Brazil is "very likely" to choose France's Rafale fighter jet to refurbish its air force, government sources say, a decision that would award one of the emerging-market world's most coveted defense contracts to a jet whose future was in doubt only two weeks ago.
President Dilma Rousseff and her top advisers believe that Dassault Aviation's (AVMD.PA) bid to sell at least 36 Rafales offers the best terms among the three finalists, the sources told Reuters on condition of anonymity.
The other two bidders are Boeing's (BA.N) F-18 and Saab's (SAABb.ST) Gripen.
Rousseff has cast the deal as a watershed decision that will help mold Brazil's military and strategic alliances for the next few decades as it continues to establish itself as a leading economic power. The contract will have an initial value of about $4 billion but will likely be worth considerably more over time once maintenance and follow-on orders are included.
Rousseff previously had concerns about the Rafale because the jet had not found any buyers outside France. That raised doubts about whether Dassault would have the scale necessary to build the jets at a reasonable cost and maintain them over time.
The sources said those concerns were assuaged when India announced on January 31 that it had entered exclusive talks to buy 126 Rafales. Brazilian Defense Minister Celso Amorim traveled to New Delhi last week to discuss the deal with Indian officials and examine documents related to Dassault's bid.
"The India deal changed everything," one of the Brazilian sources said. "With India's decision, it's now very likely the Rafale will be the winner here."
The sources said that Dassault offered the best combination of a high-quality aircraft and the sharing of proprietary technology that Amorim has said is critical to the deal. Brazil hopes to use that technology to expand its own budding defense industry, led by aircraft maker Embraer (EMBR3.SA).
Dassault touts the Rafale as an agile, medium-sized aircraft with low operating costs that can be more quickly deployed than its bulkier competitors. Those attributes may appeal to Brazil, which has no significant problems with its neighbors and plans to use the aircraft mainly for defensive purposes such as patrolling its recently discovered offshore oil fields.
Boeing's offer of technology has yet to be finalized but the sources said they believe it cannot compete with Dassault's bid because the United States has historically placed tight restrictions on the sale of military technology abroad.
If confirmed, the deals would enhance France's partnerships with two of the world's biggest up-and-coming economic powers - Brazil and India. They could also provide a boost to President Nicolas Sarkozy, who has cast himself as a champion of French industry and an energetic salesman of the Rafale in particular as he faces a tough re-election fight this year.
The sources said that unexpected developments, especially a breakdown in India's talks with Dassault, could still cause Rousseff to change her mind.
They also said her decision would probably not be announced until after France's April-May election, in an attempt to keep the deal from becoming overly politicized.
Source: Reuters
Gravity always wins!
India’s selection of Dassault Aviation as the preferred bidder for a 126-fighter jet deal was largely based on a price tag 25 percent cheaper than the French firm’s Eurofighter rival, a report said Feb. 10. The Times of India quoted a defense ministry source as saying the Eurofighter consortium bid with its Typhoon jet would have cost $5 billion more than Dassault’s Rafale fighter.“The French Rafale jet ... beat the Typhoon hollow both in terms of lifecycle costs and direct acquisition costs,” the source said, adding that the ministry of defense had consequently ruled out “any comeback” for the Typhoon bid.The Eurofighter consortium groups Britain’s BAE Systems, Italy’s Finmeccanica and the European Aeronautic Defence and Space Company.British Prime Minister David Cameron said last week that he would urge India to reconsider its decision to opt for the Rafale over the British-backed Eurofighter plane.Dassault will enter exclusive negotiations with India next week to try and reach agreement on a final contract for the sale of the 126 multi-combat fighters.The total cost of the deal has been estimated at between $12 billion and $20 billion.The huge contract to supply war planes to fast-developing India had been fiercely fought over for four years.In April last year, India pulled a surprise by cutting out U.S. bidders Boeing and Lockheed Martin — much to Washington’s disappointment — as well as dropping Sweden’s Saab AB and the Russian makers of the MiG-35 from the race.Source: By AGENCE FRANCE-PRESSE, NEW DELHI, 10 February 2012 - Gannett Government Media / DefenceNews (www.defensenews.com) & www.xairforces.netPhoto: The French Air Force Dassault Mirage 2000 with Rafale Fighter Aicraft (Photo by img14.imageshack.us)
India’s selection of Dassault Aviation as the preferred bidder for a 126-fighter jet deal was largely based on a price tag 25 percent cheaper than the French firm’s Eurofighter rival, a report said Feb. 10.
The Times of India quoted a defense ministry source as saying the Eurofighter consortium bid with its Typhoon jet would have cost $5 billion more than Dassault’s Rafale fighter.“The French Rafale jet ... beat the Typhoon hollow both in terms of lifecycle costs and direct acquisition costs,” the source said, adding that the ministry of defense had consequently ruled out “any comeback” for the Typhoon bid.The Eurofighter consortium groups Britain’s BAE Systems, Italy’s Finmeccanica and the European Aeronautic Defence and Space Company.British Prime Minister David Cameron said last week that he would urge India to reconsider its decision to opt for the Rafale over the British-backed Eurofighter plane.Dassault will enter exclusive negotiations with India next week to try and reach agreement on a final contract for the sale of the 126 multi-combat fighters.The total cost of the deal has been estimated at between $12 billion and $20 billion.The huge contract to supply war planes to fast-developing India had been fiercely fought over for four years.In April last year, India pulled a surprise by cutting out U.S. bidders Boeing and Lockheed Martin — much to Washington’s disappointment — as well as dropping Sweden’s Saab AB and the Russian makers of the MiG-35 from the race.Source: By AGENCE FRANCE-PRESSE, NEW DELHI, 10 February 2012 -
Gannett Government Media / DefenceNews (www.defensenews.com) & www.xairforces.netPhoto: The French Air Force Dassault Mirage 2000 with Rafale Fighter Aicraft (Photo by img14.imageshack.us)