HAL Awaiting Payment From IAF

Defence Industry

New Delhi: With the government y come under fire over the Defence PSU Hindustan Aeronautics Limited (HAL) for borrowing Rs 1,000 crore from banks in an unprecedented move for paying staff salaries and routine expenses, a report in a national daily said that the Indian Air Force (IAF) has a cumulative arrears of around Rs 20,000 crore.

The PSU is working towards completing by December the first indigenous Light Combat Aircraft (LCA) made to the Air Force’s final
final operational clearance (FOC) configuration, according to R Madhavan, CMD of HAL which manufactures the planes for the IAF.

“Beyond that, we aim to produce one LCA every month,” he said, noting that the FOC for the fighter plane was given in February this year. The IAF has bought 20 LCAs in the FOC version, having already received the first lot of 20 in the Initial Operational Clearance (IOC) version.

“We have the capacity to make 16 LCAs a year (at the Bengaluru complex) We also expect that the firm order for the approved 83 planes also comes in,” he said. The order is worth around Rs 59,000 crore.

However, after recent price negotiations on this purchase, HAL has not received any order yet. Right now, money is its first concern, Madhavan said. Fresh orders apart, the defence PSU urgently needs the cumulative arrears of around Rs 20,000 crore from the IAF.

Last year HAL had to borrow Rs 1,000 crore from banks in an unprecedented act for paying staff salaries and routine expenses.

“Until now we have somehow managed [our finances] with our funds and from bank loans. I hope something will come through soon for us to maintain the level.” Expectation is also on the revised estimates in the defence budget and some money from deliveries to the Army.

Which is why, he said, even if the order for the 83 LCAs came in, “We can take it up only if it comes in with the money associated with it.” The money is needed for materials, besides design work taken up with development body, the Aeronautical Development Agency.

HAL, he said, is also keen on contesting for Malaysia’s tender for 12 fighter planes in the LCA category.

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