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  • US set to bag $5 bn defence deals from India

    NEW DELHI: Having already bagged Indian defence contracts worth over $8 billion in recent years after muscling out Russia, Israel and France, the US is now headed towards clinching another four major deals worth almost $5 billion.


    Defence ministry sources on Thursday said the deals for six more C-130J " Super Hercules" aircraft ($1.2 billion), 22 Apache attack helicopters ($1.4 billion), 145 M-777 ultra-light howitzers ($885 million) and 15 Chinook heavy-lift helicopters (around $1 billion) "are in the final stages" now.

    India will convey this to US deputy secretary of defence Ashton B Carter when he arrives here next week. Carter, who will hold talks with defence minister A K Antony, national security advisor Shiv Shankar Menon and defence secretary R K Mathur, is the Obama administration's "point man" for expanding defence trade with India as a cornerstone of the bilateral strategic ties.

    "The deals should be inked within this financial year (2013-2014) despite budgetary constraints. The C-130J deal, for instance, is likely to go to the Cabinet Committee on Security in October-November," said a source.

    The aircraft and howitzer deals will be direct government-to-government contracts under the US foreign military sales (FMS) programme, which does not involve competition through global tenders.

    The attack and heavy-lift helicopter deals, however, were won by aviation major Boeing after its AH-64D Apache Longbow and twin-rotor Chinook helicopters outclassed Russian Mi-28 Havoc and Mi-26 choppers in field trials and commercial evaluation.

    But there are "some loose ends" in the deals that need to be tied up first. The defence ministry, for instance, has told Boeing that it should drop its insistence on "limited liability clauses" being included in the agreements.

    Similarly, the M-777 contract has been hanging fire since January 2010 due to field evaluation reports being "leaked" and certain other irregularities involving a top Indian Army officer. "There is an inquiry in progress but it should not be a major hurdle," said another source.

    Cost escalation is another big factor. Due to the long delay, the US Defence Security Cooperation Agency last month hiked the cost of the M-777 deal from the earlier $ 647 million to $885 million for the 155mm/39-calibre howitzers.

    Incidentally, the four deals are also in tune with the government's recent approval to the Rs 90,000 crore plan to raise a new mountain strike corps along with two "independent" infantry brigades and two "independent" armoured brigades (totalling over 80,000 soldiers) over the next seven years to plug operational gaps against China.

    While the first six C-130J aircraft acquired by IAF are based at the Hindon airbase, the six new "Super Hercules" will be housed at Panagarh in West Bengal. Panagarh will serve as the headquarters for the new Army mountain corps.

    Similarly, the air-mobile M-777 howitzers, with an almost 30-km range, can be swiftly deployed in high-altitude areas in Arunachal Pradesh and Ladakh by helicopters and aircraft to counter China.

    Source
    Politicians are elected to serve...far too many don't see it that way - Albany Rifles! || Loyalty to country always. Loyalty to government, when it deserves it - Mark Twain! || I am a far left millennial!

  • #2
    The indian politicians aren't going to buy something that cannot be used. I don't understand what they plan to do with a C-130J in an actual war due to political constraints. I'm positive that AK antony fully understands the illogicality of making that decision. My best guess is that the decision to acquire the C-130J is appeasement politics and not for actual operational value.

    Lets see... the french and the rafale sale has stuck in boot loop due to assurance guarantees so I doubt the US sales will actually go through.

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    • #3
      Why has the prices of the artillery jumped twofold? They were supposed to be half a billion dollars. Now they are priced nearly 7 million dollars a piece. That is the same price of a M1 tank or Leopard II tank!!! What gives?

      Comment


      • #4
        Spare parts and training included?

        Plus you can't airlift M1 ;)
        No such thing as a good tax - Churchill

        To make mistakes is human. To blame someone else for your mistake, is strategic.

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        • #5
          India has to learn to close deals at the right time also to push a hard bargain.
          The offer price was around 4 years old, also in between that Australia bought the guns around the same amount India is asked to pay now.

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          • #6
            $200 million for each C-130J and roughly $70 million per Apache? Yikes.

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            • #7
              Originally posted by citanon View Post
              $200 million for each C-130J and roughly $70 million per Apache? Yikes.
              the devil is in the through life support model - so its not necessarily that ugly.

              the danger in articulating a platform price is that unless all the contract details are visible it can be misunderstood, if not misrepresented to whatever anyone wants

              eg some countries factor in establishment ccosts, through life crew costs, projected fuel costs etc.... as part of defining a platform cost
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              • #8
                Originally posted by gf0012-aust View Post
                the devil is in the through life support model - so its not necessarily that ugly.

                the danger in articulating a platform price is that unless all the contract details are visible it can be misunderstood, if not misrepresented to whatever anyone wants

                eg some countries factor in establishment ccosts, through life crew costs, projected fuel costs etc.... as part of defining a platform cost
                yeah but it is artillery. it s just a tube with wheels. Not a lot of parts to with unless the deal comes with radar locaters or counter battery features.

