Tuesday, January 14, 2014

C-295 Only Eligible Bid for PAF's Medium Lift Fixed Wing Aircraft Acquisition Program

The bid submission and opening for the Philippine Air Force's requirement for 3 Medium Lift Fixed Wing Aircraft has seen Airbus Military (EADS-CASA) and PT Dirgantara Indonesia (PT DI) fighting for the project, offering the C-295 and the CN-235, respectively. Noted was the absence of another expected bidder, Alenia Aermacchi with its C-27J Spartan aircraft, which made a previous complaint regarding supposed communication flaws by the DND last year. Of the 2 bids submitted, it was found that Airbus Military's C-295 is the lowest eligible bid, with a quote of Php 5.289 billion, or a little lower than the Php 5.3 billion budget allocated by the PAF and DND.


Airbus Military's C-295 transport aircraft, as used by the Spanish Air Force.
Airbus Military recently submitted the lowest compliant bid for the PAF's Medium Lift Fixed Wing Aircraft Acquisition Project, which will complement and ultimately replace the PAF's ageing Fokker F-27 aircraft.
Photo taken from Milavia.net


Early notes from people present in the bid opening process confirmed that only the bid of Airbus Military was found as eligible, with PT DI planning to file for motion for reconsideration. MaxDefense later found out that the CN-235, as previously reported by an earlier MaxDefense blog regarding this project, was non-compliant as it cannot carry the specified number of pallets, passengers, paratroopers, and stretchers as required by the technical specifications. It was also non-compliant on the payload requirements, making all these a strong reason for the aircraft to be disqualified.


A C-295 transport aircraft delivered to the Mexican Air Force.
Photo taken from shepherdmedia.com

As for Alenia Aermacchi's concerns, the Department of National Defense (DND) has vowed to answer all their earlier complaints separately. 


The CN-235 offered by PT DI was disqualified for failing to meet payload and space requirements. In a twist of fate, the winning bidder Airbus Military is one of the original manufacturers of the CN-235, together with PT DI.

It is expected that the post qualification process will start soon, and may involve DND and PAF personnel to check EADS-CASA-Airbus Military's facilities and C-295 production in Spain. No word though if PT DI will be involved in any way as they are also a licensed assembler of the C-295 for the Indonesian Armed Forces (TNI) and a strategic partner of Airbus Military. If everything goes as planned, it is expected that the planes will be available to the PAF after 26 months after opening of letter of credit which may be provided to Airbus Military by around March or April this year. Thus the latest the PAF can have their planes will be around May, 2016. The PAF would be luckier if Airbus Military can deliver earlier as their production of the C-295 is still in full blast. It is still unconfirmed though if Airbus Military offered the newer C-295W version, or the older C-295M.

With the choice of the C-295, it would be interesting to see next what would be the PAF's choice on the future Long Range Maritime Patrol Aircraft (LRMPA) acquisition project, wherein the a modified C-295 is said to be one of the contenders as well. Although it was confirmed by the DND and PAF sources that the LRMPA project might be US-sourced, it is still possible for the C-295 to steal the show as everything is not yet final on that project.


A C-295 in MPA form used by the Chilean Navy. With the C-295 choice of the PAF, the C-295 bid for the LRMPA project may be possible as well.

MaxDefense will provide updates on this project up until we can finally see a contract signed between the PAF and Airbus Military.

85 comments:

  1. Hey Max, What happened to you page on facebook ??

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  2. sir ano po nangyari dun sa FB page ng Maxdefense? di na ma-search.

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  3. What platform is that US sourced lrmpa? Anyway, this C295 is a logical choice. Are you aware of any contract details that disallows outsourcing the production of C295 to Indonesia? I would prefer the build quality of Spain. I've been to Indonesia and Filipino's are more meticulous to quality than them... and that's being diplomatic. - buboy

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    1. I am not aware of any such details forbidding EADS to subcontract it out. Also, you are making the logical error of hasty generalization. Did you visit Indonesian Aerospace and made a direct observation? If not, then your observation is not applicable. You can find dubious practices in America and Europe and you can find good companies in India, China and Indonesia. Chinese fake cellphones are low quality, but all Apple iPads are made in China, and those are consistently thought as good quality products.

