Mirage Upgrade

Introduction

India and France in July 2011 entered into a contract to upgrade IAF's Mirage 2000 fleet. The contract had been under negotiation since 2007.

India signed separate contracts with M/s Thales and M/s Dassault Aviation France, and M/s Hindustan Aeronautics Limited (HAL) for the upgrade. 

Cost of Contract

The cost of the contract for upgrade of the Mirage 2000 with M/s Thales and M/s Dassault Aviation is Euro 1470 Million, while the cost of the contract with M/s HAL is Rs.2020 crore. The cost of the contract for procurement of the missiles from M/s MBDA, France, is Euro 958,980,822.44. 

The entire upgradation of the Mirage aircraft is scheduled to be completed by 2021. Delivery of MICA missiles is scheduled between 2015 and 2019. 

Scope of the Upgrade

The contract envisages upgrade of the IAF aircraft to Mirage 2000-5 standards and an extension of their life by another 20 years. 

The entire airframe will be stripped to extend its life and to re-wire and re-equip the aircraft with new avionics, mission computers, glass cockpits, helmet-mounted display and electronic warfare suites to support a contemporary weapon suit.

The aircraft will be fitted with the Thales RDY2 multimode radar and the MPDU mission computer (fitted on the Rafale), as well as new navigation and electronic countermeasures. 

High Cost of Upgrade Questioned in Parliament

On March 4, 2013 defense minister AK Antony told Parliament that the upgrade cost for each Mirage 2000 was Rs 167 crore. 

The last lot of the aircraft contracted by India in 2000 cost just Rs 133 crore apiece. 

In a written reply, Antony explained, "Applying an escalation of 3.5% per annum as per the pricing policy review committee, to the contracted cost of the year 2000, it works out to be Rs 195 crore at 2011 levels. Thus, the upgrade has been undertaken at 85% of the aircraft's escalated cost." 

the Rs 167-crore unit cost does not give the full picture. 

The overall cost of the upgrade program is Rs 17,547 crore, including the purchase of MICA missiles, which works out to Rs 344 crore per aircraft. [via TOI]

Terms of the Contract

Under the contract, Dassault will upgrade two IAF Mirages in France within 44 months. Next, Dassault and HAL will jointly upgrade another two Mirages in Bengaluru over the next 14 months. HAL will then upgrade the rest.

The entire upgradation of the Mirage aircraft is scheduled to be completed by 2021. Delivery of MICA missiles is scheduled between 2015 and 2019.

Contract Progress

As on January 4, 2012, two aircraft were in France for upgrades. [via Hindu]

Contract History

On November 18, 2011, Air Chief Browne told the press that the first two aircraft will fly out to France next week.

GOI and the French firms Dassault and Thales signed the upgrade deal on July 29, 2011.

The Cabinet Committee on Security (CCS) chaired by Prime Minister Manmohan Singh cleared the $2.4 billion deal on July 13, 2011 after nearly five years of negotiations.

The total value of the deal could be $4 billion, with $1 billion for new weapons and another $500 million for creating upgrade facilities at Bangalore-based Hindustan Aeronautics Limited (HAL).

Under the deal, the French firms will help in upgarding the avionics, navigation systems, mission computers, electronic warfare systems and radars bringing the aircraft to the Mirage-2000-5 standards.

India will first send two Mirage 2000s to France for upgrades; the rest of the Mirage fleet will be upgraded at Hindustan Aeronautics Limited facilities in New Delhi.

The deal will mandate an offset investment of over $900 million (30% of the deal value) in the Indian defense, civilian aerospace or homeland security sectors by French defense companies. The offset clause is applicable to foreign vendors bagging deals over Rs 300 crore.

The protracted negotiations, involving French companies Dassault Aviation (aircraft manufacturer) and Thales (weapons systems integrator), initially remained mired over the Rs 13,500 crore ($2.9 billion) price sought by the French companies.

In July, 2009, before Prime Minister Manmohan Singh left for Paris on a state visit, TOI reported that the two sides had arrived at a price settlement.

‘‘The two sides have now arrived at a reasonable price around Rs 10,000 crore. The first four to six Mirages will be upgraded in France, with the rest 50 or so being upgraded in India by Hindustan Aeronautics under transfer of technology,’’ said the source.

Mirage 2000 in IAF

The IAF initially purchased 40 Mirages in the mid-1980s and later followed up with 20 more. 

The current IAF inventory of the aircraft is 51 with the aircraft equipping 1 (Tigers) and 7 (Battle Axes) sqns, both based in Gawalior.

The Mirage 2000 is considered the most potent combat proven aircraft in the IAF inventory after it gave an excellent account of itself during the 1999 Kargil conflict, with its precision bombing from high altitudes using laser guided bombs.

The Su-30MKI is probably more potent than the Mirage 2000 but has yet to be fielded in combat.

Before the MMRCA project crystallized, the IAF, impressed by its existing Mirage 2000 fleet, was keen to order Mirage-2000-Vs to replace its ageing MiG fleet.

Breakdown in Negotiations

In October 2009, Business Standard reported a breakdown in negotiations with Dassault Aviation. Senior IAF sources told the magazine that the Ministry of Defense (MoD)  found the Rs 196 crore ($41 million) upgrade price per aircraft exorbitant, considering that the airframe and engines would not be changed, but Dassault wouldn't go any lower.

In comparison, the projected per aircraft price tag of MMRCA was Rs 400 crore ($87 million), including transfer of technology. 

MoD believes it will make more sense for the IAF to continue with its existing M2000 fleet and procure an additional two squadrons of MMRCA using the Rs 10,000 crore ($2.1 billion) it would otherwise spend on M2000 upgrade.

The IAF's enthusiasm for M2000 upgrade has waned as Dassault has steadily hiked the price of spares in what the service considers as arm twisting.

Israeli Offer

Israel reportedly offered to upgrade the Mirage-2000 fleet for half the price being quoted by Dassault. The MoD, however, didn't accept that offer.

During his visit to India in December 2009, Israeli defense services chief, General Gabi Ashkenazi, was reported to have presented Israel's Mirage 2000 upgrade proposal to the top brass, including the chief of air staff, Air Chief Marshal Pradeep Vasant Naik.

General Ashkenazi's visit was the first ever by an Israeli defense services chief.