NEW DELHI: The BJP-led NDA government has virtually terminated the 126 medium multi-role combat aircraft (MMRCA) contract worth $20 billion initiated by the UPA government. Though on Friday Prime Minister Narendra Modi made an announcement in Paris on buying 36 Rafale jets in ready-to-fly condition, on Monday, Defence Minister Manohar Parrikar put to rest all speculation on the fate of the 126 MMRCA contract.
While interacting with select media representatives in his office in South Block, Parrikar said, “A car cannot run on two paths simultaneously.” “Scope was only possible in government-to-government deal. Negotiations had ‘gone into a loop with no solution in sight’. Instead of going through the RFP route, where there was lot of confusion and chaos, we decided to go for the government-to-government process separately to buy 36 Rafale under flyaway condition,” said Parrikar.
“The Prime Minister has taken a bold step considering the country’s strategic need,” he added.
While the order is meant to be delivered as soon as possible, terms and conditions of the deal — estimated at about $4.25 billion (about `700 crore) — have yet to be worked out. “The two sides have agreed in principal and representatives need to sit together to discuss further course of action,” he said.
Replying to a question on whether future deals on Rafale would also be through the G2G route, Parrikar said, “All deal(s) will be in G2G only. The 36 aircraft are in fly-away condition which means they will be manufactured by the company in France and supplied in fly-away condition,” adding that no decision has been made on the number of aircraft under the MMRCA category.
The defence minister went on to add that the decision to buy 126 jets was a steep financial target. Ministry officials, privy to the development, said the project cost escalated to over $20 billion from $12 billion, when the tender was floated in 2007. The hike in cost included the life cycle spend, creating assembly lines and transfer of technology.
Acknowledging that Light Combat Aircraft Tejas will undergo final flight testing in May, Parrikar said, ‘Make In India’ is a long-term solution for India’s Air Force strength.