India: Combat aircraft deal winner to be finalised in six weeks

New Delhi, Nov 5 (PTI) The multi-billion dollar deal to procure 126 combat aircraft for the Indian Air Force (IAF) has entered its last phase with India's Ministry of Defence opening on Friday the commercial bids of the two European contenders to determine the lowest bidder, a process that is expected to take six to eight weeks. "The Contract Negotiations Committee (CNC) of the Defence Ministry opened the commercial bids and read out the offers made by the Eurofighter and Dassault Rafale in the presence of their representatives. Now the Ministry will evaluate and examine their proposals to arrive at the lowest bidder (L1)," a Defence Ministry spokesperson said here. The two contenders now know each other's quote for the bid but it will take another six to eight weeks for deciding on the ultimate winner of the bid, Ministry sources said here. As per the Defence Procurement procedure (DPP), the bidder charging lowest price and meeting all the requirements specified in the tender has to be offered the contract. The Defence Ministry will now start calculating the Life Cycle Cost (LCC) of the two aircraft, which is to be operated for 40 years or 6,000 hours, they said. Final commercial negotiations with the L-1 vendor (lowest bidder) will begin before the contract is ready for signing before the end of the 2011-12 fiscal ending on March 31, 2012. Officials said the Government had earmarked Rs 420 billion (USD 8.6 bn approx) for the deal in 2007 but after the negotiations, if it is required, the funds can be increased significantly. Decks were cleared for opening the commercial bids after the Defence Acquisitions Council (DAC), chaired by India's Defence Minister A K Antony, approved the offsets evaluation reports of the Eurofighter Typhoon (backed by UK, Germany, Spain and Italy) and the French Rafale jets on October 7. In a surprise move, India had rejected two American contenders from the race along with Russian and Swedish jets on the basis of their performance in the field evaluation trials. After the opening of commercial bids, Eurofighter said in a statement that "our offer for the tender is backed by the four Eurofighter partner nations as well as their respective aerospace and defence industries. It is competitive and designed to deliver maximum value to India." Germany, Italy, Spain and the UK are the four partner nations in the Eurofighter programme. PTI