Thursday, August 19, 2010

Aircraft deals with ‘friend’ Russia costing dear

17 August, 2010, DNA News
By Suman Sharma | Place: New Delhi | Agency: DNA

With an astronomical 155% increase in price in three years, the Russian Sukhoi-30 fighter aircraft seem to be going the Gorshkov way.

The deal for aircraft carrier Admiral Gorshkov was hammered in 2004 for $974 million (Rs4,560 crore), but it was renegotiated in 2010 at $2.3 billion (Rs10,770 crore).

After the Indian Air Force (IAF) wrote to the ministry of defence expressing concern at its depleting strength and pressing for immediate purchase of 40 Sukhois-30s under the fast-track provision, which does not warrant tendering or open competition, a deal was inked with Russia in 2007 for $1.6 billion (Rs7,490 crore), that is $40 million (Rs190 crore) a piece.

Latest figures tabled in parliament, however, show that another deal for 40 + 2 Sukhois (2 are replacements for aircraft that crashed last year), to be manufactured by Hindustan Aeronautical Limited (HAL) under licence from the Russian Federation’s Irkutsk, has been struck for $4.3 billion (Rs20,125 crore), that is $102 million (Rs480 crore) a piece.

The latest deal will make the IAF inventory 270-strong and India the largest operator of Sukhois by 2018, when HAL is to deliver the aircraft.

But the escalation in cost cannot be justified, especially since the aircraft being manufactured by HAL do not have enhanced features, such as the AESA (active electronically scanned array) radar. Defence experts, in fact, are of the view that since the assembly line is in Bangalore, where HAL is based, the latest deal should have cost less.

The deal becomes even more loss-making since American fifth-generation fighter aircraft, F-35, manufactured by Lockheed Martin are priced at $100 million (Rs470 crore) a piece. F-35, an advanced stealth fighter with features such as supercruise and AESA radar, competes with fourth-generation fighters, such as Eurofighter Typhoon and the French Rafale, in Norway and Denmark for deals.

The American F-16, again made by Lockheed Martin, is competing in India for IAF’s fighter jet deal with Typhoon and Rafale.
IAF already has these four-plus generation fighters, which are awaiting clearance for upgrade in a separate deal involving Irkutsk and HAL.

The “deep upgrade” will include enhanced combat features, systems and avionics, which would increase the flight performance and keep the aircraft in service for a longer duration. The biggest feature of the “deep upgrade” is the inclusion of the AESA radars replacing the passive radars in IAF Sukhois.

The twin-engine heavy-weight Sukhoi entered IAF service in 2000 after clearance in 1997, but has not undergone any upgrade since.

(All currency conversions are based on current rate and are approximate)

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