New Delhi: India will miss a Wednesday deadline to complete the world’s biggest fighter jet purchase in 15 years, risking a possible $1 billion (Rs445 crore) price increase as Boeing Co. and five rival manufacturers resubmit bids.
The Indian Air Force is still conducting flight trials for competing jets from Boeing, Lockheed Martin Corp. and four European firms, two years after accepting price quotes for 126 warplanes that the government said should cost around $10 billion. The bids expire on Wednesday and the defence ministry has asked the manufacturers to submit offers for an additional year, ministry spokesman Sitanshu Kar said in a phone interview.
“The firms have been informed by the government that they can extend their bid for one more year,” Kar said. They have the option of increasing or decreasing their price.
The delay in buying what India describes as multi-role combat aircraft may raise the government’s eventual cost, said Mrinal Suman, a retired Indian Army major general and arms procurement analyst. By the recent track record, the cost of these aircraft generally goes up by 7-10% each year, Suman said by phone.
India’s failure to choose a plane within the planned two years highlights that this is by far the biggest, most complex arms purchase India has ever undertaken, said Suman.
Political considerations have slowed decision-making by defence minister A.K. Antony, said Rahul Roy-Chaudhury, senior fellow for South Asia at the International Institute for Strategic Studies in London.
Antony has been trying to assure a squeaky clean deal to avoid any possible allegation of corruption, because of past scandals that helped drive the ruling Congress to defeat in the?1989 elections, Roy-Chaudhury said. Those scandals erupted over allegations that Indian officials took bribes in the purchase of Swedish artillery and German submarines.
Since the 1980s, no Indian government has made an open-bid arms purchase valued at as much as $100 million, or 1% of the fighter deal’s size, Roy-Chaudhury and Suman said.
The Indian Air Force has conducted flight trials for the six competing aircraft from a high-altitude airfield near Leh in the Himalayas, a desert base in Rajasthan and in the tropical climate of Bangalore, Kar said. “The trials will be over shortly, maybe by the end of May,” he added.