The facility at MDL is now ready to actually start construction on 7th Scorpene right away. And if P75I project RFP is released today , then say accelerated evaluation and bids will take minimum 12 months, say 2021 the winner is chosen and with the budget of 2022, the first thing we sign is for P75I. Then it will take another 6-8 months for stage to be set for actual steel cutting in MDL itself, so that's 2023 beginning at the very least.
And MDL can do work on 2 Scorpenes simultaneously, so its idiotic that we are not ordering atleast 2 more. This will lead a gap of 3 years and that specialised skill will again go away, which will not only cost the P75I more dollars but also delay it by atleast 24-36 more months.
There are two problems with it...
One is obsolescence. Any attempt at exercising options would mean we can't negotiate for new technologies, it will have to be the same version that we ordered back in the day. The Scorpene today is already outdated since it was configured before 2005. This is the same as MKI, we are still inducting the same jet that was configured back in 1995, making it almost obsolete. The Scorpene was designed for induction between 2012 and 2017. So if you want a new version of Scorpene, then you have to abandon the options clause and request for a new AON, making it a whole new deal.
Second is money. Yeah, it makes sense to keep the line chugging, but the Scorpene costs a lot more than it's worth today. Indian contracts are the worst negotiated contracts in the world. We pay a massive escalation up and over the original cost of the sub when it comes to long term projects. It's the same reason why we are paying $3B for the new Akula class simply because they have added a massive escalation over more than a decade, which boosts the actual price to a billion bucks. So any attempt at a new Scorpene will see prices exceeding $1B for each sub since 15 years have elapsed. This is the main reason why the govt said all long term projects must be signed under GTG so new negotiations can take place by bringing escalation down to realistic amounts. It's the same reason why Phalcon ended up going all the way to $1.3B when the actual price is just $800-900M for the 2 aircraft, which is why it was renegotiated.
So if we go for more Scorpene, all we are doing is buying something that will get killed easily when it becomes available 10 years down the line, since it will already be 25 years old then, and we will end up paying more than twice as much.
For long term projects, the options clause must be exercised within the first 5-7 years. If it exceeds that then you are dealing with excessive price and obsolescence. This is the main reason why the IAF is going for a new tender for the MMRCA requriement, since MMRCA is now heading towards obsolescence and a massive amount of escalation has been added on to the initial bid price by now, making it meaningless. Otoh, the IAF exercised the options clause for MKI within the first few years of delivery of the first jet, which made it a very good decision. This is also why the CDS recommends piecemeal induction of MRFA requirement with renegotiation at every step after every batch, which is how everyone else does.
Otoh, MoD is much more flexible with Indian IP. They allow reconfiguration and renegotiation here, at least it's a whole lot more quicker than imports. HAL tried playing the escalation game with LCA Mk1A by taking advantage of the same done for M2000, Mig-29 and MKI. But they spectacularly failed because MoD simply decided to renegotiate the contract and even cut HAL down to size during the process.
The new SPM process allows reconfiguration and renegotiation to a certain extent mainly because the main party is an Indian company, not the foreign OEM. So all new foreign subs will come in only through this process now.