MoD panel to probe costlier Made-in-India equipment

Defence Minister Nirmala Sitharaman has constituted a committee headed by the director of costs in her ministry to examine the armed forces’ complaint that most of the military equipment procured from the Indian public sector companies are costlier than the prices quoted by the foreign makers.

The committee has been asked to give its report by August-end as the defence minister doesn’t want the government’s Make-in-India policy get bad name from the forces craving for permission to buy from the original manufacturers unless the defence public sector companies lower their prices.

The first case sent to the committee for examination is from the Indian Air Force on the Hindustan Aeronautics Limited asking for Rs 463 crore a piece for the Tejas light combat fighter jet Mark1A as against Swedish Gripen offering it at Rs 455 crore and US F-16 still lower at Rs 380 crore and both prepared to assemble them in India. The IAF wanted 83 Tejas jets from HAL, a company owned by the defence ministry.

The Sukhoi fighter which HAL assembles at Nashik is priced at Rs 415 crore while the IAF will get it much cheaper at Rs 330 crore if bought directly from the Russians.

Besides these two aircraft, the committee has been asked to check prices of each equipment of the public sector units.

In 2012, the Tatra truck supplied by Bharat Earth Movers Limited were found to be overpriced. These multi-axel trucks are used to transport missiles.

More recently, the purchase of four warships from Russia has been hit as two of these to be built at the Goa Shipyard Limited are costing much more. The GSL has informed the government that it will require upgrading its facilities and skilled manpower which will further add to the cost.

Almost similar is the case of the Dornier 228 that was originally made in Germany. It’s now much in demand as it is used by IAF as well as Navy and Coast Guard.

The committee will also study the Indian companies costing formula of artillery guns, trucks, ammunitions, missiles, etc to know the right price at which the Forces should get their supplies, the defence ministry sources said.

Meanwhile, almost 18 months after the ministry cleared production of 464 new tanks of the T-90 series by the Heavy Vehicles Factory at Avadi near Chennai, the cabinet committee on security headed by PM Modi is to clear the Rs 3,500-crore project.