Pricing Issue for LCA Settled says DGA

Indian Air Force

New Delhi. The pricing issue for 83 Light Combat Aircraft (LCA)-Mk1A, which is to be manufactured by Defence Public Sector Undertaking (PSU), Hindustan Aeronautics Limited (HAL), has been finalised and the contract could be inked in the next few months, said Apurva Chandra, Director General (DG) Acquisition in the Defence Ministry.

Speaking at a seminar on Indian aerospace industry, jointly organized by the Centre for Air Power Studies and Society of Indian Defence Manufacturers here, he said that procurement of additional Akash surface-to-air missiles (SAM) for the Indian Air Force (IAF), worth Rs. 5500 crore, has also been cleared by the Union Cabinet last week and it would be signed within a week.

Chandra said the Defence Procurement Procedure (DPP) and the Defence Procurement Manual (DPM) 2009 are currently being revised.

“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,” he said.

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The Defence Acquisition Council (DAC) had given the initial clearance for the 83 LCA-Mk1A aircraft in November 2016 and the IAF issued the Request For Proposal (RFP) in December 2017. However, negotiations have been stuck due to the steep price quoted by the HAL which, the IAF had said, was more than the price of a Su-30MKI.

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

“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”

In August, Defence Minister Rajnath Singh appointed an 11-member committee headed by the DG Acquisition to revise the DPP and the DPM, with a six-month time frame to submit their recommendations. “We will come out with new versions by March 2020,” Chandra said.

There would be separate chapters on ship-building and air platforms, and sub-committees have been appointed to look into them. ‘’We would like to have a separate chapter on Information and Communication Technology (ICT) too”, he said.

In the DPM, the main thought process now was that it was common for all procurements, civil, stationary or military. “We should have three different approaches,” he said.

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