super Hornet, a substantially upgraded version of the earlier model F/A-18 A-D Hornet, boasts of "true multi-role aircraft, able to perform virtually every mission in the tactical spectrum, including air superiority, day/night strike with precision-guided weapons, fighter escort, close air support, suppression of enemy air defences, maritime strike, reconnaissance, forward air control and tanker missions".
Entering service with the US Navy in 1999, the Super Hornet is powered by two GE F414-GE-400 engines. Boeing received a shot in the arm when the GE F414 engine was selected over the European rival's EJ-200 for an order of 99 units for the indigenous LCA Mk-II. Boeing would be hopeful that New Delhi's engine selection is the precursor to its own victory in the multi billion-dollar competition. In addition to powerful engines, the Super Hornet integrates APG-79 AESA radar, Advanced Targeting Forward Looking Infrared (ATFLIR) system, Joint Helmet Mounted Cueing System (JHMCS), Multifunctional Information Distribution System (MIDS), advanced high capacity computer system, and state-of-the-art cockpit. India would be the third country after the US and Australia to fly this aircraft, and only the second country after the US where a production line would be established.
Although deeper strategic bonhomie between New Delhi and Washington in recent years might have allayed India's long-held distrust with US as a reliable arms supplier, Boeing may find it constrained with respect to cost and performance parameters. Grouped along with Eurofighter and Rafale in the higher price bracket, the US vendor would find it difficult to supply 126 aircrafts within the RFP-stipulated price. In terms of technology, the Super Hornet, according to some reports, "offers poorer aerodynamic performance than the Eurofighter or Rafale, due to inherent airframe limitations." Besides, compared to other non-US vendors, who seem to be generous in their industrial offers to India, Boeing's technology transfer offer may not be that exciting to India because of the inherent stringency of US arms export control rules.
Rafale: In a surprise move in 2006, the French pulled out the Mirage-2000-5, and threw Rafale in the MMRCA contest, hoping that its brand new production line would be an added advantage. The biggest advantage of Rafale lies in its compatibility with the Mirage - of which the IAF operates around 51. The other advantages that Rafale has are its superior aerodynamic performance, compatibility for carrier-borne operations (if it is so required as per the RFP), and optional extended range through conformal fuel tanks. Pitched as an "onminrole" fighter, the French aircraft will be integrated with Thales RBE2 AESA radar, which is still in the developmental stage and be operational from 2012. Having been fielded in real combat situation in Afghanistan, Rafale claims super-cruise speed with its Snecma R88-2 engines, although sceptics prefer to reserve their comments.
The disadvantage of Rafale is its cost and relatively unproven stature. The IAF would also keep in mind - while doing the cost benefit analysis – the difficulty of integrating non-French weapons on to Rafale. Similarly, the yet to be developed AESA radar does not add to its strength, considering that some other contenders have already developed theirs. Rafale's lack of success in the export market - despite some valiant attempts - would also be at the back of mind of IAF. It is to be noted that the French aircraft received a bitter lesson in an international competition when Boeing's F-15 defeated Rafale in a closely watched Singaporean fighter competition in 2005.
Eurofighter Typhoon: With the backing of four participating nations, Eurofigher Typhoon joined MMRCA competition, as the "most advanced new generation multi-role/swing-role combat aircraft" in its class. With an impressive order book of 707 aircraft from six counties (Austria, Germany, Italy, Saudi Arabia, Spain and UK), and as the largest collaborative programme in Europe, Typhoon's bet lies in its long production line, supercruise capability (without using afterburners), beyond visual range combat ability, and also the huge concessional offer to India. To sweeten its Indian bid, it has offered a very comprehensive industrial package, including a promise to create 20,000 high-skilled jobs in India. In a significant development, the board members of the aircraft consortium met for the first time in New Delhi in October 2010, and proposed "to the potential Indian partners additional opportunities for industrial and technological cooperation."
