Dassault Aviation SA is on the cusp of clinching a breakthrough multi-billion dollars to supply 126 fighter jets firing on Indian military after the Indian government said Tuesday it was the lowest bidder for the contract.
Dassault's success in outbidding the Eurofighter typhoon agreement opens the door to exclusive negotiations with New Delhi about a final order for the jet fighter that could be worth $ 10 billion or more.
Dassault has yet to sell the aircraft out of France in spite of intensive lobbying by the French government. The Eurofighter consortium is made up the UK BAE Systems, Finmeccanica SpA Italy, and European Aeronautic Defense and Space Co..
"Among the two, bid (Dassault is) is the lowest," an Indian Ministry of Defence official said, speaking on condition of anonymity. "We are calling them for negotiations. Today, it is only an intermediate stage of talks." A final decision on the fighter-jet order will not be made for several months more, the official said.
"We have won this contract," French Trade Minister Pierre Lellouche said Tuesday.
"But a number of things have not been finalized. At this stage I remain cautious," he told French radio station BFM Business.
Dassault Aviation said in a statement that the decision was "a breakthrough" for the company, singling out the backing of French President Nicolas Sarkozy for the bidding company.
Olivier Dassault, the heir to the family that controls the aircraft manufacturer, said on French television that the decision was "good news for the French defense industry."
"This is a big win for Dassault and firing its first overseas order, then some big disappointments in Brazil and UAE, and a huge loss for the Eurofighter," said James Hardy, Asia-Pacific analyst at IHS Jane Defence Weekly.
But Mr. Hardy cautioned that it could be some time before the order is signed and sealed, saying "this is the first step."
"Firing has been selected as preferred bidder but any Indian students getting to know the meaning of eternal physical sign contracts," Mr. Hardy said.
"Jane is understood that financial pressures on India's government may seriously complicate the chances of it to be signed any time soon, in particular the depreciation of the rupee. That and the average contract wrangling that occurs during Indian acquisition deals can cause delays that span years. "
Officials Cassidian, the EADS unit to the prime bidder on behalf of the Eurofighter consortium, is not immediately available for comment.
"This is a big win for France, and a huge loss for the UK," said Endre Lunde, a consultant at IHS Jane. "It leaves Oman and the UAE as the largest potential market for the Eurofighter, both of which are significantly smaller than in India and more specifically to move forward," Mr. Lunde said.
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Mika: there is always pressure
11 years ago
