As per a Defence Ministry audit, fighter-jets produced by state-run aerospace and defence company, HAL (Hindustan Aeronautics Limited) under license are costlier than the same aircraft made by the Original Equipment Manufacturer (OEM), reported New Indian Express.
This report comes in the light of accusation levelled by the Congress against the BJP government in the multi-billion dollar Rafale deal. The opposition has alleged that HAL was sidetracked from the deal to benefit the Anil Ambani's Reliance Group.
However, Dassault Aviation, the French aviation major that manufactures Rafale aircraft, has time and again asserted that it chose Reliance as a partner, out of its own accord.
Taking the example of the Russian fighter Su-30 MKI, the report stated that while the Sukhoi made by the Russian company, JSC Sukhoi Company, cost 269.77 crores, the HAL version was priced at Rs 417.69 crore.
The Sukhoi manufactured by HAL is thus almost 55 per cent more expensive than the one manufactured in Russia. “The aircraft produced at HAL comes at a significantly higher cost when compared to direct purchase from the OEM,” the document added.
The review also found massive cost differences between Hawk trainers made by the British and those made by HAL. While the ones made by HAL cost Rs 88 crore, the ones made in the UK came in at Rs 78 crore. The report states that inefficiencies and exorbitant man-hour costs were behind the rise.
On the other hand, in a response to Hindustan Times (HT), a HAL spokesperson said, “Cost escalation from 2005 (for the Hawk jet) is normal. We also need to take into account the life-cycle cost of each product against off the shelf purchase from overseas. The indigenous benefits, the ecosystem HAL creates for the larger benefit of the country should be factored in also. Importantly, staggered or small orders deny economies of scale to HAL.”
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