      Similarly, with regard to C-295, the only Indonesian company that matter is Indonesian Aerospace. Any other Indonesian companies you observe is irrelevant. Indonesian Aerospace has been making CN-235, C-212, and a couple types of helicopters for decades and their products are used by many countries, including once by Asian Spirit Airline of Philippine. All the PAF needs to do to ascertain Indonesian Aerospace's meticulousness is ask those users what their experience was. Admittedly Indonesian Aerospace has just started making C-295 since last year, but there's no reason to believe that they'll be less meticulous with C-295 than with CN-235 and C-212. Additionally, the AFP and DND have twice inspected Indonesian Aerospace in person. Former Chief of Staff of AFP General Eduardo San Lorenzo Oban, Jr. in 2011 and Undersecretary of National Defense Mr. Pio Lorenzo F. Batino in 2012. Since the AFP is still buying C-212 from Indonesian Aerospace, I believe this means that they found no problem with Indonesian Aerospace.

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    2. Buboy, the anonymous poster on top is right, Indonesian Aerospace is already a world-class aircraft assembler and manufacturer, that Airbus Military even gave them the reign on the C-212 production, is their strategic partner to produce the C-295, and is one of the pioneers of the CN-235 aircraft. So far, the PAF has not raised an issue on the quality of products made by IAe.

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    3. what a ridiculous, EADS has given their share market to PT.DI for their market in asia for efficiency reason, EADS won't share their market if they did not pass "standard and qualification"
      but sometimes for DND/PAF biddings quite complicated, pinoy have no money but they ask for number one products, it doesn't matter if pinoy have more money becouse a customer is a king. better pinoy keep asking your uncle to give them some old school toys,
      and i believe that pinoy can produce hi tect products more than other countries in asean even though singapore as well but still not comparable with pinoy's products lol.

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    4. Agree with buboy....
      Filipino's are more meticolous, we able to make more stealth aircraft in the world. Only a few people can see them, most of people only hear on news.... cheer
      Eduardo

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    5. Wow Buboy, Airbus let Indonesia build its planes because they have the capacity to do so. If PTDI built crap planes, then Airbus wouldn't put their trust on them. That's just common sense. It's actually a bilateral strategic boost getting SSVs from Indonesia.

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    6. The bidding is not really complicated, but PT DI lost the bid because they offered an aircraft (CN-235) that does not comply on the requirements for payload and passenger capacity, although it is possible that the CN-235 will be cheaper than the C-295. PT DI has no choice since the CN-235 is their only product close to what the PAF is asking for. Its not because of money issues so it's not really necessary to say something like that.

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    7. Buboy, your comment was picked-up in Indonesia, I don't think they agree on what you said.

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    8. guilty as charged. delete the comment. - buboy.

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    9. i have sympathy with buboy, although as i read technically iAe can produce the c-295 but in my opinion still european based military manufacturers(like EADS) is one of the worlds best(pioneer/design/manufacture/expertise) in producing military equipment and in case of c-295, EADS has the best facility, experience, men to build this aircraft. buboy speaks with filipino pride and he only wishes the possible best quality for the philippines and i guess nothing wrong with that max remember we are talking about philippine matters here not indonesians alright.

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    10. no offense to PT DI, but the one that won the bidding is EADS-CASA so I think the C295 will be built in Spain.

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    11. Skytrain, that's why I'm correcting a flawed mindset of putting pride out of factual and actual context. This too much pride on anything Filipino and looking down on the rest is actually what puts the Filipino in a laughing stock in world scene especially when we can't even prove we're the best because of the state of the country right now.

      In a globalized market you can't just single out certain countries as "the best" especially when Indonesia Aerospace is actually one of the major suppliers of parts and vital components of several Airbus and Airbus Military products, and is a vital part of Airbus Military's global operations. As Airbus allows PT DI to build the C-295, they won't compromise their name by allowing PT DI to fail on Quality because it's still an Airbus product. Besides, the PAF already chose the NC-212-400 over the Skytruck, so it means that the PAF and DND accepts the QC standards and build quality of PT DI.

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    12. Jendrick, it will still depend on Airbus because they might have lowered the cost for the PAF and they might only meet that by using PT DI's cheaper manufacturing costs and delivery. Although if the DND will have the post qualification inspections in Spain, then it means Spain is where the aircraft will come from.

