The euphoria within the defence establishment over the induction of the first indigenous Light Combat Aircraft into the IAF appears to have subsided with the Defence Ministry forming a committee to look into the “high price” demanded by Bengaluru-based public sector manufacturer, Hindustan Aeronautics Limited (HAL), for Tejas Mark1A.
Sources told The Indian Express that in response to a request for a proposal for 83 Tejas Mark1A fighter jets issued by the IAF in December last year, HAL quoted a price of Rs 463 crore per jet in April. This raised eyebrows in the government, sources said, as the price compared unfavourably even with more modern foreign fighters. “The HAL supplies the more modern Russian Sukhoi fighter, which it assembles at Nashik, at Rs 415 crore. The Russians supply it at Rs 330 crore. The Swedish Gripen was offered to us for Rs 455 crore, and F-16 for Rs 380 crore, and both were to be made in India. The HAL itself gave us Tejas Mark1 at Rs 100 crore less. This price for an improved version seems high,” sources said.
Concerned about the price for an indigenous fighter jet, which the government has been keen to promote under Make in India scheme, the committee set up by the Defence Ministry will look into the pricing of military equipment manufactured by defence PSUs. The committee is headed by Principal Advisor (Cost) in the ministry and is likely to submit its report in the next few weeks.
Once the committee submits its report, the ministry will form a commercial negotiations committee (CNC) to bring down HAL’s price for the jet. The contract for 83 jets, sources said, will take another year before it is finally signed.
According to sources, the Defence Ministry is also concerned about the delay in supply of the existing order of the first lot of 40 Tejas fighter jets. In last three years, only nine fighter jets in Initial Operational Clearance (IOC) mode were supplied against an order of 20. The order for another 20 Tejas jets in Final Operational Clearance (FOC) has not even begun, as the FOC has not yet been attained by the aircraft. The ministry has also agreed that the HAL will supply eight trainer aircraft out of 40, after the 36 Tejas Mark1 have been supplied. “The idea was that HAL will produce 18 Tejas fighters every year. That is the only way we can provide IAF to make up its numbers as its older fighters go out of service. But there has been a delay and we are in touch with HAL about it,” sources said.
The ministry had also asked IAF about allegations that it had made constant changes in ASQR (Air Staff Quality Requirements), which could have led to the delay. They found that there have been no changes in the ASQR of Tejas Mark1A, since it was first formalised in 2014. Even in the case of Tejas Mark1, the IAF had given 135 concessions on the ASQR to HAL.
Bharat Dynamic Limited (BDL) expects Akash-II missile order worth about Rs 14,000 crore in the next couple of years from the central government,said a top official of the Defence PSU. Chairman and Managing Director of BDL, VUday Bhasker also said the current order of Akash will be completed in the next two years and expected to have five growth in revenues during the next two years.
Last year the PSU clocked Rs 4579 crore. “We are trying have a five percent annual growth in the coming couple of years. After that we are expecting to have a much bigger growth because we expect to have some high value orders. Akash II regiments is the new order. The DAC( Defence Acquisition Council) has cleared it.”
“That(new)order, we need to supply from 2020-21 onwards.The order is for a few years. It will be a bigger order, I can’t specifically tell the size of the order. But it will be of the current order size. Currently we ha dAkash order worth Rs 14,000 crore in 2012 when we received it,” Bhasker told PTI.
Akash is an all-weather medium-range surface-to-air missile.Developed by the DRDO, the missile system has the capability to neutralise aerial targets such as fighter jets, cruise missiles and air-to-surface missiles as well as ballistic missiles.
BDL,in 2011 signed a Rs 14,000-crore contract with the Indian Army for the production of Akash.The present order will be completed in the next two years.He, however, said the new order will have some development component and it has to go through some development phase.
The missile should have seeker, which is a specialised instrument which seeks the target, he added. Replying to a query, the BDL official said he expects five per cent growth in revenues for the next couple of years.
On the upcoming Amaravati facility in Maharashtra, Bhasker said it is expected to commission from this year and full scale production will start from 2021.
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