Although the recent media reports suggest that Typhoon has emerged as the frontrunner along with Rafale after IAF's technical and field-trial evaluation, there are still enough reasons for the consortium to remain worried. The biggest setback came when the Indian MoD selected GE engines for powering the LCA Naval aircraft in stead of EJ200, which happens to be the engine of Typhoon. Although the recent positive media reports have brought back some confidence, Typhoon also suffers the same problem as the Super Hornet and Rafale, namely issues relating to cost and weight. In addition, the yet to be integrated METEOR BVRAAM is something the IAF would ponder over – though this is not considered a fundamental problem.
MiG-35: Incorporating additional developmental features of the MiG-29K/KUB and MiG-29M/M2 fighters, - both of which are in Indian armed forces – the single seat version of the MiG-35 offers the best compatibility with the IAF inventory. When the aircraft was displayed at Aero India 2007 in Bangalore, it was not only the first time that the full version of the Russian aircraft was displayed at an international event, but it went on to generate a lot of interest throughout the country. In comparison with the MiG-29 K which the Indian Navy is process of inducting, the MiG-35 is no doubt a better fighter, with much improved performance. It is fitted with newly rolled-out Phazotron Zhuk-AE AESA radar (considered to be the best among all MMRCA competitors), a unique Optronic locator system (OLS), LCD multi function displays, and an improved, 'smokeless' thrust vectored RD-33 MK engine. Given Russia's long-standing strategic partnership and its industrial and technological offer, the MiG-35 is believed to be a strong contender.
The biggest weakness of MiG-35 is its yet-to-open production line, which is critically dependent on the Indian order. Other weaknesses include India's desire to diversify its supply sources and Russia's poor track record on after-sales support.
Gripen IN: Projected as "the world's most advanced multi role fighter aircraft", the Swedish Saab's Gripen IN, a variant of the next generation Gripen, joined the MMRCA competition as the most cost efficient alternative that meets "all current and future requirements of the IAF." The big advantage of the aircraft lies in Saab's industrial offer to the Indian industry. Saab has in fact proposed a "comprehensive Transfer of Technology programme, ensuring access and transfer of technology to enable India to manage all aspects of the life cycle cost." Technologically, the Indian offer of the fighter, which would powered by GE F414G engine, comes with increased combat range and endurance, additional weapons carriage capability, increased payload, fully integrated advanced sensors and weapons fusion, including AESA radar and freedom of choice in weapons and sensors.
The biggest drawback of Gripen IN may not necessarily lie with its technological capability, rather geo-politics. Unlike in the cases of other MMRCA contenders, the Swedish government has comparatively little geo-political influence in India, which could be a determining factor against it, if New Delhi bases its decision on strategic reasons. Technologically also Gripen suffers from doubts on capability of its AESA radar, and the fighter's range. Indian decision makers will take into account Gripen's limited success in the international market, where the aircraft has been sold in relatively small numbers. The IAF will also be mindful of the aircraft's American parts and components - including the GE engine - and the likely constraints of Saab in obtaining US approval for transferring those elements to Indian industry.
F-16 IN Super Viper: Lockheed Martin's offer of the F-16IN Super Viper is no doubt a tempting one for the IAF. With an envious production figure of more than 4,400 F-16s for 25 countries (with further orders of 53 from 14 users), the Lockheed Martin's F-16 boasts all the required combat and operational virtues. Besides, with a "heritage" with the world's only fifth generation fighters – Lockheed Martin's F-22 Raptor and F-35 Lightning II Joint Strike Fighter, the Super Viper offers India a chance to obtain some of the best technologies available in world. In term of advanced features, the Super Viper comes with Northrop Grumman APG-80 AESA radar – the only operational AESA radar in the international market today – and possesses net-centric warfare capability. Its all-digital glass cockpit, advanced survivability features and high thrust engine (GE F110-132A), relatively lower initial cost of procurement (around US$ 30 million per unit) makes it one of the strongest contenders in the MMRCA competition. To sweeten its Indian offer, Lockheed Martin has also proposed the naval version of the F-35 JSF to the Indian navy. This is something that India can hardly ignore, given its expanding maritime interest. Like its American counterpart, Boeing, Lockheed Martin also enjoys the backing of the US government.
