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Sunday, January 26, 2014

100% price escalation on Rafale fighter aircraft to Rs 1.75 lakh crore likely to dent IAF's strike capability

Dassault RafaleIndia’s biggest deal of procuring 126 medium multi-role combat aircraft (MMRCA) for $18 billion (Rs90,000 crore) has hit rough weather. Two years after French aircraft maker Dassault Aviation bagged the deal for its Rafale fighter jets on account of being the lowest bidder, its cost has now shot up by 100 per cent.

In January 2012, when Rafale was declared the winner, its price was quoted between $60-65 million (Rs373-Rs400 crore). A top defence ministry official said the price of a fighter jet made by Dassault could now cost $120 million (Rs746 crore). The second bidder, Eurofighter, had quoted $80-85 million (Rs497-Rs528 crore).

The price hike would mean that the deal would cost India nothing less than $28-30 billion (Rs1.75 lakh crore-Rs1.86 lakh crore),” said an Indian Air Force (IAF) official, who is privy to discussions of the cost negotiation committee.

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