IAF and HAL finally sort out pricing issues of Light combat aircraft

It is to be noted that it's been more than a year since the two parties are negotiating over the price of LCA-Mk1A aircraft.

The Indian Air force (IAF) and Hindustan Aeronautics Limited (HAL) has finally sorted out the pricing issue of 83 Light Combat Aircraft (LCA)-Mk1A. Apurva Chandra, Director General (DG) Acquisition in the Defence Ministry said that pricing of Tejas Mk1A, which will be manufactured by state-owned HAL, has been finalised and the contract is expected to be signed within next few months.

Moreover, as reported by the Hindu, the Union Cabinet, last week, cleared the additional procurement of Akash surface-to-air missiles (SAM) for the IAF, worth Rs 5,500 crore and the contract is likely to be signed within weeks.

At a seminar on Indian aerospace industry jointly organised by the Centre for Air Power Studies and Society of Indian Defence Manufacturers, Chandra said, "Pricing of the LCA, which was under discussion with the costing committee, has been finalised two days back in a meeting with the Secretary of Defence Production. Now, discussion for the support package is on. That also should be finalised in a month or two. So we should be in a position to sign the contract for the aircraft in the next 3-4 months."

Tejas Light Combat Aircraft — Tejas fighter aircraft performs during Aero India 2019, at Yelahanka Air Force Station in Bengaluru . (ANI photo)ANI

It is to be noted that it's been more than a year since the two parties are negotiating over the price of LCA-Mk1A aircraft. The initial clearance for as many 83 of these aircrafts were given by The Defence Acquisition Council (DAC) in November 2016. After the clearance, the IAF took another year to issue Request For Proposal (RFP) in December 2017.

However, further negotiations were halted due to exorbitant price quoted by the HAL, which the IAF had argued was more than the price of a Su-30MKI.

The order of 83 additional jets is in addition to the 40 LCAs order already placed by the IAF in two batches of 20 each in the Initial Operational Clearance (IOC) configuration and the Final Operational Configuration (FOC) configuration.

Further, the Ministry of Defence is under the process of revising the Defence Procurement Procedure (DPP) and the Defence Procurement Manual (DPM) 2009. Defence Minister, Rajnath Singh in August appointed 11-member committee headed by the DG Acquisition to revise the DPP and the DPM. The committee is tasked to give its recommendation within six month.