India scraps midair refuelers tender, to negotiate directly with Airbus

New Delhi: India has scrapped a nearly six-year-old $2-billion tender to buy six midiair refueler aircraft for the Air Force. It now intends to negotiate for the aircraft directly.

IHS Jane’s 360 first reported on July 26 that India’s Ministry of Defence (MoD) terminated in late June the tender for buying six Multi-Role Tanker Transport (MRTT) aircraft for which it had selected the Airbus Defence and Space‘s A330 MRTT.

“We have been notified by the MoD of the withdrawal of the request for proposals (RfP), but we do not see this as the end of the road for the A330 MRTT campaign in India,” IHS Jane’s 360 said citing an unnamed Airbus official. The company “will engage with the Indian government in finding a way to bring the A330 MRTT’s capabilities to the IAF,” it said.

The Times of India reported on July 31 that the Indian government is now planning “a direct strategic purchase” of six Flight Refueling Aircraft (FRA), to enhance the reach of its fighter jets, bombers and surveillance aircraft.

Industry sources, independently, told your website that the government will now negotiate directly with Airbus without going through the tender.

India, under Prime Minister Narendra Modi, has already given up the global tender route to meet its requirement for fighter jets, terminating its 2007 RfP for 126 Medium Multi Role Combat Aircraft (MMRCA) in mid-2015.

It is now directly negotiating with France for 36 Rafale jets from Dassault Aviation, which was originally selected as the winner of the tender in 2012.

That apart, India has been listening to pitches from Boeing, Lockheed Martin and Saab — all of which lost in the 2007 tender – under a ‘Make in India’ project to build one of F/A-18, F-16 and Gripen respectively. This is to meet its unfulfilled requirement of 90-more combat jets for the Air Force fleet, government and industry sources have already indicated.

The present Indian decision to terminated the 2010 midair refueler RfP came after the bid to acquire them through global tenders failed twice over the last decade, it said.

Consequently, the MoD has scrapped the proposed Rs. 9,000 crore contract for acquisition of six A330 MRTT, which was hanging fire for several years due to high costs as well as old CBI cases and change in the manufacturer’s name from EADS Cassidian to Airbus Defence and Space, it said.

“Airbus was told towards end-June that the RFP (request for proposal or tender), under which the A330 MRTT was selected as L-1 (lowest bidder), has been withdrawn. A decision will now be taken for direct acquisition of FRA, a critical operational necessity for IAF+ ,” the TOI said, citing an unnamed top MoD source.

The Indian Air Force had for the first time in 2006 wanted to acquire six additional midair refuelers to augment its existing fleet of six Ilyushin IL-78 tankers there were first inducted in 2003-04.

While the six IL-78s are based at Agra to support operations against Pakistan, the six new A330 MRTT are meant for Panagarh in West Bengal to focus on operations on the China front.

The twin-engine A330 MRTT had been previously selected twice as the preferred midair refuelers over the four-engine IL-78 based on technical and commercial evaluations during the last decade while processing the two now-terminted tenders

The method of calculating the Life Cycle Cost of the A330 MRTT to select it over IL-78 is now being cited as the “concern” that resulted in the second termination of the RfP.

The Life Cycle Cost basically identifies “total cost of ownership” of an aircraft or other equipment through its entire operational life of 25 years to 30 years.

“With oil prices drastically dropping, Russia was contesting the LCC model used to select A-330 MRTT over the IL-78 (guzzles more fuel with four engines but cheaper off-the-shelf). There were finance ministry’s objections and other problems,” the TOI says citing, again, an unnamed source.

Author: indostrat

IndoStrat is a media outfit that brings you news from the Indian defence and strategic sectors. If you are an avid watcher of India's military, diplomacy and strategic affairs, this is the place to come to for satiating your appetite for latest news, opinions, facts, tidbits and some informed gossip.

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