Airbus Helicopters has initiated the process to get approval for a joint venture with an Indian partner to manufacture helicopters in India, with a majority stake held by the European company.
Airbus will offer the upgraded A-330 MRTT Enhanced variant to the IAF, which has selected Rolls Royce Trent 700 engines for the aircraft.
Rolls Royce is hoping the IAF will select it’s Trent 700 engine over the GE CF-6 engine for the Airbus A-330 MRTT aircraft and is relying on performance, costs and market leadership to make its case.
Life Cycle Cost was not a consideration in the earlier contest, in which the Airbus A-330 MRTT was selected over the IL-78, before the tender was withdrawn. This time the factor is expected to be a key determinant of the acquisition cost of the two aircraft.
This is the second and concluding installment of the two-part analysis of the process of acquisition of 126 Medium Multi Role Combat Aircraft (MMRCA) by the Indian Air Force (IAF).
A cost escalation of 50 percent (INR 63,000 crore, in this case) or more, requires approval again from the Ministry of Finance, before the Defense Acquisitions Council (DAC) can proceed with it. With the cost of the tender for India safely ranging from INR 83,000 crore to 1,25,000 crore, the revision of the estimated expenditure on the MMRCA would require the approval of the finance ministry.
The Indian Navy has issued a Request For Information for a second batch of Multi-Role Helicopters, even with the existing tender process for 16 helicopters still under way. Unlike the earlier tender, the new RFI is also taking Life Cycle Cost into consideration as part of the assessment process.
