India on Friday opened the commercial bids for the multi-billion dollar 126 Medium Multi Role Combat Aircraft in the presence of the two competitors, European consortium Cassidian's Eurofighter and French Dassault's Rafale.
Officials in the Ministry of Defence said that with the opening of the envelopes containing the competitive bids, the process to procure the aircraft for Indian Air Force had entered a crucial and decisive stage.
“The process to determine the lowest bidder (L1) will take between six to eight weeks,” the officials said and refused to disclose the unit cost of each aircraft that the competitors mentioned in the documents.
The Contract Negotiation Committee (CNC) set off the process at a meeting at the Air Headquarters that lasted for nearly four hours. The government had agreed in 2007 to the IAF proposal to acquire 126 of these fourth-generation aircraft, known as Acceptance of Necessity at Rs. 42,000 crore (approx $ 10.2 billion).
Sources in the government said the time needed to arrive at the lowest bidder gets complicated on account of the need to take into account the Lifecycle Cost (LCC) of the aircraft that are expected to be in the IAF inventory for 40 years.
In addition, the tender for the aircraft floated under the Defence Procurement Procedure 2006 also insists that the vendor would have to source 50 per cent of the value of the deal from India under the offset clause.
Of the 126 aircraft, 18 would be procured in fly-away condition while the rest manufactured in India under Transfer of Technology. The possibility of increasing the numbers at a later date has not been ruled out.
Both these aircraft were downselected by the Indian Air Force from a field of six during this summer. Four competitors did not make the cut after IAF held extensive trials against 600-odd parameters.
These included American Boeing F/A18 Super Hornet and Lockheed Martin with F-16 Super Viper.
The Russian pitched the MiG35 while Sweden's SAAB offered the Gripen NG.
The trials were held both at home — across different weather conditions/regions — and at manufacturers' facilities that included weapons.