Millennium Post

Eurofighter ready to offer better deal than it had offered four years ago: British official

Eurofighter ready to offer better deal than it had offered four years ago: British official
This is in light of the reports that the L-1 bidder, France’s Dassault, with its Rafale aircraft is stuck in the contract negotiation process. During the recently concluded Defexpo’14, there was talk that the ministry representatives are unhappy with the way the company is interpreting life-cycle cost (LCC). There are unconfirmed versions that said the French company appeared to have estimated the cost of the engine separately from the airframe.

As a result, the net cost of the Rafale MMRCA is actually becoming higher than what was thought its price would be. The IAF have plans of getting 18 of the aircraft in fly-away condition from France, while 108 is to be built in collaboration with Hindustan Aeronautics Ltd (HAL) under licence from Dassault.

Thus as the contract negotiation has become protracted, many keen watchers of the deal believe that the country could back out of the deal on the cost issue.

In that circumstance, the Eurofighter is being considered ‘in’ with a chance to replace Rafale as the second choice for the IAF. The British official, Alan Malpas, a regional director of Africa, Middle-East, Central and South Asia of the United Kingdom Trade and Investment (UKTI) Defence and Security Organisation told Millennium Post, ‘Having known the detail that L-1 cost has gone higher, we can actually offer price that is lower.’

‘While I can’t talk of the industry, I shall like to say that the time since the submission of the bid three-and-a-half, four years ago, the Typhoon programme has matured. There has been a lot of retionalisation and a lot of cost-cutting. So, the more likely outcome would be a price which is significantly lower,’ he said.

The official, however, underlined the fact that the defence minister, AK Antony, had stated at the Defexpo’14 inauguration press conference that the problem in the negotiation is only temporary and not an impediment to closing the deal. Antony, of course, had also said that the deal cannot be concluded in the current fiscal year, but will spill over to the next, as 92 per cent of the capital budget of the ministry and the services has been spent already.
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