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Bid low, fly high

Source : BUSINESS_STANDARD
Last Updated: Wed, Feb 01, 2012 19:31 hrs

News emerged on Tuesday that the Rafale fighter aircraft, manufactured by France-based Dassault Aviation, is the lowest bidder among the candidates vying for the contract to supply 126 medium multi-role combat aircraft (MMRCA) to the Indian Air Force (IAF). The remaining contender was also a European product, the Eurofighter Typhoon, produced by a consortium of four countries. The Rafale, it was determined, would be distinctly cheaper to buy, fly, make and maintain. The matter now moves to contract negotiation, for which there is a special committee within the defence ministry. The total contract is expected to be around Rs 75,000 crore.

There are several points that are worth keeping in mind in this context. First, that this has been a largely transparent process — except, oddly, in the very last lap, in which there was no official notification made public even as the news was passed on to the media through unofficial channels. The choice appears to have been made entirely according to laid-down technical procedures. This is, in one way, a pleasant change: defence contracting has otherwise been too open to the pulls and pushes of politics as usual. There may have been significant geopolitical benefits to, for example, buying an American-made fighter instead; but these were not taken into consideration, and the US candidates were taken out of the race relatively early. The military will be using this equipment; that the military is receiving what its own processes specify is therefore a valuable development. However, a rigid adherence to procedure does also bring with it a lack of space for subjective decision-making, and the purchase of fighters with a four-decade life, as the Rafale is expected to have, is one place where dispensing with such subjectivity altogether is perhaps worrying. After all, strategy is nothing if not subjective, and the future uses of military equipment depends crucially on long-term strategic planning. Is there place for that in a narrow, constrained process?

Indeed, while it is a pleasant change that the cheapest of many options has been bought through bidding, it is necessary to always remember that the cheapest is not always the best. India’s record with its fighter purchases has been mixed. Given that, if a new backbone for the IAF is being purchased, price should only be one of the factors — a tie-breaker, even. Is the process through which the Rafale was chosen flexible enough to reflect that basic insight? After all, there are more than just the “4.5 generation” options on the table, such as the Saab Gripen. “Fifth-generation” fighters, with updated capabilities, are not far away, and might even be substantially cheaper than the Rafale. It should be worrying, after all, that this is Dassault’s only major foreign contract — and not that many planes short of its own domestic contracts, either. While openness and transparency are always to be welcomed, there is always a role for leadership and subjectivity in decision-making.



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