Detail lies in hidden costs

Rafale may have won the contest for the supply of Medium Multi-Role Combat Aircraft to India, but there’s a strong possibility that we will end up paying far, far more than the bid amount. It appears that Rafale had quoted an unrealistically low amount to win the contract.

After Rafale won India’s Multi-Role Fighter aircraft contest in February this year and the deadline given to its manufactures Dassault to submit the final documents expired last week, one would think that having no international orders since its first flight 21 years back, Dassault would have bent over backwards and produced the required documentation in time. But nothing was submitted. Behind this simple lapse lies a very complex story — one that should make every Indian taxpayer pay much more attention to how the Defence Ministry spends its money.

The Rafale story has just one ending: India will not receive even half the technology that was promised by Dassault in the company’s “100 per cent” claim, and the cost of the plane is likely to escalate by well over 100 per cent, by conservative estimates.

The Defence Ministry’s think-tank, the Institute for Defence Studies and Analyses, was the first to defend the missed deadline — variously claiming mischief, pointing to interested parties, and then going on to assert that no matter what the delays or cost, Rafale’s induction was a national priority. It gave a whole host of bogus reasons and cyclic logic that only a Government servant could think up. Ultimately this is the same line used to defend the disastrous NREGA scheme where ‘need’ trumps demonstrated failure.

There is a very sound logic to the delay. Having underpriced the Rafale in the initial bidding, France has no option but to look for ways of cost escalation in order to make a profit. This is exactly what happened with the Scorpene submarines and the Russian Gorshkov carrier, which were offered at ludicrously low prices, precisely to pre-empt the competition, and since then have seen anywhere between 200 and 2000 per cent escalation. One would reckon that with a 2000 per cent budgetary overshoot at the Defence Ministry, some babu’s heads would roll or at the very least some lessons would have been learnt? Evidently not. At some point, some one really needs to have a long hard look at whether the IAS officers— like all products of standards tests, truly are as monumentally incompetent as their actions reveal or if, in fact, this is graft masquerading around as ineptitude and shielded by a lack of accountability.

While the IDSA was busy defending the deal, a little known French publication was spilling the beans, pretty much predicting the course of the entire Rafale procurement. L’usine nouvelle reported that Dassault was now convinced that India did not have the technological expertise to indigenise the Rafale’s production and well over 50 per cent of the production would remain in France — including the all-important Active Electronically Scanned Array radar. Evidently in the five years that the Medium Multi-Role Combat Airraft competition dragged on, France did not see this deficiency — promising us a full 100 per cent technology transfer. Even at that time the high foreign content of the Rafale was deliberately concealed, especially the seven per cent of it which comes under the US International Traffic in Arms Regulations controls, which means India, will not even be allowed to open the boxes in which those components are housed. Now, within six months of winning the contract based on such promises they have already determined that India cannot cope with such advanced 21-year-old technology.

Hindustan Aeronautics Limited and Defence Research and Development Organisation are typical socialist enterprises — not required to perform, they merely provide useless employment for the uselessly educated. Since there are no guidelines or timeframes for research translating into tangible products, they are yet to produce a single operational weapons system. Their research and development being done without competent market research, much of their attention is diverted to answering questions no one asked.

The deciding factor that won the Rafale the competition was its lower cost. Even a cursory glance at the Rafale’s costing for the French Senate done in 2009 indicated a unit price 2.25 times of what the French quoted us, not factoring in inflation. Now given that all this knowledge was public, when quality control is highly suspect, when your grocer sells you ‘premium basmati’ at 1/3rd the market price, it takes a real specimen to not step back and ask, “Why”? Even after costing the country a full 2000 per cent in hidden costs over the Gorshkov, evidently South Block mandarins do not involve themselves in such trivial details so long as they get their D1 flats, Gymkhana memberships and chauffeur-driven cars. Honestly living that life you could be excused for thinking public money grows on trees.

What can one expect from here? Four things: First, Dassault’s final submission will take much longer to materialise — possibly another year or so. Second, a stream of news reports that we’ve already heard a thousand times before will come out telling us how unprepared our institutions are to receive this technology. Third, when that document from Dassault does indeed materialise, expect a minimum 170 per cent jump in costs attributed to “time delay”, “unforeseen problems” and “supply chain variables”. Let’s not forget that, when this competition started out in 2007 the deal was meant to cost us $10.6 billion. Now the figure has already doubled to $20 billion, while any intelligent person who bothered studying the publicly available costs would have fixed the price at $27 billion as far back as 2009. Finally, India will not achieve self-sufficiency in combat aviation any time this century — after all, if standardised tests produce bureaucrats this daft, HAL and DRDO’s similarly standardised test scientists can hardly be expected to be much better?

