Article Posted on : - Oct 08, 2011

NEW DELHI (PTI): Defence Ministry on Friday cleared the way for opening the commercial bids of two shortlisted vendors in the multi-billion dollar combat aircraft deal by approving their offset proposals here.

After the bids are opened, the Defence Ministry will be able to determine the lowest bidder in the deal for 126 Medium-Multi Role Combat Aircraft (M-MRCA) and decide who will ultimately get the contract described as the 'mother of all deals'.

At a meeting chaired by Defence Minister A K Antony, the Defence Acquisition Council (DAC) cleared the offset evaluation report of Dassault Rafale and Eurofighter Typhoon, the two remaining contenders, Defence Ministry officials said here.

"All the spade work for the opening of bids has been completed. Opening of the bids will be done in a few days in the presence of the two vendors," they said.

As per the offset clause, foreign vendors bagging deals worth over Rs 300 crore are supposed to invest back 30 per cent of the worth of the contract in Indian defence industry.

In M-MRCA, the vendors will have to invest 50 per cent of the worth of the deal.

"No date has been specified for opening of the bids but it will happen soon," the officials said.

The offset proposals of the two companies were tabled before the DAC by Director General (Acquisition) Vivek Rae.

Besides the Defence Minister, the two-hour meeting was attended by the three Service chiefs, the Defence Secretary, the Secretarym, Defence Production, the DG (Acquisition) and concerned joint secretaries in the Ministry.

After the bids are opened to evaluate the lowest bidder, the proposal will move to the Finance Ministry for its approval and it will then go to the Cabinet Committee on Security (CCS) for final nod by the government.

"The entire process is expected to be over by this financial year," the officials said.

In April, the two European companies were shorlisted by the government out the total six contendoers including American Boeing and Lockheed Martin, Russian MiG-35 and Swedish Gripen.

As per the RFP of the contract, 18 aircraft will required to be supplied by the vendors from their facilities and the remaining would be license produced by HAL here.