MMRCA contract will not be signed soon
The Medium Multi-Role Combat Aircraft (MMRCA) contract for 126 aircraft will not get signed during the tenure of Prime Minister Manmohan Singh’s government. All available indicators firmly suggest this. The selection of Dassault Aviation’s Rafale aircraft as Lowest-1 was announced on 31 January 2012.

The present government really has stretched time till end of this year before the nation catches up with the General Elections fever, and the Election Commission imposes its code of conduct disallowing the government to sign an upwards of USD 12 billion defence contract. The work that still needs to be done is enormous, and given the pace at which negotiations have moved, it appears nigh impossible to wrap them in the allocated time-frame. Unless, of course, a miracle happens. And this government is not known to pull rabbits out of the hat.

Top government sources have told FORCE that talks for negotiating the final cost have still not been arrived at. These negotiations are complex and will be different from the life cycle cost; instead it includes all the deliverables that Dassault is supposed to provide to the IAF in addition to 18 fighters in flyaway condition, of which 12 will be single-seater and six will be twin-seater. These deliverables would be in the form of actual training, training tools and simulators etc. Only once the final cost is sealed, the documents would be sent to the ministry of finance for its approval, after which the last step will be the clearance by the cabinet committee on security headed by the Prime Minister.

The IAF, unfortunately, does not have a Plan B. If Plan A, which is signing of the MMRCA does not happen this year, it would be in real trouble with depleted force levels unable to credibly accomplish the tasks at hand. The IAF hopes that it would be god-sent if the budgeting for the MMRCA contract is kept aside from the present financial year. And the actual signing of the contract could then be done in the financial year starting 1 April 2014.

This will not be easy. At the heart of the MMRCA problem is the simple truth: the Original Equipment Manufacturer (OEM), Dassault Aviation and Hindustan Aeronautics Limited (HAL) as the prime vendor have not been able to resolve their differences. According to knowledgeable sources, HAL had nearly agreed to bilateral negotiations, when suddenly it made a turn-around and demanded that it be made responsible for manufacturing the optoelectronics and electronic warfare equipment for the MMRCA. Considering HAL has little experience and expertise in these nuanced fields, the OEM had suggested that these be done by Bharat Electronics Limited (BEL), another Public Sector Undertaking (PSU). Some progress was made in this, but then HAL was not willing to let go the entire cake. This complicated matters. This issue is just the flavour of what is going on. Insiders opine that the matter will not get resolved in a hurry. Few sources even wonder if HAL has been egged on by defence ministry bigwigs to adopt the difficult posture, possibly to push the OEM into a corner to make extraordinary concessions.


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