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    13. Skytrain, lets not make statements without stating actual facts. How do you know PTDI staff don't get the same level of training as those in Europe? Let's not make stupid generalizations.

      That's right i said "stupid" because generalizations/assumptions like that are stupid. tsk tsk tsk

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    14. Ok, let's talking without offence... Sir Skytrain did you read this news? http://www.ebcworldnews.com/index.php/security/154-military/may-2013/1518-indonesia-promoting-transport-aircraft-in-the-asean-region-to-enhance-international-cooperation-cn295-on-asean-tour-to-show-its-capabilities-and-efficiency
      Even that aircraft will build in Spain, Indonesian PT.Dirgantara Indonesia still supply its parts, marketing rights and after sales service. (I am sure that PT.DI involved on this bidding).
      To Sir Buboy, you cannot make a generalization about a person behavior to a country. Ok?

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    15. talk about not making generalization and here they are generalizing me. the only sensible putbacks was the first comment. He is correct, whatever generalization I make is mute because the only company concern is IA and every country has bad apples and good apples. I didn't even say Filipinos are better than Indonesian. To tell you frankly, I would trust my life with most Indonesian than most Filipinos. And that's a generalization! You can see the context of why on some reactions here. Put simply, in my 13 years of corporate experience in 5 continents, there are cultural differences and technical differences. That's not stupid. Its a fact of life. You don't accept it, you can't adapt to those cultures. You cant relate to them and most importantly, you cant make the best of them. Maybe I am stupid and I did accept the first comment but what, I think, is more crazy is to ride the train and create "fantabulous" arguments. - buboy.

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    16. ^^ you must correct this word again " I've been to Indonesia and Filipino's are more meticulous to quality than them... "

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    17. dont make any stupid arguments if you dont know anything about IAE just buy and taste it and you never see the different with EADS and IAE

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    18. interesting quote regarding PT DI "Losing bidder PT Dirgantara Indonesia was disqualified because, among other reasons, the planes (CN235) it offered did not comply with the DND requirements. It is smaller than the C295.

      In its appeal, the state-owned firm offered to supply 4 aircraft instead of the required 3 to compensate for the deficiencies of its planes.

      But Velez dismissed it. "Specifications cannot be changed at the late phase of the project," Velez said. "While the request was laudable, it was not feasible to say yes to compensation by limitation," he added.

      The BAC supported Velez's arguments. The Indonesian firm's motion for reconsideration was denied.

      Velez also threatened PT Dirgantara Indonesia with possible "administrative sanction" or "blacklisting." Knowing the technical requirements of the aircraft project, he said the Indonesian firm should not have submitted its bid knowing that its planes are not qualified.

      Under bidding laws in the Philippines, a participating bidder that offers disqualified products at least 3 times could be blacklisted."

      Another interesting Quote "The BAC team that will conduct post-qualification stage is expected to fly to Spain on February 1 and aims to finish its probe by February 8. Without hitches, the project could be awarded to the Spanish firm by the end of February."

      From the quote above looks the C295 will be built in Spain not in Indonesia.

      http://www.rappler.com/nation/48451-crash-record-eads-casa-airbus-military

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    19. As a defense contractor and vendor, it is not worth bidding on Philippine gov't opportunities. Stay as far as you possibly can. Firstly, you have to buy the bid documents at arbitrarily high cost. Secondly, the eligibility requirements are absurd. Thirdly, the security/bonding requirements are archaic and not realistic. There is no guarantee that you will be paid and lastly, even if you get past these hurdles, chances are the stupid Filipinos and their politicians will invent controversy to malign the contractors. I have spoken to a lot of foreign contractors who expressed the same frustrations. I think it is better for the Philippines to just do the job themselves or not build anything at all.

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    20. Contractors are not rushing in to show off their wares, however. "We don't know if the money will come in, and the best equipment might not win anyway due to the corruption," says one official. "The best thing to do when it comes to the Philippines is to roll your eyes, offer your products with a shrug, and not expect anything to happen."