At some point, one needs to introspect very deeply. This is a complex societal matrix of woe combining a broken education system, a complete lack of governance, a total lack of accountability, institutional collapse, a worrying lack of innovation, introspection and self-correction all leading up to near total intellectual ossification. And you think simplistic solutions like the Lokpal would work?

Lol as my friend at work like to tell me : “You mad? :D”

Rafale M configurations

A quick come back on the10 years of Rafale M service ceremony that took place on July 11.
Besides the beautiful tail paintjob on the Rafale M32, the static display was also the occation to show the various configurations available on the jet (exept for the ASMPA config). A rare opportunity that the photographers from Delta Reflex didn’t miss :

Follow the link to see amazing pictures and more.

http://www.militaryphotos.net/forums/showthread.php?137433-Rafale-News/page255

Thanks to Olybrius at militaryphotos.net for finding such gems :).

http://www.militaryphotos.net/forums/showthread.php?137433-Rafale-News/page255

Rafale: a challenge for the French aerospace industry

The Rafale contract with India is a prestigious victory for Dassault againts its competitors, but above all the guarantee of several years of work for the production lines of the Rafale’s team (Dassault- Thales – Safran ) and its subcontractors ( 7,000 direct and indirect employees). The fighter, almost entirely “Made in France “, employs nearly 500 SMEs in several French regions.

The center fuselage is made at ​​Argenteuil (Val d’Oise), Ile-de-France, flight controls at Argonay (Haute-Savoie), wings in carbon fiber at Martignas-sur-Jalle (Gironde) and avionics in the factory of Thales Haillan (Gironde). The final assembly site, is located in Merignac (Gironde). In such times of crisis, the contract is a breath of fresh air for the aerospace industry and the French economy as a whole even if of the 126 units planned, only 18 will be made ​​in France and shipped to India.

“A large part of the agreement, if signed, will no doubt benefit the Indian economy,” says an expert on aerospace contracts. First and foremost is the public company Hindustan Aeronautics Limited (HAL), approached to assemble the Rafale.

A pessimism swept under the table by the French manufacturer. “The gains will not match the production of 126 Rafale made in France, but not just the construction of a few copies either,” says Eric Trappier, vice president in charge of Dassault Aviation International. Specifically, the technology transfer should be done gradually, Dassault and its subcontractors continue to provide parts for a large portion of the aircraft assembled in India.

Another facet of the contract concerns the tenders to come (Brazil, UAE, Qatar). In arriving for the first time to export the Rafale after several spectacular failures in recent years (in Singapore, the Netherlands, Australia, Saudi Arabia and Morocco), Dassault gain credibility with potential customers. “It’s a domino effect, describes a specialist in aviation negotiations. The most difficult thing is to win the first contract. Then everything goes … “

Rafale MMRCA Deal: Last Minute Glitches?

13:45 GMT, August 30, 2012 Media reports recently surfaced stating that the Indian Air Force’s (IAF’s) Medium Multi-Role Combat Aircraft (MMRCA) deal, which had zeroed in on the French Dassault Rafale as the fighter of choice leading to commencement of exclusive negotiations with Dassault for finalising the contract, is far from final. These reports have been attributed to parties that do have a poker in the fire: Germany, which backed the Eurofighter Typhoon; and, Russia whose MiG-35 was also in the competition. German sources claim that there have been discussions between German and Indian officials on the issue and a re-worked offer for the Eurofighter Typhoon may be in the process of being finalised. For their part, Russian sources have claimed that there is strong likelihood of the tender for the MMRCA being refloated by the Indian Government.[1]

POSSIBLE EUROPEAN COMPULSIONS

The majority of European economies continue to be in trouble, with Spain following Greece into financial grief. Italy meanwhile remains on the brink of collapse. The healthier economies of the Eurozone, France and Germany, are hard pressed to support the weaker economies recover their health. While these two economies are healthier, they are by no means anywhere near the robustness of their heyday.[2] In this context, the $10 billion MMRCA contract is indeed a juicy prize. As noted in an earlier commentary about the Rafale on this website, the final contract value with all options exercised could go up to $ 20 billion. European defence industries facing a slowdown in domestic orders due to economic and financial woes could be expected to do their utmost to win this Indian contract by any means possible as it could be the lifeline that ensures their survival.

