Channel: Industry

Tuesday, May 03, 2011
UK Industry still in foray for the MMRCA jet deal

The UK defence, manufacturing and hi-tech industry got a massive boost when Eurofighter Typhoon of the EADS/BAE consortium was shortlisted as one of the last two contenders by the Indian Ministry of Defence for the USD 11bn Medium Multi-role combat aircraft. The other contender is also a European offering in Rafale from the French defence and engineering giant Dassault.


In the last few years India has gone from being nowhere to the largest buyer of foreign defence equipment. It currently imports nearly 75% of all its defence equipment from overseas suppliers which is equivalent to 9 per cent of global defence international procurement.


The MMRCA deal will contain 126 fighter jets of which around 18 will be bought straight from the supplier and the remaining will be manufactured locally in partnership and a technology transfer agreement with Hindustan Aeronautics Ltd. The local manufacturing is additionally driven largely by the steep defence offsets clause that require the bidders to ensure that of the total contract value at least 50% is local content.


Now the UK industry stands to gain regardless of who wins what is being touted as the mother of all defence procurement deals. If the Eurofighter wins the race then anywhere between 30-40 per cent of the contract value will be delivered by BAE Systems of the UK that is part of the consortium along with other partners from Germany, Spain and Italy.


If the Rafale wins then there are other British firms who form part of the supply chain have much to gain. Companies that stand to benefit include Cobham supply aircraft antennas for Rafale and defence decoy systems for the Typhoon; Meggitt, that makes ignition systems for Rafale and wheels/braking systems for the Typhoon.


The Indian Air Force has given its reports to the Ministry of Defence (India) after numerous and painstaking trials. The original six aircrafts, that also included Saab (JAS 39 Gripen), Lockheed Martin (F-16C), Boeing (F/A-18E/F Super Hornet) and Mikoyan (MIG 29 OVT)were evaluated against 650 parameters.


The Ministry of Defence (India) has taken a different approach evaluating the life-cycle-costs of the aircraft with 40 years of service and 6,000 hrs of flying as opposed to commissioning the one with the lowest bid.


Both Eurofighter and Rafale teams will engage in intense lobbying over the next year as the Indian Air Force and Ministry of Defence (India) set about to shortlist their preferred fighter jet. The one who will win will have to demonstrate the intention and capabilities of not only effective transfer of technology but also supporting the development the Indian defence innovation eco-system.

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