If all goes as per plans, then India’s Ministry of Defence (MoD) should be able to ink the contract for the Dassault Aviation Rafale M-MRCA and related hardware by December 15, 2012, thereby enabling the present CAS of the IAF, ACM Norman Anil Kumar Browne, to present the M-MRCA contract to the IAF as a return gift on his birthday. Presently, the MoD’s Contracts Negotiations Committee (CNC) led by Ranjan Ghosh—Joint Secretary (Air) at the MoD—is fine-tuning five main components of the contract:
1) The acquisition cost of the 126 Rafales, including the initial 18 Rafales in flyable condition, inclusive of 12 single-seaters and six tandem-seaters; the 108 Rafales to be licence-built in India that includes 74 single-seaters and 34 tanden-seaters of which 11 will be built from semi-knocked down (SKD) kits, 31 will be built from completely knocked down (CKD) kits, and 66 made from indigenously manufactured kits (IMK).
2) The acquisition and establishment costs of creating intermediate-level and depot-level maintenance, repair and overhaul facilities for the Rafale fleet.
3) Acquisition costs for ‘unilateral upgrade’ capabilities for the Rafale fleet, which will enable the IAF to carry out in-country mid-life upgrades of the Rafale’s open-architecture avionics suite and weapon management systems, primarily with the help of operational source codes provided by Dassault Aviation and THALES Avionics for both the mission avionics suite and the fly-by-wire flight control system. It must be pointed out here that this is for the first time ever that the IAF will be the recipient for such source codes for not only the Rafale, but also for the upgraded Mirage 2000H/TH fleet, since even for the Su-30MKIs, Russia’s Rosoboronexport State Corp has refused to share the source codes with the IAF.
4) Acquisition costs for the weapons package, inclusive of beyond-visual-range air combat missiles, CALCMs, anti-ship cruise missiles, anti-radiation missiles and standoff PGMs, all to be supplied by MBDA and SAGEM.
5) Acquisition costs for two Rafale-specific full-motion tactical simulators, two fixed-base cockpit procedures trainers, two avionics part-task trainers, one aircraft systems maintenance simulator, one navigation-and-attack system maintenance simulator, and one engine maintenance simulator.
When the first 18 Rafales begin arriving 36 months after contract signature, they will be home-based at Ambala AFS.
Also being negotiated concurrently by the CNC with Dassault Aviation, THALES Avionics and SNECMA Moteurs are the terms and conditions and the cost of the direct/indirect industrial offsets, representing 50% of the total contract value and to be implemented over a period of 13 years (the time taken to licence-build the 108 Rafales). The direct offsets have been sub-divided into three levels, with the first level dealing with major assemblies and systems integration, the second level dealing with sub-assemblies and components, and the third level—constituting the biggest chunk in terms of both financial value and work effort—comprising the rotables and consumables like lubricants, washers, filters, connectors, adapters, cables and wiring harnesses, brake-pads, drag chutes, landing gear tyres, and weapons ejector racks.
The transfer-of-technology (ToT) component of the total quantum of direct industrial offsets has been sub-divided into five distinct categories:
1) Transfer of production engineering and manufacturing documentation by the French OEMs to their Indian counterparts for fabrication, assembly and testing of those items associated with the CKD kits and IMKs. For this category, the French OEMs are contractually required to give 60% ToT.
2) 60% ToT for items produced by the French OEMs’ authorised Indian sub-contractors based on engineering documentation provided by the OEMs to their Indian counterparts.
3) ‘Built-to-specs’ ToT to the extent of 25% that includes the development and production of items on the basis of ‘procurement specifications’ sub-contracted by the OEM to various authorised Indian vendors.
4) 25% ToT for ‘bought-out items’ procured as ‘fully furnished items’ from the standard item parts catalogues of the OEMs.
5) Not beyond 15% ToT for proprietary items such as components for the RBE-2 AESA-MMR, fly-by-wire flight control system, and modules for the M88 turbofan.
(to be concluded)