The Defence Ministry has appointed a committee to look into the costing of products and military platforms manufactured by defence public sector undertakings (DPSU), Defence Minister Nirmala Sitharaman has said.
The first project to be reviewed is the indigenous light combat aircraft, Tejas, being manufactured by Hindustan Aeronautics Ltd. (HAL).
This development comes after the cost quoted by the HAL turned out to be higher than those of many imported fighters.
Expensive platforms
Also several platforms manufactured under licence in India have been found to be more expensive than the imported platforms.
“In general, we have asked a committee to see how the costing of products manufactured by the DPSUs is being done,” Ms. Sitharaman told presspersons on Friday. The committee will be chaired by the Director (Costs) in the Ministry.
She said the Indian Air Force (IAF) had come forward requesting that the LCA be the first product to be reviewed by the committee. “We feel there is a need for a review,” she said.
The committee will review all military hardware and systems being manufactured by the DPSUs. The report is expected to be submitted within 60 days, Ms. Sitharaman said.
The IAF has committed to inducting 123 Tejas jets in various configurations. Of these, 40 have already been ordered and negotiations are under way for 83 Mk-1A variants featuring specific advancements. However, the HAL has quoted over ₹463 crore for each aircraft, while the advanced twin-engine Sukhoi-30 assembled in India costs just over ₹400 crore. This price is also a steep rise in comparison to the LCA Mk1 variant for which the HAL quoted ₹100 crore.
There have been other instances where licence-manufactured products of the HAL have been costlier than those imported. The Su-30 fighters imported from Russia and the advanced jet trainer Hawk from the U.K. are cheaper than those manufactured by HAL.
