The Indian Air Force (IAF) will "very soon" float a long-delayed global tender for 126 multi-role combat jets in a deal estimated to be valued at around $9 billion (Rs 370 billion).
"It will go out very soon. The outer limit is two to three months," Defence Minister AK Antony said on the sidelines of a function in this suburban town where he opened a new research laboratory established by state-owned Bharat Electronics.
While Antony did not specify the reasons for the delay, an official said "certain procedural issues" needed to be resolved before a request for proposal (RFP) is issued for the aircraft.
The "issues" relate to areas like calculating life-cycle costs, the manner in which the offsets policy governing defence purchases will be implemented, and transfer of technology (TOT).
Under the offsets policy laid down in the Defence Procurement Procedure-2006 (DPP-2006), 30 percent of all military deals worth more than Rs.3 billion has to be reinvested in India.
Calculating life-cycle costs is another challenge for India's defence planners since this aspect had never been factored in while concluding military hardware deals in the past. Seventy percent of the equipment in the armed forces' inventory is of Soviet or Russian origin.
As for TOT, India has not insisted on technology transfers in the past, but this has now been made mandatory.
The IAF desperately needs new aircraft to ramp up its depleting fleet of Soviet-era MiG-21, MiG-23 and MiG-27 aircraft. The MiG-21 has undergone a mid-life upgrade to increase its service life. The MiG-23 has already been retired, while the MiG-27 is being gradually phased out.
This apart, the indigenously developed Tejas light combat aircraft (LCA) that was to replace these jets has suffered huge cost and time overruns and is now unlikely to be inducted before 2012.
Thus, there are also indications that the defence ministry could fast track the process by issuing a RFQ (request for quotation) instead of a RFP. "This will enable us quicken the process but a view on this is yet to be taken," the official stated.
However, regardless of whether a RFP or a RFQ is floated, it could be at least five years before price negotiations with the selected manufacturer or manufacturers is concluded and another five years before the first of the new aircraft start arriving, the official added.
By that time, the IAF force levels would have further plummeted from their current all-time low of 30 squadrons and thus, the actual requirement could be for some 200 aircraft, a defence analyst pointed out.
The IAF was operating 39 1/2 squadrons against a sanctioned strength of 45 when a request for information (RFI) was sent out in 2001.
The race for the IAF order is believed to have narrowed down to five aircraft: the US F-16 and F/A-18 Super Hornet, the Swedish JAS-39 Grippen, the French Rafale, and the Russian Mig-29OVT.
The RFI had been sent out to the manufacturers of the F-16, the Gripen, the MiG-29, and the French Mirage-2000-5. In addition, the manufacturers of the F/A-18, the Rafale, and the four-nation European Typhoon also sent in their offers.
Russian President Vladimir Putin, during his visit here in January, had plugged for the MiG-35, essentially a re-engineered version of the MiG-29.
Officials are tight-lipped about the selection process beyond saying the race seems to have narrowed down to five aircraft.