Tejas Mk.1 & Mk.1A: News & Discussions: 23 February 2019

ashishvikas · Post by **ashishvikas** » 25 Aug 2019 09:44

83 LCAs Order: HAL may finally agree to lower price

http://m.timesofindia.com/articleshow/7 ... aign=cppst

According to sources privy to the negotiations, HAL quoted Rs 450 crore per aircraft as the basic price. “MoD and IAF (customers) are firm that this price is not competitive and are negotiating for a price that is less than Rs 300 crore per aircraft. Negotiations are nearly complete and final price is likely to be in the range of Rs 250 crore and Rs 275 crore,” a source said.

If the price is Rs 275 crore, then the value of 83 LCAs would be about Rs 22,825 crore compared to Rs 37,350 crore if it was Rs 450 crore.

yensoy · Post by **yensoy** » 25 Aug 2019 10:34

That is a huge difference in price. Does HAL have so much elasticity in price determination, or are they heavily padding their price? Or will they lean hard on suppliers to reach the magic number? Or will govt put in some funds by other means - to cover pensions, or assembly line setup costs etc? Will IAF/MoD be asked to be more predictable in their orders and payments? More timely in certifications, with extra charges for changes (which is where a big margin can be made)?

A combination of all the above? Someone with a good understanding of business can draw up a great contract which can appear to be low cost to MoD yet be profitable for HAL; not sure if IAS babus and PSU managers have that set of skills.

Shalav · Post by **Shalav** » 25 Aug 2019 10:44

A lot of that originally quoted price is the cost of imported components. I wouldn't be surprised if HAL leans on the govt. to separately procure the engines and other imported items and then reduces the price appropriately.

Inevitably with a separate and very likely uncoordinated procurement process because the customer wanted a lower cost there will be delays as the component-procurement-speed mismatches production-speed. HAL will just shrug it off as "not my problem". The DDM will have a field day criticizing HAL and desi production capability, there will be lots of rona-dhona on this board with 25+ pages of theories about why and how everything should be privatized.

Vidur · Post by **Vidur** » 25 Aug 2019 12:57

Karan M wrote:
Vidur wrote:
No attempt to delay Tejas. Malicious to blame IAF. Re process I suggest a group of 3 posters study DPP in detail and using it do a bit of Sherlock Holmes work to see what is happening. This will help learning, critical thinking and improve quality of this forum. A post below made some useful points.
I am familiar with the DPP (its warts included - which I'll get to in a minute) but see no clarity/transparency in any reports from the MOD about where the LCA Mk1A is in the process!

I was hoping that a team of 2/3 members like you would go in depth into the procurement process, identify which stage we are in and what is needed to move to next stage. I know it is perhaps a boring activity but it is very relavent for a large number of discussions on the forum. But over my time here I have noticed that people do not like doing it. There was only one person who really grasped it and he is no longer on the forum. I would again urge people to read his blog. The best summary of all that ails defence and recommendations for reform. It is borne from an in depth study of the issue and a grasp of the motivations of all stakeholders. I cannot recommend it enough. http://tejasrange.blogspot.com/2019/06/ ... -will.html

Having said that I will address your points. I am not handling this case but I do have a good idea of the issues from colleagues.

1. Tejas Mk 1 A 'case' - The word 'case' refers to a procurement of any item and is initiated by defence forces. The MK IA case is at the contract negotiation stage. HAL had submitted a pricing proposal which was exorbitant. This has come into the public domain. This is being redone. Once it is redone there is firm intention to place orders. No one should doubt that.

2. Budget - The budget was a setback. We do not have adequate funds to pay for all contractual obligations this year so new contracts will need to be structured to take that into account.

3. Information flow - I agree information flow is not good but that is a characteristic of Indian Government. It is also difficult to give information at this stage. The contract negotiation stage is on and this is sensitive even though its with a DPSU. Before and after that stage information flow will be more.

4. Corruption and delaying favouring imports - This is simply not true. Rafale took 15 years for procurement. Arty guns procurements failed multiple times. Remember that imports are always either of products that have a long track record or from companies/countries that have a long track record. We simply do not have that track record in domestic industry - private and public. 20 % of all ammunition made by OFB by value is defective. 20% ! There are numerous cases of fuses and propellants being faulty. Over the last 10 years we have seen over 20 fatalities and more injuries to armed forces personnel using defective shells, grenades, rockets. Pinaka an excellent weapon system was badly let down because its rockets were unreliable. Recently 2 IAF test pilots with HAL died as their Mirage 2000 Upgrades collapsed on the runway. These are just a very few examples. I have met some families of these brave hearts and I will say with no hesitation that DPSUs and OFB especially OFB have a lot to answer for.

