French firm Dassault Rafale has bagged India's biggest-ever military contract for supplying 126 combat aircraft for the Air Force, edging out European rival EADS in the deal that may be worth about ten billion dollars.
The French firm was declared as the lowest bidder, according to which it will get the contract under India's defence procurement procedure, sources said in New Delhi on Tuesday.
"The French firm Dassault Rafale has emerged as the L-1 (lowest bidder) and cheaper than its European rival EADS (maker of Eurofighter) in the tender and will be offered to supply the aircraft to the IAF," the source said.
They said the representatives of Dassault in New Delhi were informed about the development in the morning and further negotiations on price will be held with them in the next 10-15 days.
The contract will be signed only in the next fiscal. Government has in 2007 earmarked Rs 42,000 crore for the deal.
According to the Request for Proposal (RFP), the winner of the contract will have to supply 18 of the 126 aircraft to the IAF in 36 months from its facilities and the remaining would be produced at HAL facilities in Bangalore.
Six companies, including American F-16 and F-18, Russian MiG 35, Swedish Saab Gripen along with Eurofighter and Dassault Rafale, were in the race in the beginning.
But in April last year, the Defence Ministry shortlisted Dassault and EADS, rejecting the American, Russian and Swedish bids.
The process was started with the issuing of a global tender in 2007, after which all the six contenders were subjected to extensive field evaluation trials by the Indian Air Force at several locations across the globe.
The bids of the two companies were opened by the IAF on 4th November last year and arrived at the lowest bidder after calculating the life cycle cost of the aircraft.
Sarkozy happy with Rafale selection by India
France said President Nicolas Sarkozy expressed happiness at India's selection of the French fighter aircraft Rafale for acquisition by Indian Air Force and said negotiations for the contract would begin very soon.
"The President of the French Republic has learned of India’s selection of the Rafale for the acquisition by the Indian Air Force of 126 fighter aircrafts. France is pleased with Indian government’s decision to select the French aircraft to enter into exclusive negotiations with Dassault," said a statement issued by the French Embassy in New Delhi on Tuesday.
It said the announcement comes at the end of a very high-level, fair and transparent competition involving two European finalists for the bid.
The statement said "negotiations for the contract will begin very soon and has the full support of the French authorities. It will include important technology transfers guaranteed by the French government.
"Rafale has been selected, thanks to the aircrafts competitive life-cycle costs, after the April 2011 pre-selection on the basis of its top-level operational performance", it added.
"The realisation of the Rafale project will illustrate the depth and scale of the strategic partnership between France and India," the statement said.