India: Defense Projects in the Next Government’s Lap
Parliamentary elections are around the corner and the bad news is that almost all the big defense deals are going to be halted. These include tenders for purchase of 126 multirole fighter aircraft, new artillery systems, 197 light helicopters worth $480 million and six submarines worth $10.7 billion.
Ultimately this means, Indian military planners will not receive 126 MMRCA fighter aircraft. The process started with the IAF projecting a requirement to replace the aging MiG-21 fleet. A total of 126 fighters were to join the IAF over a period of 10 years and remain in service for over three decades. The bidders included six leading aviation firms from the US, Europe and Russia. French firm Dassault Aviation emerged as the lowest bidder. But even after two years the contract is yet to be signed. Meanwhile the cost of the aircraft has increased. After quoting a price of Rs 373-Rs 400 crore in January 2012, Dassault is now asking for a cost of Rs746 crore which is significantly higher that the Eurofighter bid for Rs 497-Rs 528 crore. Now with elections around the corner, there is a strong probability that the Defense Ministry may put the deal in cold storage until after the general elections are over in May of this year.
As per the Election Commission’s code of conduct, government departments cannot award new contracts within 45 days of the announcement of an election. Meanwhile Dassault was to provide 18 of the 126 planes in a fly away condition while HAL was to manufacture the other 108 under license in Bangalore.
Dassault now claims that it would not be responsible for delays and other problems for planes built in India. This is unacceptable to the Indian authorities who want the French firm to accept responsibility for all the planes produced under its brand. This also gives rise to a tricky question. Would the French continue to provide spare parts and ammunition to India in case of war?
The delay in the receipt of the MMRCA fighter jets is affecting the IAF’s operational preparedness. The IAF has had to upgrade and extend the operational life of its aging aircrafts. The IAF seemingly has paid a heavy price due to delays. Ever since the cancellation of the AW101 helicopter deal, the government has also put on hold the acquisition of 197 light utility helicopters (LUH) that were to replace the vintage Cheetah/Chetaks. Similarly a $3 billion deal to acquire 56 transport aircraft to replace the antiquated HS-748 and Avro transport aircraft is in limbo. Another deal to purchase six A330 Twin-engine Multirole Tanker Transport Aircraft for midair refueling has been delayed due to the death of a senior official.
Airbus Military is competing with Russian Ilyushin IL 78 Midas for this project. The IAF needs this badly as it can also be used as a transporter for 300 troops and 45 tons cargo or accommodate 130 casualty evacuation stretchers. Against a sanctioned strength of 42 fighter squadrons IAF has only 34 — each with 20 aircraft. Six squadrons are still using aging MiG-21 fighters. This is when all types of MiGs were to be phased out and IAF was supposed to have six Jaguars, three MiG-29, three Mirage 200 and 14 Sukhoi Su-30 squadrons by 2018-20. Even if the first of the 18 MMRCAs are delivered in 2015, the remaining 108 aircraft made in India will not be available for quite some time. This means that the air force is not likely to have the desired combat strength of 50 squadrons to fight a hypothetical two front war for another decade or more.
Also stuck in the pipeline are contracts with Boeing – for 22 AH-64 Apache attack helicopters; 12 CH-47F Chinook multi-mission helicopters; a billion-dollar repeat order for four P-8I maritime aircraft, 10 C-17 Globemaster III worth $4 billion and $3-billion deal to purchase Honeywell engines to extend the service life of 100-odd Jaguars. One of the top priorities before the new government will be to resolve the MMCRA deadlock as well as sign the $1.4 billion contract for 22 Apache attack helicopters and $1 billion contract for 15 Chinook heavy-lift helicopters.
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