The case of the acquisition of 126 medium multi-role combat aircraft (MMRCA) for which the Indian Air Force (IAF) zeroed in on the French Rafale, has been termed as the “mother of all defence deals”. With a requirement of $25 billion ( Rs. 1,50,000 crore) to fund the project, this deal is sure to make a considerable dent in the Indian defence budget. Of course, it would be a significant boost to the French coffers, especially in the context of the economic difficulties the nation is facing. The IAF desperately needs these aircraft to restore its operational edge in the region. With older aircraft being phased out,the strength of the combat fleet in the IAF has been steadily dwindling from the authorised figure of 39.5 combat squadrons and today, the IAF has ‘lost’ nearly a quarter of its strength.

The continuing changes in the geopolitical scenario in the world, and specifically in the region, have necessitated a re-examination of doctrinal perceptions. With the turn of the century, the IAF, which was for long considered as a tactical force maintained just to support the Army and the Navy, decided to finally shed the misconception with reequipping plans to be an effective strategic aerospace force. The plans were in harmony with the then Prime Minister’s statement made in the context of economic revival and the fact that the strategic boundaries of the nation now extended from the Middle East to the Strait of Malacca. Air Chief Marshal F.H. Major, former Chief of the Air Staff (CAS), on the eve of the Platinum Jubilee of the IAF in 2007, had also stated, “Given the Indian situation, our concerns and aspirations, a strong and comprehensive aerospace capability is an inescapable necessity.” The ‘comprehensive capability’ that he spoke about, encompasses long-reach, all-weather, precision-based, networked and space-enabled resources. The proposed acquisition of the MMRCA was a step in this direction. Notwithstanding the recent acquisition of Su-30MKI aircraft in large numbers, which has multiplied the capability of delivering ordnance, the capability increase nevertheless, needs augmentation of numbers too!

Case for the MMRCA

The IAF issued a request for information (RFI) for 126 MMRCA in 2001, but began pursuing it much later. After delays lasting almost two years beyond the planned December 2005 issue date, the Ministry of Defence (MoD) announced a formal request for proposal (RFP) only in August 2007. The blame for the delay cannot however be placed solely at the MoD’s door as many other causes contributed in equal measure. The requirements for an enhanced strike capability with an extended range to meet out-of-area contingencies; the understanding of the new offset policy introduced in 2005 and revised subsequently and the hectic behind-the-scene political lobbying by the nations in contention, all had a role to play in the delay.

Defence acquisitions, more so aircraft acquisitions, have a long gestation period. When planning the purchase of an aircraft, threat perception and utilisation are not the only criteria to be considered. The life-cycle of the aircraft in terms of total technical life and the maintenance support for sustenance through it, is equally important to calculate the cost. It is probably for the first time that the IAF has, before placing an order, calculated the life-cycle cost over around 40 years, with maintenance requirements to be met for the entire service life, be it through transfer of technology or otherwise. The planning exercise for such calculations is time consuming. The buyer and the seller both have to put their minds to this mammoth exercise. The vendors in this case were given six months to submit their proposals in response to the RFP, a 211-page document.

During the Aero India Airshow in February 2011 at Yelahanka, Bengaluru, the fighter aircraft manufacturers of the world were on tenterhooks, even as they displayed their aircraft, awaiting the results of the evaluation process that were to be announced in June. The MoD, after having studied the massive volumes of technical and flight evaluation data compiled by the IAF, finally shortlisted the Dassault Rafale and the Eurofighter Typhoon. The expected aftershocks began soon thereafter. One really does not know if the resignation of the American Ambassador to India the very next day of the announcement of the chosen two aircraft, which did not include the American aircraft in the running, F-16 or the F-18, was a mere coincidence. The others too, who were rejected, expressed disapproval of India’s choices, albeit at a comparative low-key! The choices however were arrived at entirely and exclusively, on the painstaking and thorough appraisal through comprehensive trials conducted by IAF test pilots. Other elements of the proposal, namely, transfer of technology, chosen offsets and the costs were not considered at all at this stage.

The next step of opening the commercial bids of the two manufacturers along with negotiations for offsets, transfer of technology and reduction in cost of aircraft and maintenance supplies, commenced soon thereafter. While the need to sign the contract as early as possible, but on completion of the necessary negotiations, was not lost sight of, it goes to the credit of the IAF, knowing that the Defence Procurement Procedure (DPP) is a game for the patient, to have followed each step scrupulously, lest it faces delays at a later date. On January 31, 2012, the MoD announced the Dassault Rafale as the final choice for exclusive negotiations. The Dassault Rafale was selected against the Eurofighter Typhoon due to its lower unit cost, lower overall life-cycle cost, lower fuel consumption and simpler maintenance requirements.