      See credibel source:
      http://www.flightglobal.com/news/articles/singapore-2008-southeast-asia-defence-market-opens-221436/

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    21. If you still refer to that old reference, then you do not have a fair view of what has happened for the past 5 or 6 years. The mere presence of several bidders, plus the unknown presence of so many multinational defense contractors in the Philippines recently (yes, and they are not even worthy of being reported in the news) means that a lot has changed since then. If the recent tenders are indeed unworthy, then you are not updated.

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    22. As part of Mutual Cooperation between Airbus and PTDI, all C-295 or CN-295 parts will be manufactured in both country. If you buy C-295 from Airbus, the wings, horizontal & vertical stabilizers, elevator, rudders, ramp door, port door, after sale services and supplies will be manufactured in PTDI, http://i27.photobucket.com/albums/c198/bhass99/manufakturCN295.jpg

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  4. Nice! Hopefully they come with external fuel tanks.

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  5. good moves by the afp to choose the spanish aircraft in contrast with the indonesian offered. technology wise and spacious cabin could make this aircraft more suitable for our air force..lem1

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    1. For military prestige, eh? So please if the PAF choose to buy from Indonesian Aerospace, just write it as it is.

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    2. in contrast nga eh...basahin mo ulit blog ko sa taas..bobo//

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    3. Its not for military prestige. There's no issue with the AFP if the aircraft comes from Indonesia. The issue is that the CN-235 doesn't meet the specified cabin space to fit the required passenger/paratrooper/stretcher/cargo parameters, while the C-295 can because it is longer.

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    4. sir max, do the paf no plans on acquiring A10 thunderbolt?

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  6. Excellent choice in my humble opinion. By the way, what happened to your Facebook page? I hope that whatever issue/s it may have encountered, if any, would be resolved soon. I always look forward to reading that page.

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  7. might as well get long range patrol aircraft in the same model. like the pick.

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  8. C-295 is good choice, hopefully PAF will also buy 2-3 A-400M in the future.

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    1. A-400s are too damned expensive for the current budget. at an estimated 180Million Euros PER PLANE, a single A-400 Atlas is comparable to getting 3 C-130Js, or over 4 F/A-50s, or 2 Gripen NGs

      besides, what would we need to A-400s for?

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    2. Jendrick, the PAF is looking more on the C-130J than the more expensive A-400.

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    3. @ AnonymousJanuary 16, 2014 at 12:11 AM, I'm fully aware that A-400M are expensive that is why I said in the future. I don't know if your aware of the Super Typhoon Haiyan Disaster, this shows the need for Heavy Lift Transport Plane like the C-17 or A- 400 and also Heavy Lift transport plane can carry more troops and equipment to the battle field like the Zamboanga Siege. I'm quite aware that the current budget only is good enough C-130s, and I reiterate what I said "IN THE FUTURE".

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  9. Sir, What happened to your fb page?? No updates... But good we have the CN 295..

    More Power to the AFP and Maxdefense...

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    1. Will inform everyone of the situation later on.

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    2. US is retiring some of there A-10 thunderbolt.. Hope PhAF can acquire it..

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    3. @Allen A-10 is not available for FMS due to its GAU-8 Avenger 30 mm rotary cannon which is deem too dangerous to fall into the wrong hands like extremist or terrorist. that is why no other countries operate the A-10 except the US.

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    4. Also, A-1O wings is being upgraded to extend the lifetime of the aircraft.

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  10. Good choice for the PAF. Max I read in the Philippine Star that China has approved invasion plans for Pag-asa island within the year. They even called us arrogant. If this is true at the current state of things we would have to give it up without a fight. I guess we're gonna be an island short this year. Just want to know what will the AFP do. Will we be showing some kind of balls or just give it to them. Thanks.

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    1. We don't know what the AFP will do as info like that is OPSEC.

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  11. i'm glad we're acquiring 30 of these. if we only up-arm at least half of our c-295 acquisitions with anti-ship missiles, the chinese navy will have second thoughts entering our territory. this is a good complement to the 12 squadrons of fa-50's that we're buying this year. 12 jets per squadron so that;s 144 jets all in all! wow! AFP modernization is a huge success!

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    1. The PAF is only acquiring an initial 3 units, not 30. And these are transport aircraft, not missile-carrying platforms. And the PAF's not buying 12 squadrons of FA-50, but 1 squadron of 12 FA-50s.