IAF’S MMRCA SELECTION PROCESS

The IAF put the six contenders through a very rigorous evaluation process and assessing them against over 600 specific parameters. It is reasonably certain that the IAF’s final selection of the Rafale and Typhoon from among the MiG-35, Gripen, F-16IN “Viper”, F-18E/F “Super Hornet”, Typhoon and Rafale is technically very sound and that the aircraft that best meets the IAF’s current and future operational requirements has been selected. Earlier disappointment expressed by the United States on the rejection of their F-16 and F-18 fighters from the competition was dealt with firmly by the Indian Government. This was despite US attempts to link the selection of an American aircraft with a possible wider strategic partnership and transfer of other advanced technology to India. Thus far, the Government of India (GoI) and IAF have been very firm on carrying out a transparent and technically correct selection of the aircraft best suited to the MMRCA requirement, which is exactly as it should be. IAF faces a multitude of challenges in the current security scenario and requires the induction of capabilities suited to effectively meeting these challenges. The Rafale deal is especially important as it is IAF’s best bet to stem and even reverse the recent and continuous fall in the combat aircraft squadrons fielded; these have reportedly fallen from a high of 39.5 Squadrons to about 32 Squadrons at present.[3]

URGENCY OF INDUCTION

Delays in the Rafale program are not in the IAF’s or the nation’s interest. Hence, it is hoped that the Ministry of Defence (MoD), IAF and GoI will continue to maintain that the negotiations are on track, and attempt to close the deal at an early date to facilitate early induction of the new aircraft.

The French are likely to negotiate hard to maximise their benefits. While, based upon information available in the public domain, it is not possible to comment on the veracity of the recent German and Russian statements on the subject, there should be similar pressure on the French negotiators to successfully close the deal given the European economic situation. In addition, the fact that the Rafale has yet to find a non-French customer should be leveraged by Indian negotiators to push for an early closure on favourable terms. The payoffs to the French of a hotly contested and purely technical merits-based selection of the Rafale over other comparable aircraft could be a useful point in negotiations as this selection, followed by a sale to India, could open the floodgates for Rafale exports to other countries, giving France considerable medium and long term benefits.

IMPORTANCE OF AN EARLY CLOSURE OF THE DEAL

It is imperative that the IAF, MoD, and GoI stand united in staying clear of the canards being spread by interested parties to sabotage the Rafale deal for their own financial benefit. Today the Rafale is important for IAF and the nation and anything that delays the induction of the MMRCA would go against the National Interest. IAF’s falling squadron strength must be arrested at the earliest and with the LCA still at Initial Operational Clearance (IOC) stage and yet to achieve Final Operational Clearance (FOC),[4] the Rafale is the best bet for this. In any event, even with the LCA at FOC capability would not have capabilities offered by the Rafale. By design, LCA was to form the light and lower end of the IAF fighter mix, with MMRCA filling the Medium slot, and the Su-30MKI filling the heavy slot. One illustrative parameter of comparison in this regard is that while Rafale will field an Active Electronically Scanned Antenna (AESA) Radar, the LCA will in all likelihood come at least initially with a mechanically scanned radar which too is not ready as of now. So the Rafale is very important for IAF at the current time and all attention must be focussed on an early finalisation of the commercial contract. It should be kept in mind that building of the first aircraft against the India order would commence only after the contract is inked and delays in the latter would delay the delivery of the first aircraft accordingly. Also delayed at the same time would be the establishment of the assembly line in India for building the license production batch of aircraft. Indian negotiators must push for manufacture of all components and sub-components of the Rafale in India. This is important because the import of any sub-components or components would not only entail delay but also introduce possible political and sanction pressure points etc. The current time is the most suited for India since power in the current global economic situation lies with the buyer. Economies of scale and higher cost of making small batches of such components or sub-components could be an argument for opting for import of these. Here, it should be kept in mind that non-availability of an aircraft for a mission carries a far higher cost that those imposed by lack of economies of scale. IAF must have full control over its technology. This can be achieved only through complete manufacture of its equipment within India.

CONCLUSION

The IAF today faces a depleted number of fighter squadrons. Its plans to stem the fall in numbers hinge to a large extent on the timely induction of Rafale even as the LCA slowly progresses towards FOC. The GoI, MoD and IAF must press ahead towards an early closure of the contract so that aircraft are inducted at an early date.

Dassault Rafale C 134 , Zhukovsky airshow:

http://www.air-actualites.com/diaporama/08-2012-russie/
http://www.airplane-pictures.net/photo/231217/134-france-air-force-dassault-rafale-c/