HAL’s jets costlier than foreign ones, says ministry audit
NEW DELHI: Fighter jets made by Hindustan Aeronautics Limited (HAL) – the Bengaluru-based defence public sector unit – cost more than the same jets produced abroad by the original equipment manufacturer (OEM), a recent review of the state-owned company by the ministry of defence (MoD) has found.
The department of defence production is studying the document, said an officer aware of the development who did not want to be identified.
Su-30MKI – the mainstay fighters of the Indian Air Force (IAF) which is manufactured by HAL under licence from Russia – is about ₹150 crore costlier than the ones made in Russia, according to the document, a copy of which has been reviewed by Hindustan Times.
“The aircraft produced at HAL comes at a significantly higher cost when compared to direct purchase from the OEM,” the document added.
A Su-30MKI made in Russia cost ₹269.77 crore whereas one made by HAL in India costs ₹417.69 crore, almost “₹150 crore” more per aircraft, the review said.
Similarly, there is a huge cost difference between the cost of the Hawk trainer aircraft manufactured by British Aerospace and those made HAL.
After long and torturous negotiations, India bought British made Hawk jets to train pilots in 2004. Of the initial 62 Hawk jets, 24 were to be bought in a fly-away condition and the remaining were to be manufactured under licence by HAL. Each Hawk aircraft manufactured Britain in 2004 cost ₹78 Crore. Those manufactured at HAL would have cost ₹88 crore that year. The cost Hawk aircraft produced by HAL continued to increase. In 2010, the cost shot-up to ₹98 crore and in 2016, ₹153 crore. The difference in price “is primarily due to lesser efficiency and exorbitant man hour rates,” the review has found.
Interestingly, the purchase of 126 Medium Multi-Role Rafale fighters from French Defence manufacturing giant Dassault that was negotiated by the previous government (108 would have been assembled in India by HAL) was scrapped because of high man hour cost at the Indian stateowned company. HAL would have needed 2.7 times more manhours than the French company for each aircraft.