Europe has an edge over the US in the tightly-fought contest to sell India a next-generation engine for the homegrown Tejas light combat aircraft (LCA). Informed sources have told Business Standard that when the bids were opened last week, European consortium Eurojet bid $666 million for 99 EJ200 engines, against US rival General Electric, which quoted $822 million.
Both engines had been earlier adjudged technically suitable to power the Tejas Mark-II. Therefore, according to the ministry of defence’s procurement rules, the vendor offering the lower price is to be handed the contract.
But the champagne corks aren’t popping yet at Eurojet. Both engine-makers have been asked for certain clarifications by Wednesday, and senior Eurojet executives are worried that Washington could pressure New Delhi to opt for the US engine in the interregnum.
At stake here is far more than a few hundred million dollars. Industry experts say India’s choice of engine for the Tejas would significantly shape the choice of a medium multi-role combat aircraft (MMRCA), an $11-billion contract for which the Indian Air Force is evaluating six fighters. Of these, the Eurofighter has twin EJ-200 engines, while GE F-414 engines power the US-built F/A-18 and Sweden’s Gripen NG fighters.
Says Air Vice Marshall (Retd) Kapil Kak of the Centre for Air Power Studies, the IAF’s official think tank, “It is as clear as daylight. Selecting the EJ200 for the Tejas would boost the Eurofighter’s prospects in the MMRCA contest.”
“Its engines, which form about 15-20 per cent of the cost of a modern fighter, would be already manufactured in India for the Tejas. For the same reason, rejecting the GE F-414 would diminish the chances of the two fighters that fly with that engine,” he added.
In its tender for the Tejas engine, the defence ministry has specified that only ten engines could be built abroad. All subsequent engines must be built in India, with the vendor transferring technology for their manufacture. If the EJ200 were built in India for the Tejas, Eurofighter would benefit from a fully amortised engine line and also be entitled to offset credits for the ‘made-in-India’ Eurofighter EJ200 engines. This would lower the price of the Eurofighter — a huge advantage for an aircraft regarded as high performance, but expensive. Logistically, too, the IAF would prefer an MMRCA with engines that were already in its inventory.
Selection of the GE F-414 engine, on the other hand, would provide all these advantages to the vendors of the F/A-18 and the Gripen NG fighters. This is a key reason why Eurojet and GE have conducted their Tejas engine campaign so competitively.
Furthermore, the order for 99 engines for the Tejas Mark-II is just a foot in the door to the Indian market. Given that each fighter goes through two to three engines during its operational lifetime, the four to five planned squadrons (84-105 fighters) of the Tejas Mark-II would actually need 200-300 new engines. The 126 MMRCAs could use several hundred more.
Business Standard had earlier reported on the European aerospace industry’s plan to enhance its presence in India’s military programmes through Eurofighter and the MMRCA contest. The first move by EADS was to provide consultancy to accelerate flight-testing of the Tejas; now comes the second move: bidding aggressively to win the Tejas engine contract.
Defence ministry sources have expressed surprise that Eurojet bid 20 per cent cheaper than rival General Electric, which is widely regarded as a cost-effective manufacturer. In fact, conversations with EADS executives reveal that this is a well-considered business strategy.
Sources in the Aeronautical Development Agency confirm that both GE and Eurojet engines fully met the technical requirements to power the Tejas Mark-II. The EJ200 — which IAF favours — is the more modern, lighter and flexible engine with greater potential for growth. The GE F-414 is heavier, but provides a little more power.
Eurojet is a consortium between Avio (Italy), ITP (Spain), MTU Aero Engines (Germany) and Rolls-Royce (UK), which was set up to develop the EJ200 engine for the Eurofighter. It is headquartered in Hallbergmoos, Germany.
"September 26, 2007 US Navy fiscal year 2007-2008 F414 engine production contract awarded to General Electric and worth approximately $340 million. The contract calls for the supply of 84 F414-GE-400 engines, 84 devices, 10 fan modules, 30 HPT modules and 18 LPT modules for the F/A-18E/F and EA-18G aircraft. The contract was announced on September 26, 2007. "
when GE could have bid 4-5ml/engine , why did they bid 8.3ml/engine..
didn't they delebratly make sure that EJ200 win , which bid at 6.7ml/engine...
but why , ?......
This is irrelevant to the decision of MMRCA! The author has completely overlooked the decision to setup the production line for Klimov RD 33 series 3/MK engines for MiG 29/K in Koraput. By the same inference drawn above, the decision for MMRCA should go to MIG 35 as it uses the RD 33 engine. Hence, the matter rests, or am I mistaken?! And By the way, India has been using MiG 29s since 1985 and bought an additional 40+ for the Navy, and an upgrade to MiG 35 with a shared engine and a production line is a given! huh! India is further upgrading MiG 29s to MiG 29 SMT, which share significant components with MiG 35, as does MiG 29K of the IN!
Posted by: gyani
September 22 , 2010, 18:42 IST
Because, my love, the MiG-35 is already out of the competition. It has performed miserably in the flight trials! Flopski.
How can you say that the IAF tender will be impacted by what happens to the DRDO tender for engines. And it seems the AVM is saying such things because of some motivated interests. Well people are already aware of Business Standard's love for the Eurofighter. The joke in the Ministry is that if the Boeing CEO falls sick, Business Standard will say that this important development will help Eurofighter win teh 126 M-MRCA tender.
Posted by: raghavan
September 22 , 2010, 18:44 IST
Jaychandran, you probably are from the Ministry of Defence. You don't seem to have any understanding of how defence equipment is priced... and that's a key attribute for serving in the MoD.
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