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Saturday, 21 May 2016

BUREAUCRATIC PARALYSIS HITS RAFALE DEAL


NEW DELHI — Only two weeks ago India's purchase of 36 Dassault Rafael fighters was considered imminent, but the deal has since been all but frozen and the country's general director of defense acquisition suddenly forced to step aside. Procurement officials in the Ministry of Defence (MoD) now are taking "a very cautious approach" in the $8.9 billion deal to buy 36 Rafale fighter jets, said an MoD source.

Early last month, for reasons that are not clear, former director general defense acquisition Smita Nagaraj was involuntarily placed on leave over differences with MoD leaders over Rafale negotiations, said the source.

Procurement officials in MoD are now too scared to clear any files and virtually all new acquisitions are stuck, the MoD source added.

Early this month, MoD officials conducted negotiations on the Rafale deal with French defense officials and it was decided that India for immediate requirements would make an unspecified number of weaponry purchases, including Mica air-to-air missiles, Scalp air-to-ground missiles, the Meteor beyond visual range missile and precision guided munitions at a cost of $1 billion. The negotiations also included a maintenance and engineering support agreement for five years at a cost of $500 million.

Dassault chairman Eric Trappier said in an April 13 radio report that he expected a contract could be signed “in the next few days," adding, “I have high hopes this contract could be signed fairly quickly.”

Defense Minister Manohar Parrikar informed the parliament May 3 that the federal Law Ministry has reviewed the Inter-Governmental Agreement (IGA) on the Rafale deal and that the findings would be taken into account when finalizing the IGA on the Rafale deal.

The parliamentary standing committee on defense expressed displeasure over the fact that the deal has not been completed.

“The committee is unhappy to note that although a considerable time has elapsed, negotiations with France on Rafale could not be taken to a logical end,” the radio report said.

Earlier, a French embassy source told Defense News there was an expected agreement of 50 percent offsets in the Rafale deal. The source said 30 percent of offsets will be earmarked for future military aviation research and development programs and the remaining 20 percent for Indian defense industries making Rafale components.

To execute the offsets, several French companies, including Safran and Thales, will join Dassault in providing state-of-the-art technologies in stealth, radar, thrust vectoring for missiles, and materials for electronics and micro-electronics, the French Embassy source said.

India MoD officials plan to buy all 36 Rafale fighters in fly-away condition, with first delivery of the Rafale expected within 20 months of the contract.

France will also provide five years of maintenance and spares support for Rafale aircraft.


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