Despite its strengths, the F-16IN Super Viper has also equally strong weakness. The first and foremost weakness - although not in terms of combat capability of the plane - is the Pakistan factor. Although Lockheed Martin has emphatically projected the difference between its offers to two South Asian arch rivals, it does not seem the IAF is totally convinced. The other weakness of the F-16 is its aging production line. In 2006, the US CRS report has stated that "after decades of successful production, the F-16 production line appears to be approaching its end "¦ and could close in 2008", unless export order of 36 or more are available each year to keep the line open.
MMRCA BID: TECHNO-ECONOMICS VS. GEO-POLITICS
The MMRCA contact poses the biggest challenge yet faced by the Indian MoD in terms of making a decision between pure techno-economics and broader issues of geo-politics. For the first time in the Defence Ministry's procurement history such a big contract has been put to competitive contracting, in which the winner would be selected based on both technical parameters and cost efficiency. In other words, the final vendor will be the one which meets the technical requirements as mentioned in the RFP and also whose cost is cheapest among all the technically qualified contenders. So far the procurement process has gone as per the provisions of Defence Procurement Procedure (DPP). What is remaining of the contest is the final commercial decision which will be taken by MoD. According to Air Chief Marshal P. V. Naik, the IAF "has submitted the MMRCA (technical and trial) report with the defence ministry on July 30, 2010 and if everything goes of well, then the contract should be signed by July 30 2011." The MoD's decision is however subject to approval of the Cabinet Committee on Security (CCS) - which comprises of Prime Minster and Ministers of Finance, Defence, Home and External Affairs and which is responsible for ultimate decision regarding India's national security. The CCS is also responsible for final approval of all defence contracts valued beyond Rs. 1,000 crore (approximately US$ 242 million).
Notwithstanding the DPP provisions - which specifies among others things the best value for money - the MMRCA contract is widely believed to be decided on geo-political factors, and India's long term strategic interests. This is the reason why the heads of states from the competing companies' countries have made a beeline for New Delhi towards the end 2010 – a crucial period in MMRCA selection - and made various statements highly favourable to India's long term strategic interests. This started with British Prime Minister David Cameron's visit in July 2010 when he strongly reiterated his country's support for "India to take the seat it deserves in the UN Security Council." The biggest strategic gain for New Delhi came when President Barack Obama while addressing the joint session of Indian parliament on 8th November, also extended US support for India's membership of the UNSC. In addition, Obama also made some other strategic announcements during his Indian visit, including removal of Indian companies from the US sanctions list and easing of export controls for trade in high-tech items between the two countries. Two other heads of state who followed Obama – President Sarkozy (France) and President Medvedev (Russia) - also extended their support for India's aspiration to assume a larger role in global affairs including in the UNSC.
WINNER OR WINNERS
If the IAF chief's words are accurate, the MMRCA contract will most likely be signed in July 2011, nearly four years after the RFP was issued.The first delivery will start in about three years from the date of signing of the contract. The important question of course is who will finally win the multi-billion contract. Although the firm picture would emerge only after the official declaration, rumours are plenty about the winner(s). As mentioned earlier, Eurofighter and Rafale are rumoured to be the frontrunners after the trial evaluation stage. The other story is that MoD may split the contract between two vendors. Although the DPP does not allow split of contract among the lowest and second lowest vendors, the Cabinet Committee on Security is empowered to do so based on its collective wisdom (read geo-political grounds). Doubts about the pending final decision aside, one thing which is certain is that whoever wins the contract will have a long term economic and political relation with India.
http://www.defencereviewasia.com/articles/71/The-MMRCA-decision-expected-soon