Currency Fluctuations May Affect Indian Fighter Rebids

Aerospace Daily & Defense Report
April 28, 2010
PROGRAMS
NEW DELHI — The Indian Ministry of Defense has extended by a year — up to April 28, 2011 — the commercial validity of bids on India’s 126-aircraft Medium Multi-Role Combat Aircraft (MMRCA).
A letter from the ministry to the bidders — MiG-35, Dassault’s Rafale, Eurofighter, the Saab Gripen, Boeing’s F/A-18E/F and Lockheed Martin’s F-16 — states that vendors can extend or revise their bids, which must be resubmitted by June (Aerospace DAILY, March 26).
But some vendors are now concerned that owing to the delay, currency fluctuations in a volatile financial climate could make the difference between the lowest bidder and the higher ones.
Receipt of the defense ministry letter was confirmed by Vivek Lall, vice president and head of Boeing Defense Space & Security in India, who said: “The U.S. navy and Boeing have been requested by [the ministry] to extend the validity of the MMRCA proposal. We are working to provide a compliant response in support of the deadline set.”
Lockheed Martin said the F-16INteam “plans to update its commercial bid to ensure the best possible value to India on MMRCA.”
The rate of the contract is determined on the date of opening the commercial proposal. “Looking ahead into the next year, with the problems the euro is facing, the dollar may become stronger, which gives the euro an advantage,” a financial analyst tells AVIATIOn WEEK. “As European companies look at relocating plants to the U.S. where the dollar is stronger, theoretically, it does not make sense to do so,” the analyst says.
Meanwhile, MMRCA field trials are still underway. AVIATION WEEK learns that Saab Gripen will now be in India on May 17. The company brought two Gripen-Ds but was unable to bring its NG demonstrator to India as a result of additional tasking.
Some vendors have expressed concern that the MMRCA project will be dependent on the political and economical situation, and may take more time for clearance barring unforeseen circumstances like a security challenge.
- Neelam Mathews (mathews.neelam@gmail.com)