Expert View - French Rafale lowest bidder in India

Tue Jan 31, 2012 8:24pm IST

A Rafale fighter jet makes a catapult launch off the flight deck, where in two seconds the jet goes from 0 to 250 kms per hour, aboard France's flagship Charles de Gaulle aircraft carrier March 28, 2011. REUTERS/Benoit Tessier/Files

A Rafale fighter jet makes a catapult launch off the flight deck, where in two seconds the jet goes from 0 to 250 kms per hour, aboard France's flagship Charles de Gaulle aircraft carrier March 28, 2011.

Credit: Reuters/Benoit Tessier/Files

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REUTERS - India has selected France's Rafale combat jet as cheapest bidder in a competition to buy 126 fighters and will enter exclusive negotiations with manufacturer Dassault Aviation for a deal worth up to $15 billion, Indian government sources said.

Following are reactions to the news, which pushed shares in Dassault Aviation up more than 20 percent to their highest level in over four years.

JAMES HARDY

ASIA PACIFIC SPECIALIST, IHS JANE'S DEFENCE WEEKLY

"It's a big win for the Dassault and the Rafale: its first overseas order, after a couple of big disappointments in Brazil and UAE, and a big loss for Eurofighter.

The Typhoon was widely tipped to be the favourite and had major political support from the big beasts of the Eurofighter nations. Both Germany and the UK invested a lot of time in pushing the Typhoon so this will hurt.

"The Indian MoD will argue that it chose Rafale based on it being the lowest bid...

"However, it is important to note that this is just the first step. Rafale has been selected as preferred bidder but any student of Indian procurement knows that this means nothing until the contract is physically signed."

UDAY BHASKAR, STRATEGIC ANALYST AND DIRECTOR

NATIONAL MARITIME FOUNDATION, NEW DELHI

"It would have a strong positive impact on the bilateral relationship with France. It should not affect India's relations with the Eurofighter consortium because France has a strong footprint in the European Union. This deal does not mean India's relationship with Germany, Britain, Spain or Italy will be negatively impacted".

RET'D AIR CHIEF MARSHAL FALI HOMI MAJOR

FORMER CHIEF OF STAFF, INDIAN AIR FORCE

"The Rafale gives India a huge combat edge to our air force given the situation in our region, and 126 jets means that this is a long awaited addition to our squadron strength.

"I am not specifically talking about China or Pakistan. I am talking of the capability of an air force in the present scenario in the region.

We cannot say what kind of conflict situation there would be, in the region, 20 years hence. To maintain readiness in any contigency and to project their power in the right manner, this is definitely a great addition for the Indian Air Force."

FRENCH TRADE MINISTER PIERRE LELLOUCHE

"I confirm that we are in a very positive phase for the Rafale in India...At this stage we have to remain prudent; we are in a phase of exclusive negotiations. We have won the contract but there a number of things to finalize so let's be cautious for now."

FRANCIS TUSA

EDITOR, DEFENCE ANALYSIS

"In these competitions as soon as you say there is an evaluation and X is the winner people pay attention, but then you need to have a commercial and industrial evaluation.

This is not a victory, it is round two."

FRENCH LAWMAKER OLIVIER DASSAULT

(SON OF DASSAULT GROUP CEO SERGE DASSAULT)

"It's very, very, very good news not only for Dassault but the whole of the French aeronautic industry.

"It's a programme on which more than 500 companies are cooperating. It's a victory for all of the small- and medium-sized high-technology companies that are participating in the construction of the most beautiful airplane in the world."

HOWARD WHEELDON, SENIOR STRATEGIST, BGC PARTNERS

"This is not the end of the road by any stretch of the imagination. This is only the beginning of a second stage of this campaign.

India is going to ensure it gets what it wants. The bottom line will be when they ask what industrial assistance is genuinely going to be put in, compared with what is promised. The second stage will be more about whether promises can actually be met.

The Typhoon, unlike the Rafale, is far from being a mature aircraft. The Typhoon has time on its side; the Rafale does not.

ROB STALLARD, AEROSPACE ANALYST, RBC CAPITAL MARKETS

"Without export orders to date the Rafale needed a win to stay in production, an economic reality that had been reiterated by the French government (its sole buyer/operator to date).

"The resultant pressure to win in India has likely resulted in aggressive pricing though it is likely to evolve during the negotiation process as industrial commitments ... and milestones are affirmed.

Nonetheless at this stage we see the selection of Dassault by the Indian government (still pending official confirmation) to be a positive result for team Rafale, which includes Safran (SAF.PA).

Confirmation of the award is a clear negative for the Eurofighter consortium, of which EADS EAD.PA and BAE Systems (BAES.L) are the largest participants. Eurofighter production is already challenged with Germany recently reducing its purchase by 37 aircraft and the consortium agreeing to slow the production line in search of export orders out to 2017."

(Compiled by Tim Hepher, Leigh Thomas, Anndrea Shalal-Esa, Blaise Robinson)

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