5. Supporting private industry - we have failed miserably here. I am personally disappointed with this. If you see my first substantive post on this forum I bring this out. I am very concerned that private industry will loose interest soon. Strategic Partnership model has taken years to come out and now we have let it be hijacked by DPSUs and OFBs. Its intention was to build a private ecosystem in India and was open to only private sector - FICV was one flagship project. But now rules have been changed and OFB and DPSUs are allowed. This has made this policy redundant.

6. AAR refuelling - I am quite sure AAR was part of the original specifications of Tejas Mk 1A.

7. SPJ - I have no idea and frankly I don't know the technicalities of equipment

8. Dysfunction in MOD - Agree. I have said this many times. My recommendations on this have been made before and I fully endorse Akshay's article

May I ask - are you a commercial side with HAL or a private sector.

Karan M · Post by **Karan M** » 25 Aug 2019 16:06

Thank you for the response.

In my post above, I had surmised, based on available evidence that the Mk1A was still in the Contract Negotiation Stage - I am somewhat disappointed to find out I was correct, but the positive is the issue seems to be (mostly) resolved with HAL agreeing to a lower price. Another factoid is that MK1A D&D has not stalled as HAL went ahead with the same, using internal funds in anticipation of the orders being placed. This is a big deal, as at least we haven't wasted too much time.

I am with the commercial private sector, and we have sold to various PSU/DPSU on occasion. My entire overview of the DPP is based on similar processes followed for organizations which develop products for the corporate sector. IMHO, the whole DPP & our procurement system is plagued by "avoid risk, lest it lead to accusations of corruption" syndrome, wherein far too many people are needed to sign off, or ensure a broken process is followed, but the spirit of the procurement or the urgency driving it, is completely broken.

The Information Flow issue is a critical aspect because unless it improves, there is going to be very little impetus to improve things, bar complaints from the services, vendors etc. It can be in a non classified manner. We don't need to know the specific costs being discussed in the Price Negotiation Committee for the contract stage, merely which stage the procurement is in and depending on the specific project, which are the key issues holding it up. Most of this stuff leaks via the media anyhow, with a negative spin. Reports on the Tejas are a prime example. Better that the MOD control the information flow in a timely manner.

Coming to this:

Recently 2 IAF test pilots with HAL died as their Mirage 2000 Upgrades collapsed on the runway. These are just a very few examples. I have met some families of these brave hearts and I will say with no hesitation that DPSUs and OFB especially OFB have a lot to answer for.

While you are indeed correct about the huge issue with QA/QC especially with OFB made ammunition, isn't it the case that with the Mirage 2000 crash, the true defect has not yet been pinned down? There was a heavy discussion on the forum, and the culprit seems to be a FBW design issue from Dassault which has never been rectified and still exists, something HAL cannot and will not touch.

On the other hand, the OFB's ammo record is particularly problematic (I'd actually call it a full blown disaster). You can see my posts in the forum (search function, by post with keyword OFB) to see other instances of their record. I would suggest privatization of OFB and offloading complex ammunition to the pvt vendors like Bharat Forge, Maspack, PEL, and Solar industries who seem to do a much better job than OFB on a war-footing. If due to political reasons if OFB can't be privatized, at least we have alternate sources of supply till they get to some degree of competence in ammo manufacture. This needs to happen ASAP.
Pinaka is a perfect example - you have SOLAR, PEL - both are competitors, have TOT from ARDE per reports, are establishing full production lines (as versus merely supplying parts of the motor) - they can & should be built into alternatives to the OFB. The same for any ammunition the OFB has not been able to master. How many more troops can we sacrifice for the sake of keeping politically powerful unions happy? Need not happen with fanfare either, and even if the OFB do go on strike, now you have alternatives.
We are literally held hostage by unions who wont evolve and nor do they care. I just posted a recent video on OFB, doing Arjun manufacture. While they keep harping on quality and some of the staff are quite proud, its quite obvious their production processes are way behind those of the private sector or even other PSUs.

About the SPJ - that was my point, when MOD folks otherwise keenly involved and interested in the topic of Tejas, can't "put" the troika of HAL, ADA, IAF on the spot as the late Shri Parrikar did, we are in trouble. The exigencies of dealing with the myriad daily bureaucratic problems, the process focus, the budgetary squeeze etc are overwhelming. So we clearly need some kind of technical team which is beholden to none but strategic interest - namely indigenization and combat capability of the forces, as contradictory as the 2 may be - to project/program manage and take quick decisions without merely taking a services presentation as the answer or buying assurances from the DPSU complex, that all is well. Both have their own organizational interests to push. The SPJ is merely one example, there are many more.

