Procurement: Rafale Wins With Hustle

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December 11, 2017: As expected in Egypt sought to buy another twelve Dassault Rafele jet fighters from France after receiving the last of the 24 it had ordered in 2015. But the French Finance Ministry looked at the Egyptian economy and eight billion dollars’ worth of French weapons Egypt had ordered since 2014 and expressed concern about the Egyptian ability to handle any more debt and pay for another billion dollars’ worth of Rafale fighters. But French politicians, eager to get the sale, pointed out that Egypt had new natural gas deposits and their economy was growing at 6 percent a year. Moreover Egypt had better relations with Israel and Saudi Arabia (which had helped financed some of the French weapons debt). The first 24 Rafales had cost nearly $6 billion, but that included establishing training and maintenance infrastructure for Rafales so more sales would increase the chances that Rafale would eventually replace many of older Mirages and F-16s Egypt has been using. By selling more Rafales Egypt the Egyptians would be able to provide maintenance and upgrade facilities in the region, lowering costs for other Arab Rafale users. By November the Finance Ministry agreed to withdraw its objections. The prospect of selling more Rafales to Middle Eastern nations, including Qatar, which is at odds with its fellow Arab oil states over how to deal with the growing Iranian threat, becomes easier with Egypt as a major Rafale user.

Egypt received its first 24 Rafales a few at a time, providing opportunity to train pilots and support personnel. The first three arrived in July 2015, four months after Egyptian pilots and maintainers arrived in France for training. The Egyptian Rafales required a few modifications, mainly the removal of the hardware and software required for the aircraft to deliver nuclear weapons as well as the NATO communications equipment. This was replaced with what communications gear is currently standard in Egyptian warplanes (largely F-16s). Egypt wanted to receive all 24 Rafales before it considering order more so France completed delivery by 2017. The manufacturer said it could be done and it was. As expected this helped obtain more export sales from nations eager to upgrade their air forces.

This began in early 2015 when Egypt, looking to strengthen its military muscle, placed an order for 24 Rafale fighters. Egypt has a long history of buying from the French and in 2015 had about a hundred Mirage V’s and Mirage 2000 fighters in service. These two predecessors to the Rafale had served the Egyptian air force well, seeing action most recently in the 2014 bombing of Libya. But these Mirages were getting old and would have to be retired by the mid-2020s. Egypt has a large force of American F-16s, but the U.S. has lots of rules that prevent some countries from buying more and the rules change all the time. France is less judgmental when it comes to selling warplanes.

The Rafale costs between $100 and $130 million each. Its design was based heavily off the Mirage 2000 and like most other Dassault fighters it has the Delta Wing configuration. The Rafale has a maximum speed of 2,130 kilometers an hour and a range of over 3,700 kilometers. It is equipped with a 30mm cannon and can carry nine tons worth of weapons. It is a battle tested aircraft that has already seen service with French Forces in Afghanistan, Mali, Libya and Iraq.

The first sale to Egypt was a big deal for France. Until 2015 export buyers for the Rafale had been scarce. The Rafale was up against stiff competition for sales from aircraft such as the Eurofighter Typhoon, Swedish Gripen NG, American F-18E and Russian Su-30. Thus in 2013 Brazil passed on buying the Rafale and instead went with the cheaper Swedish Gripen NG.

The UAE (United Arab Emirates) is still considering a purchase. The first sale to Egypt was needed to encourage others to buy an aircraft that has not been selling well. What helped make this sale happen was Saudi Arabia, Kuwait and UAE providing half the financing and the French government guaranteeing most of the rest. Egypt was not a good credit risk and had been kept afloat since 2011 by massive charity from Gulf Arab oil states (like Saudi Arabia, Kuwait and UAE).

France has had nothing but hard times trying to find export customers for Rafale and that had consequences. In 2009 the production rate was reduced from 14 a year to 11 and that was further reduced later. This was to slow down the delivery of Rafales, mainly because the Defense Ministry has decided that other things were more important. The new emphasis (and spending) was on peacekeeping and anti-missile defenses. Another reason for slowing down Rafale production was the lack of export orders. Since 2015 production has increased and the manufacturer points out that it has the capability to increase production quickly. By late 2017 over 170 Rafales had been built and over a hundred more were on order.

In 2016 India finally agreed to buy 36 Rafale fighters with an option to buy another 18. India has been seeking to modernize its military and has most recently turned to the United States for assistance. France wants to build up its relationship with India, as well, and was eager to sell India some Rafale. The Indian air force was already using the Mirage 2000 and has historically liked Dassualt aircraft. The two main sticking points, standing in the way of a deal were the Rafale’s rising price tag and whether India will be able to produce the fighter domestically. India insisted on coproduction (some Rafale manufacturing done in India) and the French believed India overestimated its capabilities in handling some of the advanced technologies that go into Rafale. Of course India wants local manufacturers to handle that advanced tech and this is how you learn. But India also wants the French held responsible for the quality of items produced in India and this is still being negotiated. The French finally got around that with the $20 billion deal for the Indian Rafales if they could be delivered quickly (between 2019 and 2025) and in 2017 India began negotiating for the purchase of another 36 in order to improve their chances against an increasingly aggressive China. This new Rafale deal depended on how quickly France can deliver and the French say they can do it and in the case of Egypt demonstrated that ability

 


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