Over 50% of Rs 59,000 crore Rafale price already paid amid political slugfest

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Over 50% of Rs 59,000 crore Rafale price already paid amid political slugfestNEW DELHI: India has already paid more than half of the Rs 59,000 crore owed to France under the contract inked in 2016 for the 36 Rafale fighter jets, which will be delivered between November 2019 and April 2022.

The 13 India-specific enhancements or upgrades on the 36 jets will, however, become fully operational only by September-October 2022 as they will require another six months to undergo "software certification" after all of them have touched down in India .

Defence ministry sources say "around Rs 34,000 crore" has been paid in "milestone-linked instalments". "Another instalment of Rs 13,000 crore is to be made later this year," said a source. The first 15% instalment was paid soon after the agreement was inked in September, 2016. Then, even as IAF positioned project management and advance training teams in France, other instalments linked to milestones, like completion of critical design review and documentation, were paid.

"The remaining instalments are linked to actual deliveries, with the final tranche to be paid in 2022," said the source.

The IAF will get delivery of the first four jets in France in September this year, which will be followed by training of the "main" induction team of around 10 pilots, 10 flight engineers and 40 technicians there. As per the schedule drawn up, these jets will arrive at the Ambala airbase in Haryana in May 2020.

As was earlier reported by TOI, the IAF plans to base a squadron of 18 Rafales each at the Ambala and Hasimara (West Bengal) airbases to cater to the two fronts with Pakistan and China. The infrastructure coming up at the two airbases at a cost of around Rs 450 crore, incidentally, can house two Rafale squadrons each.

But the original plan of the IAF – down to just 31 fighter squadrons when at least 42 are required to tackle the "collusive threat" from Pakistan and China – to order 36 more Rafales does not seem possible in the foreseeable future due to the ongoing political slugfest.

The "non-recurring" design and development cost of the 13 ISEs or upgrades, which range from radar enhancements, low-band jammers and Israeli helmet-mounted displays to towed decoy systems and the engine capability for "cold start" from high-altitude regions, is pegged at 1.3 billion euros in the overall 7.8-billion-euro deal for the 36 Rafales.

The first Rafale jet with the 13 ISEs is currently undergoing flight-testing in France, which is expected to achieve certification by April 2022. By this time, the other 35 fighters with the requisite hardware upgrades will be delivered to India in batches of 4-6 each. "Thereafter, it will take another six months to finish the certification for the software to drive the ISEs for all the 36 jets," said another source.

The ISEs have led to some controversy after a report claimed the NDA deal proved vastly exorbitant because it led to the 1.3-billion-euro cost being spread over just 36 jets instead of 126 jets under the original but never finalised medium multi-role combat aircraft project being negotiated by the previous UPA government. But the government said it was wrong to "selectively pick" certain aspects of the deal while "ignoring others", and that too without correctly calculating the built-in cost escalation factor.