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    2. Yes Sir Max I miss the facebook. It somewhat spoiled my daily routine. Hope you get it up soon. Freddie

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  12. Max, anything we can assist regarding to our facebook site?

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  13. Sir max good to hear that by 2016 we will have additional assets such as C-295 medium lifter for PAF. Also, what happened to your FB????

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  14. Sir

    Another Nancy Binay...

    http://prudentinvestornewsletters.blogspot.com/2013/10/philippine-politics-south-korean-war.html

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  15. I heard in the news yesterday that 2nd bidding for the two brand new frigates has started (Jan 16/14) as per DND....So let's see.....

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  16. what about more C-130s for disaster reliefs, airborne operations and troop transport.

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    1. In addition to the C-212 and C-295, AFP also wants to buy two C-130 (probably used). There is also a proposal to restore three of the currently unflyable C-130 in storage. Those were brought up again last year after Typhoon Yolanda but I still don't know if the money to do so has been allocated.

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    2. The PAF recently confirmed that their request for funding for 2 more C-130s was recently approved by the president. Let's see what happens next, as the entire process may mean the usage of PDAF or getting approval from Congress.

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  17. A very strong smell of bribe....

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  18. So, Sir Max, the Alenia Aermacchi C-27J is already disqualified or what? Does it still have a chance to bag the contract?

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    1. Alenia did not participate in the last round of bidding. C-27J's price is actually around $50 million (see Peru's purchase). It doesn't meet the budget, which was around $40 million per aircraft.

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  19. As per News from a reputable network DND-PAF will be adding 2 additional C-130 for 2014 aside from medium Lift aircraft on the pipe line.

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  20. E so confirmed na ba ang purchase na ito, finalized na? O nasa bidding process palang? Installment o fully paid. Hindi malinaw yung article, sabi ang C295 lang ang nag-iisang nakapasang bidder, na pasado sa budget, ibeg ba sabihing napanalunan na nila ang kontrata?

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    1. All purchases are installment (progressive payments), and Airbus Military just won the bid but no contract yet. A post-bidding procedure will be made, and if it passes, a notice of award might be provided by March, and a contract afterwards.

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  21. These C 295 will be an excellent and timely addition to the aircraft fleet of the PAF. They have the lowest life cycle costs in class and will be able to replace the fuel guzzling Hercs in many tasks, thus lowering the operating costs of the PAF. The C 295 can transport troops and supplies while the Hercs can transport bulky equipment and vehicles that the C 295 can't handle. And when a great disaster strikes, such as Typhoon Haiyan(Yolanda), they will be able to greatly enhance the C 130 fleet, working in a complimentary manner with the Hercs, thus saving lives.

    A very smart buy, in my opinion.

    Laurence

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    1. No issue with C-295, it is a capable and proven aircraft. In my opinion it has an even better service support backing that the rest of the competitors, and all the previous media releases regarding previous crashes and product issues are nothing but crap from a source that is pushing for the cancellation of the entire program, which I am told by people within the PAF to be from one of the disqualified bidders.

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  22. Laurence, I agree with you...its a big boost on the mobility of our AFP considering the philippines is groups of Island...

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  23. Hey Max, is it possible to upgrade our retired F-5 A/B into F-5 E II? They can be used as added strengthen to our Air Force until such time they we have much better fighter jets comparable to F-16s and F/A-18s. Singapore is still operating these aircrafts despite the fact that they already have several versions of F-16s. Your opinion. Thanks.

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    1. F-5A/B and F-5E/F are totally different from each other, and won't be possible for conversion. Best option is to get improved or upgraded versions of 3rd or early 4th gen fighters like the Kfir Blk 60 and F-16s. Or get new Gripens E/F while Sweden loans the PAF their older A/B and assist PAF S211 pilots in advanced jet and conversion training in Sweden while the new planes are still being built. Singapore is already experiencing some problems with their F-5S/T and would be replacing them soon with the F-35.

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    2. sir max so you are little bit convince on KFIR blk 60 as an alternative in case FA-50 will not push through....I think this best options for PAF as LIFT and Fighter...before we acquire the MRF in the next program...

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    3. If I am to be followed, I'd say let the FA-50 deal continue and the get approved immediately, while the government starts the ball rolling to acquire the multirole fighter that it always failed to get. While PAF pilots train in Korea to become FA-50 pilot instructors, KAI must deliver its first batch of FA-50 to the PAF by next year.