I am told that Mr Parrikar held umpteen discussions literally holding the IAF and HALs feet to the proverbial fire and getting them to sign off on a relatively simple agreement for the Tejas. Even now, with a production slowdown staring them in the face, HAL was quoting absurd numbers per LCA and nor could the MOD have them respond asap (we are in August 2019 already). Or the reports comparing Tejas to Rafale without even bothering to have an apples to apples compare. I read GOI reports and I deeply feel it is important to cross question the presenters and have them evaluate more alternatives than they are used to or even revisit their decisions.

The services procurement mess is also partly due to their flawed prioritization (IMHO) as with problems with vendors, and budget limitations. For reasons of space, I won't go further here, but there are so many "gaps" in the services inventory which could have been managed with their existing budget and with some hard timely, decisions on upgrades rather than relying on imports of the "next best thing" which will just end up breaking our already strained capex to a completely unreasonable level, whereas existing gaps remain and are not fixed either. This is just dismaying.

So you need a team which is independent, perhaps works with the CDS, now that it exists, to rationalize procurement across all three services and use the existing financial allocation as a guide to decide what will be available even the coming year, figure out which programs give the most combat capability/fix glaring gaps. And then a program oversight board to query/question assumptions made by the respective program teams when they are stuck on issues which should be resolvable in a straight forward fashion. I can literally, using open sources, quote so many examples of fancy procurements or domestic programs derailed because of similar issues. This is the reason, in corporate procurement/decision making, you have people from other groups/business units act as judges for go/no-go/business planning decisions.

The budget aspect is concerning as the Govts focus on firefighting the prior issues in the financial system, sops, and welfaronomics has sapped up a lot of funds. I empathize with them, but answers have to be found.

On the plus side, I see that indigenous programs have been given a greater fillip R&D wise, instead of relying on mass imports. But I do hope orders are placed. And this where we need to look at procurement which gives us the most bang-for-our-buck. We are literally looking at new procurement programs which the developed west would balk at, yet existing platforms lack upgrades.

Vidur · Post by **Vidur** » 25 Aug 2019 16:42

Thank you for your thoughts. Re the services angle, the main issue is that they are not decision makers and have virtually no financial powers. The majority of the problem lies with us in the ministry. Let me give you an example - I won't take the name of the system but a private sector player created an artillery gun and wanted to test it. They needed a range and the army agreed to provide it. It was viewed very dimly by the ministry and censures were given. Now over 5 years later a policy has been evolved to allow the armed forces to give testing facilities.

As I have mentioned many times armed forces have very little control on budget or determining direction of development. I know people here don't understand this because they use the American template where armed forces have a lot of control. Our system is very different. Again I have expressed this many times.

Your suggestions on program management are good but its hard for people like me to come up with these solutions. Our expertise is administartion of civil development projects like roads etc, state revenue etc. We are not equipped and frankly not interested, and most importantly not emotionally invested in these complex defence project management projects. I have a personal interest but very few of my colleagues do.

Ideal solution is a team of armed forces and people like yourself. Again read Akshay's blog. He makes the same points.

Rakesh · Post by **Rakesh** » 25 Aug 2019 19:13

ashishvikas wrote:83 LCAs Order: HAL may finally agree to lower price

http://m.timesofindia.com/articleshow/7 ... aign=cppst

According to sources privy to the negotiations, HAL quoted Rs 450 crore per aircraft as the basic price. “MoD and IAF (customers) are firm that this price is not competitive and are negotiating for a price that is less than Rs 300 crore per aircraft. Negotiations are nearly complete and final price is likely to be in the range of Rs 250 crore and Rs 275 crore,” a source said.

If the price is Rs 275 crore, then the value of 83 LCAs would be about Rs 22,825 crore compared to Rs 37,350 crore if it was Rs 450 crore.

Rs 250 crore - Rs 275 crore works out to what? USD $35 - $40 million per aircraft? Is my conversion match correct?

At that price, I sincerely hope the MoD orders another 2 - 4 more squadrons worth and upgrade the first batch of two squadrons of Mk1s to the Mk1A standard. 8 - 10 squadrons of the Mk1A (in total) would be a nice shot in the arm for Make in India and will address the squadron shortage much quicker than MMRCA. At present, it will be 2 squadrons of the Mk1 and 4 squadrons of the Mk1A.

