New Delhi: One of the largest defence purchases in recent times, the 126 aircraft purchase order from the Indian Air Force, is reaching the final stages of the a long drawn out tender process, with flight trials of the five aircraft set to start this month. Mint’s Anil Padmanabhan and Rahul Chandran spoke to Bernhard Gerwert, chief executive officer of military air systems, EADS Defence and Security, the largest stock holder in the Eurofighter Typhoon, one of the five aircrafts going to flight trials this year, when he was in New Delhi. Edited Excerpts:
I saw some reports saying that the Eurofighter is willing to sweeten the deal in the Indian context, and offer a manufacturing facility. True?
The reason of my visit here is a little bit broader than just to make a statement regarding what we are doing here. The main reason why I am here in the last few days is to get a feeling for where we are in the campaign and that is why I spent three days here. On the one side of course, to have the discussion with my own people, directly placed here in Delhi and Bangalore, but as well to have a lot of discussions with the customer, feeling where we are in this campaign because you have to take into account the next phase: We have to go into flight trials. And to go for flight trials is a very expensive journey. Coming to India with two, three fighters, doing the flight trials in Europe and before doing so, I’d like to get a little grip on where we are. And I have to say, I have a good feeling.
Fighter instinct: Gerwert says he is gaining confidence in his firm’s bid for Indian Air Force’s jet orders as he is getting a lot of questions. Ramesh Pathania / Mint
And what made you get a good feeling? Is it something you offered?
I could not offer something now in addition to what we already offered. We submitted our bid in April last year. And the first target was to be invited for the flight trials and now we are invited.
You can see that as a huge success but all the other competitors have been successful as well. So it is by far not enough. But we talked a lot about what is the next phase. What is the outcome of the flight trials. How the flight trials would be evaluated and so on.
I strongly believe, due to the discussions I had the last two days, that the customer and the decisive people are fully aware that the evaluation of such a mission, is a huge challenge. Because they have to take into account very different dimensions, not only performance of an aircraft but the performance of our bid and that is a challenge of course. They have to judge the performance of the aircraft, they have to evaluate the mission capabilities of the aircraft, they have to take into account the technology of such an aircraft and not forget they must be very cautious about what the customer really needs and what the customer wants.
Finally, it is an issue of national security. It’s the security of this country and of the soldiers of this country. And all these dimensions we discussed with people in the last few days and I have a feeling that a lot of people here understand these dimensions. So it’s not just technical evaluations and tick in the boxes.
The request for technology transfer, you can see that in completely different dimensions. For instance, look at the strategic partnership, which we offer to the Indian customer and the Indian industry. EADS Defence & Security just launched a joint venture with Larsen & Toubro. What are we planning to do? We will transfer technology from Germany to India. We will transfer workload from Germany to India. The products which will be produced in the first step of this joint venture are not related to the Eurofighter. However, we can use this technology later for the Eurofighter.
Another dimension is the fact that we have signed the support contract for the LCA. It’s not only that we are doing the support for the LCA. We are also hiring engineers in India and we will employ these engineers in our EADS/Airbus engineering center in Bangalore. What will happen? We will transfer a kind of technology or knowledge to Bangalore. We will employ, in the next two years, roughly 200 engineers in this engineering centre that is related to the defence aerospace business. In reality, we will shift workload from Germany to India in the area of avionics.
What is behind this? We prepare ourselves and we prepare the Indian industry that they are already prepared in a very early stage to absorb the needed technology for the Eurofighter. Why is that so important? We are now coming to the partnership. Look at the aircraft with a lifecycle of 30 years, 40 years, 50 years which has started its life a few years ago. Then you also have upgrades for the next 20-30 years and then you will have additional capability enhancements.
So you are differentiating between the partnership you have in India and the existing partnerships in Europe with other member countries?
Yes. It must be different because I would like to point out that India has the great opportunity to become our industrial partner. However, it cannot be that we say “Okay. India could become a fifth partner and then we divide everything through five instead of four.” Of course this is not possible, let us be clear among ourselves.
The presence of other European nations like France’s Rafale which is also bidding. You have Airbus where you are collaborators and you have the Eurofighter where you are competitors. Does that affect in any way?
No.Rafale is a competitor for Eurofighter and that is the case in India and that is the case in other countries as well. Rafale—the company Dassault—is not a partner of the Eurofighter programme, so it’s a competitor like other competitors as well.
The Americans have the same. They have Lockheed and then Boeing.
I believe the UK has cut back its orders from 88 aircraft to 40?
No. Maybe you are aware that the Eurofighter programme between the four nations was a so-called umbrella contract of 620 aircraft. We signed this contract of 620 aircraft for the four nations in 1998. This contract is split into slices - Tranche 1, Tranche 2 and Tranche 3. Now we come to Tranche 3. We split Tranche 3 with 236 aircraft due to financial problems of one or the other country, into so-called Tranche 3A and Tranche 3B. The full number of Tranche 3 for the UK is 88 aircraft and for Germany 68. In Tranche 3A, the UK is getting 40 aircraft and Germany 31aircraft. The rest will be negotiated later in Tranche 3B. That is what we have agreed. Therefore the umbrella contract of 620 aircraft for the UK, Germany, Spain and Italy is still valid.
The weather conditions in India are very different from Europe. So how does the Eurofighter stack up in these peculiar weather conditions?
The best answer is that we sold 72 Eurofighter to Saudi Arabia. And if you look into the weather conditions in Saudi Arabia, are they so different to India? On the heat, I don’t think so. Maybe it’s even more hot in Saudi Arabia. The other issue is the height. I am not afraid of that at all. I am quite sure, there is not any issue regarding the performance of the Eurofighter.
Looking at the official reports of the exercises that have been done by the four European air forces in exercises with other air forces, in all cases that I know in the last two years, the Eurofighter was the winner. All other aircraft were the losers. They beat everything.
Do you get the feeling that all other things being equal, considerations other than just the quality of the aircraft may come into the equation?
You cannot just take the product, take a list and tick in the boxes. For such decisions, what kind of mission, what kind of threat, what does it mean regarding independence, what does it mean regarding reliability, so many topics must be taken into consideration. And I have a feeling that is understood. And to be honest, if I wouldn’t have the feeling that it is understood, I would have this nice cup of coffee and go home and would not spent millions of dollars for the flight trials.
The confidence, which I am getting, is mostly because I am getting a lot of questions. When you are getting more and more intelligent questions, you will say: ‘Hey, these guys know what they are doing.’
We are sometimes criticized that Eurofighter is not produced by one company but of a consortium. Different companies are involved, even companies which are competitors. Is that good or is that bad? If you talk about the involvement of several companies, I can assure you that we are used to work in international cooperation. What’s the difference, if we do it now with four companies or five or six? Already today, we are manufacturing one wing in Italy and the other in Spain and we assemble it together in Germany. We are used to work in international partnerships and India is invited to join us.