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    4. Hi Max, in your guess-timate what will be our air force configuration be in the next 4 years, 24 lifts and 24 mrfs? Thanks. Freddie

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    5. Freddie, nah, I don't think so. Maybe 12 LIFTs, lucky if the PAF decides to get interim MRFs like the Kfir Block 60, probably 12 units is the most possible number at best, 0 at worse.

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    6. Hi Max, that's somewhat pathetic considering our neighbors are increasing their assets and inspite of the fact that the Phillipines has been enjoying high economic growth rates of 7 plus. At the end of the 4 years we may be just the same as we re today, like inflation eating up on real growth rate that we end up negative in real terms. DND and the airforce should be at it, must keep on going and should start the process of securing the MRF as soon as they have the Lifts signed up. The KFIRS would be a good interim measure. Do we have enough skilled human resources for the assets we are taking in up to 2015? Freddie

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    7. Freddie, the 7%+ growth rate is only for the past 2-3 years or so, and has only made the wealthy richer while it has not even made a significant impact on the country's poor, as well as increase government income for its own projects including the AFP Modernization. So don't bank on that growth rate yet, it's still too early. The AFP is has a lot of men that only needs further training to man these new assets. If you take a look at the manpower of the AFP, there was no significant difference when it has a lot of equipment to use in the 70s and now.

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    8. Hi Max, at 6 to 7% for the past three years and we are able to buy these assets ain't bad and we should continue to upgrade at 12 lifts or mrfs and 4 or 5 in two year cycles then we will be gaining some traction or create real growth in assets. Lets hope the bubble won't burst, the BSP has started to send some warning signs about the real estate sector. Also, nothing happens to malampaya because it will be an economic dislocation. Just a month's shot down has made power so expensive as what we are experiencing saved only by a TRO. Am hoping for the best. Sayang naman. On another side, I hope they improve the medical facilities for the soldiers and the equipment of an expanded engineering brigade. Both can be utilized for disasters. Former DPWH secretary Col. Vigilar used to tell me a lot about the capabilities of the ENG Brigades in the 60s.

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    9. Hi Max, forgot to sign my name in my reply earlier on the matter of the 7% growth. Thanks for the response. Freddie.

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  24. So Sir Max what happened to FA-50 acquisistion, any update from our sources?

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    1. MaxDefense will update as soon as confirmation is received. All MaxDefense can say is it's slowly in progress.

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    2. well we understand the process and the nego....sad is time is precious...salamat anyway sir.

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    3. The only thing i can say right now is the money isn't there yet.

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    4. well the sooner the DND negotiate the issue on FA-50 spare parts delivery and the 52% down payment the greater good for the nation and AFP...let's cross our finger...amen

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    5. so the chance of getting the FA-50 is on 50/50? :(

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  25. up to now no progress on the acquisition of FA-50....I don't know what happened on the negotiation and the 52% D/P required by KAI.

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    1. Good news. A compromise on the payment scheme has been reached and approved by the Palace.
      http://www.philstar.com/headlines/2014/02/21/1292810/palace-oks-payment-scheme-s.-korean-fighter-jets

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  26. It was on the news this morning that a 15% down payment was approved by the president including the progressive payment scheme that is acceptable to both parties. spare parts delivery is also resolved between Phil govt and KAI .

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  27. With this development it's time to get something that we can afford jet fighter like KFIR block 60 being offered to us by Israel and the MRF program that our Air force need like the F-16 with upgraded sensors and Electronically Active Scan Array Radar or the SAAB Gripen which being eyed by our Airforce. We hope before PNOY step down on 2016 he can lay-out the program and will be on the pipeline by 2016-17. Wishful thinking lang sir Max...We can have 12-KFIR for the meantime and probably initial of 6 Saab gripen as opening salvo for MRF program.

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  28. http://www.philstar.com/headlines/2014/02/28/1295451/spanish-firm-wins-bidding-supply-fixed-wing-aircraft

    Notice of award was given last week, implying that post-qualification process has been passed satisfactorily. Contract will be signed soon. Delivery time-table is estimated to be August 2015, March 2016, September 2016.

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    1. well that's a good news for the three (3) medium lift aircraft...

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