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                • #9
                  Originally posted by Blademaster View Post
                  yeah but it is artillery. it s just a tube with wheels. Not a lot of parts to with unless the deal comes with radar locaters or counter battery features.
                  as an example (and I've worked on some ballistics projects) so I'm deliberately going to avoid providing answers on some of this out of necessity

                  how many firings have been factored in for each barrel
                  at a certain firing point the barrels have to be swapped out - and we're talking about 7 figures for each barrel
                  how many barrels have been factored in as nominal supply
                  the through life contract for arty is usually a min of 25 years + renewed at that period for 5 year blocks

                  the last project I worked on we estimated that from a specific calibre "up" there were close to 40,000 barrels (worldwide) that might need replacing every year if they stayed committed to a prev determined usage rate

                  apart from barrels, there's a whole pile of other stuff that needs to be progressively replaced and upgraded...

                  if they're using the current defence accounting models then the exchequer would be looking at unit (military team) costs and training costs. current costing models require that the travel, team, contract support costs all get factored in and then broken up per platform

                  I've seen the same problems when people argue about jet fighter costs. the oft quoted price per platform you see in the public domain is without context and often varies in how the modelling was done between countries. eg the Hornet costs for Canada, Australia and Finland were widely varied as the modelling for all 3 countries was based around a different construct. ie the quoted FMS cost for each country was basically meaningless

                  it does all add up

                  eg a company like BAE would be making a nice little earner out of the through life support costs for all of the arty it supports - all those diff calibres across many countries and with varying usage rates means that the maint model is helping their bottom line
                  Last edited by gf0012-aust; 16 Sep 13,, 06:47.
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                  • #10
                    Originally posted by Blademaster View Post
                    yeah but it is artillery. it s just a tube with wheels. Not a lot of parts to with unless the deal comes with radar locaters or counter battery features.
                    What gf0012 said, plus this witty remark...

                    If it's just tubes with wheels, why IA buys them from abroad? I mean how hard it is for a country with a space and nuclear program to engineer them?
                    No such thing as a good tax - Churchill

                    To make mistakes is human. To blame someone else for your mistake, is strategic.

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                    • #11
                      Originally posted by Doktor View Post
                      If it's just tubes with wheels, why IA buys them from abroad? I mean how hard it is for a country with a space and nuclear program to engineer them?
                      Foreign arms lobby, Dok.

                      Though new rules laid out by the MoD will hopefully change that. Indian private sector has finally been given the green light to produce offensive weapons platforms (starting with 155mm artillery).
                      Last edited by Tronic; 16 Sep 13,, 08:14.
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                      • #12
                        Originally posted by Tronic View Post
                        Foreign arms lobby, Dok.

                        Though new rules laid out by the MoD will hopefully change that. Indian private sector has finally been given the green light to produce offensive weapons platforms (starting with 155mm artillery).
                        Could be what you say, and certainly lobbyists are part of the equation

                        Let's look at Canada and Australia. They both have the capabilities and know-how. Haven't heard anything from them on arty tubes (could be wrong here of course)
                        No such thing as a good tax - Churchill

                        To make mistakes is human. To blame someone else for your mistake, is strategic.

                        Comment


                        • #13
                          just to add some definition to the subject
                          on one particular arty system the replacement barrels are $6m each. One arty platform would probably go through 20-25 barrels in its life.

                          thats just the cost of the barrel, multiply the swapouts, maint conact etc and it becomes an eyebrow lifter when you look at overall costs
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                          • #14
                            Originally posted by Tronic View Post
                            Foreign arms lobby, Dok.

                            Though new rules laid out by the MoD will hopefully change that. Indian private sector has finally been given the green light to produce offensive weapons platforms (starting with 155mm artillery).
                            That's a welcome gesture. However, the current requirements are huge and the urgency is even more huge. The IA currently requires close to 814 pc mounted system,100 pc SP, 1580 pc towed and about 145 pc ultralight cannons, to replace our 1970s vintage guns of 105mm, 122mm and 130mm calibre. I am not very optimistic that domestic production can address such numbers both in quality as well as quantity in such an urgency. Foreign purchase, however bad it might seem is the immediate need. I am all for domestic production in the long run, something that DRDO, TATA, L&T etc are already doing.
                            sigpicAnd on the sixth day, God created the Field Artillery...

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                            • #15
                              Originally posted by anil View Post
                              The indian politicians aren't going to buy something that cannot be used. I don't understand what they plan to do with a C-130J in an actual war due to political constraints. I'm positive that AK antony fully understands the illogicality of making that decision. My best guess is that the decision to acquire the C-130J is appeasement politics and not for actual operational value.
                              Please elaborate. The C-130Js increase our strategic airlift capability....What can't you understand about it's use in war?

                              Cheers!...on the rocks!!

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