With state defence manufacturer Hindustan Aeronautics Limited (HAL) staring at a depleting order book, the Indian Air Force (IAF) may benefit by being able to place an order for 83 Tejas Light Combat Aircraft (LCA) at a price which is significantly lower than the one initially quoted by HAL, Times of India has reported.
During recent negotiations HAL had quoted a price of Rs 450 crore per aircraft for the planned 83 aircraft bulk order. The IAF and Defence Ministry both considered this price to be unreasonable and set the ballpark at something below Rs 300. This price would exclude maintenance and other ancillary costs.
It was argued that Tejas loses its competitive edge to foreign aircraft like Saab’s Gripen which is priced below Rs 300 crore. HAL has also been asked to reduce its per aircraft delivery time from 2.5 lakh man hours to 1.5 lakh man hours.
As per the report, with the negotiations progressing nicely, the final figure is likely to be in the range of Rs 250 to Rs 275 crore. This would mean a saving of almost Rs 15,000 crore for the IAF which would otherwise have had to shell out Rs 37,350 crore under the Rs 450 crore per aircraft price.
The report claims that HAL may be forced to accept these terms as it currently only has pending orders worth Rs 45,000 crore and orders in its Nasik plant are expected to dry up by March 2020. The plant is currently manufacturing 12 Sukhoi Su-30 MKI jets.
As you are no doubt aware, Swarajya is a media product that is directly dependent on support from its readers in the form of subscriptions. We do not have the muscle and backing of a large media conglomerate nor are we playing for the large advertisement sweep-stake.
Our business model is you and your subscription. And in challenging times like these, we need your support now more than ever.
We deliver over 10 - 15 high quality articles with expert insights and views. From 7AM in the morning to 10PM late night we operate to ensure you, the reader, get to see what is just right.
Becoming a Patron or a subscriber for as little as Rs 1200/year is the best way you can support our efforts.