India opens rival bids for huge war plane deal

India on Friday opened rival bids from France's Dassault and the Eurofighter consortium, which are competing over an estimated $12 billion contract to provide 126 fighter jets. The deal to supply war planes to fast-developing India has been fiercely fought over for four years, and the unveiling of the bids started the final phase of the decision-making process. "The bids were opened today with the contract negotiating committee and vendor representatives present to examine and evaluate the proposals to determine the lowest bidder," defence ministry spokesman Sitanshu Kar said. An official, who declined to be named, said that it could be some weeks before the successful bid is announced after the ministry has assessed the "life-cycle" maintenance costs of each plane and other contract details. The bids were not made public and the two companies declined to comment. India in April pulled a surprise by cutting out US bidders Boeing and Lockheed Martin -- much to Washington's disappointment -- as well as dropping Sweden's Saab AB and the Russian makers of the MiG 35 from the race. Dassault's Rafale plane and the Eurofighter Typhoon were both in action over Libya in recent months during the international operation to enforce a no-fly zone and protect civilians from Moamer Kadhafi's forces. James Hardy, Asia-Pacific editor of Jane's Defence Weekly, said the contract was "the single biggest competition in the global defence aviation industry at the moment." "Both aircraft... are coming off successful performances as part of the NATO air campaign in Libya," he said. "Failure here would be a major blow after both made substantial investment in promoting their platforms in India." A source for the French group, who declined to be identified, said last week that the decision "could take months if the (price) gap is narrow." Dassault's rival, Eurofighter, is produced by a consortium of Britain's BAE Systems, Italy's Finmeccanica and the European Aeronautic Defence and Space Company (EADS). The contract is for the outright purchase of 18 combat aircraft by 2012 with another 108 to be built in India with options to acquire more. Such a large order attracted strong lobbying during visits to India last year by US President Barack Obama, French President Nicolas Sarkozy, British Prime Minister David Cameron and Russian President Dmitry Medvedev. India, the biggest importer of military hardware among emerging nations, issued the request for proposals in 2007 and trials of aircraft from the six companies competing for the deal began a year later. The procurement of the fighter jets is a key part of India's military upgrade programme, aimed at securing its borders against rivals Pakistan and China. Both plane makers are relying on the contract to secure their futures amid falling defence budgets in developed markets, with Dassault also keen to sign up the first foreign buyer for its Rafale plane. Earlier this week, the US said it would be prepared to sell India the new F-35 fighter jet in an apparent attempt to re-enter the lucrative market to modernise India's military. International consultancy firm KPMG estimates New Delhi will hand out military contracts worth $112 billion by 2016. by Pratap Chakravarty (c) 2011 AFP
Related Research on

Top 20 Defense Contractor Assessments

Source: AFP
Date: Nov 4, 2011