A Stumbling Block

After January 2012, it was expected that procedural approvals would be soon gotten, before the contract would be inked; but, alas, it was not to be. While the case progressed for the Defence Minister’s approval and the Finance Minister’s consent, before the final blessings of the Cabinet Committee on Security (CCS), a Member of Parliament (MP) from a regional party of South India questioned the procedure followed. He wrote to the Defence Minister on February 27, 2012, alleging lapses in the evaluation and costing process followed to select the lowest bidder. The complainant, as quoted on the site, www.indiatoday.in on March 13, 2012, wrote in his letter, “The alleged manipulation of the evaluation process in picking the L-1 contractor, which resulted in a decision to procure 126 MMRCA, has raised serious apprehensions not only across the country but also worldwide. If a proper decision is not taken, the country’s credibility will be at stake.” The intentions and the integrity of the complainant are not in doubt. However, one would definitely like to know the sources of his allegations, his personal knowledge of the DPP and the impact that his complaint could have on national security preparedness, should the deal be delayed indefinitely or cancelled in toto.

An independent committee of three observers, which included a former high-ranking Finance and Defence Ministry bureaucrat, appointed by the Central Vigilance Commission (CVC), submitted its report to the MoD. The Committee reported that the IAF had followed the procedure, as stipulated in the DPP, to the letter. The IAF expected the process of finalising the contract to be hastened, to make up for the delay caused, but the negotiations continue to move at an unaccountably slow pace; the contract is yet to be signed, though sources in the IAF are optimistic for a December 2014 deadline.

Imponderables Ahead?

What if it does not happen? Even after more than two years of negotiations for the final contract, which includes transfer of technology and offsets, there seems little assurance notwithstanding the optimism in various media writings and high-profile visits by French politicians. The MMRCA contract calls for 18 aircraft to be delivered in a flyaway condition between the third and the fourth year of the contract being signed and the balance 108 to be manufactured under licence by the Hindustan Aeronautics Limited (HAL) between the fourth and the eleventh year. If the contract is signed in 2014-15, then going by the planned timelines, the earliest the Rafale can fly in the IAF colours will be sometimes in 2017-18, but only ‘if’- till then what?

With the continuing phasing out of the vintage fleets of the MiG series due to obsolescence, and delay in acquisitions, the IAF plan to have 42 squadrons by 2022 has taken a hit. Presently, it is down to 32 squadrons. Of the around 640 combat jets that the IAF has in its fleet, over 200 are MiG-21s. By the present calculations of the life span of the MiG series, the aircraft are due to be retired from service by 2019. The Bison, at best, can be stretched to a few years more. Thus, with the progressive phasing out of aircraft, the strength would further reduce to about 30 squadrons or even less, if no fresh inductions take place in the fighter fleet. Coupled with this delay is the disturbing news of the delay in the upgrade of the Jaguar strike aircraft to “Darin III” standards and the re-engining of the aircraft by at least a couple of years. Under original plans, HAL was scheduled to complete the $520 million upgrade activity by December 2017.

Notwithstanding the optimism from all quarters, there are impediments in the smooth finalisation of the MMRCA contract. HAL is to assume full responsibility for the timely preparation of its infrastructure and state it in the document. The other Indian manufacturers who would be collaborating with Dassault and HAL for the production of the systems, sub-systems and accessories will also have to get their act together to meet the deadlines of the contract. Reportedly, more than 50 per cent of the subcontract negotiations are over; hopefully the remainder too would see finalisation before the end of 2014-15.

While the final lap is in sight, the rivals, earlier eliminated from the race, are again generating a lot of heat and dust. The British Foreign Secretary, William Hague, in his recent visit, lobbied hard for the Eurofighter Typhoon during his meetings with the present government. Germany too, is reportedly pushing for the Typhoon. Similarly, the United States too harbours the hope for either of its aircraft to fly back into the MMRCA competition, as a part of the ‘wooing plan’ for Prime Minister Narendra Modi’s visit. (The visit, however, would well be over, by the time this writing goes into print.)

The Indian defence establishment however seems to be quite clear that there can be “no comebacks” in the ongoing MMRCA project. There are only two possibilities—one, the deal is inked or it is not. In the remote and unlikely possibility of the latter happening, the entire MMRCA process would have to be scrapped, after being in the works for more than a decade, with a fresh global tender or RFP being issued. The cancellation of the deal can prove to be a terrible blow to the operational capability of the IAF.

The Government has displayed its intent on acquisitions, with some hard decisions in recent meetings with which the confidence and optimism levels for an early conclusion of the contract have risen. It is for the establishment to match it and not let the IAF down.