Is two to four more squadrons asking for too much?

khan · Post by **khan** » 25 Aug 2019 19:33

40 million per plane is a more than fair price where IAF & GOI have footed the R&D bill & all HAL has to do is assembly.

darshan · Post by **darshan** » 25 Aug 2019 19:36

GE is not doing well and Trump is always looking for big order headlines.

fanne · Post by **fanne** » 25 Aug 2019 20:34

Vidur wrote:Thank you for your thoughts. Re the services angle, the main issue is that they are not decision makers and have virtually no financial powers. The majority of the problem lies with us in the ministry. Let me give you an example - I won't take the name of the system but a private sector player created an artillery gun and wanted to test it. They needed a range and the army agreed to provide it. It was viewed very dimly by the ministry and censures were given. Now over 5 years later a policy has been evolved to allow the armed forces to give testing facilities.

As I have mentioned many times armed forces have very little control on budget or determining direction of development. I know people here don't understand this because they use the American template where armed forces have a lot of control. Our system is very different. Again I have expressed this many times.

Your suggestions on program management are good but its hard for people like me to come up with these solutions. Our expertise is administartion of civil development projects like roads etc, state revenue etc. We are not equipped and frankly not interested, and most importantly not emotionally invested in these complex defence project management projects. I have a personal interest but very few of my colleagues do.

Ideal solution is a team of armed forces and people like yourself. Again read Akshay's blog. He makes the same points.

It is not hard to guess it is gun by Bharat Forge/Kalyani group!! I am very glad that army had agreed (my initial foolish suspicion was it was Army delaying it as the gun would have passed with flying color and Army had to drop imports of similar gun), but MOD had dropped the ball. If you look at the bigger picture, it is MOD dropping the ball. If I may add, MOD babus will be what they are, in the end it is a political decision to be made and a bold politician is needed to make the call (one who is incorruptible, but most important, have the ability to see through any bad/wrong decisions by ministry).

The above is a perfect case - While there are many players in artillery (I will list them, with whatever knowledge from public sources I have)

1. OFB/DRDO (Bofors tech already provided around 1986-87, full tech) - They sat on an already paid, fully provided Tech for this gun for almost 35 years to start using this tech to build a gun. This when for these 35 guns were the best guns we had and we cannot have had enough of them. Talk about initiative, yes that includes all various constraints as MOD sanction, budget, politics etc. You have to look at the whole ecosystem as a whole, no matter how much we wish, it will be one whole also in the future with all its greatness and shortcomings. The ATAGS is a step up (new design) being done after a budget and approval and a right outcome from this kind of ecosystem, when it works best
2.L&T - Vajra - Nothing but very efficient screwdrivergiri by a very efficient private company. They are just assembling a South Korean kit and making them ahead of schedule. If hey get x guns, they cannot make the x+1 gun by their own, unless they put quite decent amount of money and time. If the foreign partner pulls out, they cannot make anything, let only support the system. The R&D and knowledge base increase is nothing to write home about.
3.TATA Sed gun is similarly a foreign system assembled, perhaps painted in India. If the foreign partner pulls out, they cannot make anything, let only support the system. The R&D and knowledge base increase is nothing to write home about.
4. Bharat Forge - They bought a whole factory from one of the best foreign source that made artillery gun (on their own dime, almost a decade ago before they had even an opportunity to sell a gun), dismantled it piece by piece and resurrected that factory in India. They own the IP and the gun (and no surprise, on their own they can provide many variations of the gun, different caliber, light weight etc.). That is called hunger. They can make the x+1 gun even if all the foreign supplier stop supplying to India. They can also make the next step up gun when and if needed.
During Kargil war, we were short of artillery rounds. Govt had appealed to no one in general for hope (we were importing $1000/round from South Africa). The kalyani group top official 'barged' into govt office and provided 1 lakh rounds in short time). Contrast this with another very famous company at that time, developed body Armour for army but was costly. Govt wanted order in lakhs (million?), the company refused to lower prices. Only after 20 years now, army is getting Armour (btw that company is in contention of artillery guns as well).

If you read the above piece and go to kindergarden and ask who should win India's order of artillery, they will be able to tell you who. But ask MOD and its babus, they will rather sanction that company even from testing their gun. I do not think it is because we have incompetent people, it is something else and it should be accounted for

Vips · Post by **Vips** » 25 Aug 2019 22:34

Rakesh wrote:
ashishvikas wrote:83 LCAs Order: HAL may finally agree to lower price

http://m.timesofindia.com/articleshow/7 ... aign=cppst

According to sources privy to the negotiations, HAL quoted Rs 450 crore per aircraft as the basic price. “MoD and IAF (customers) are firm that this price is not competitive and are negotiating for a price that is less than Rs 300 crore per aircraft. Negotiations are nearly complete and final price is likely to be in the range of Rs 250 crore and Rs 275 crore,” a source said.

If the price is Rs 275 crore, then the value of 83 LCAs would be about Rs 22,825 crore compared to Rs 37,350 crore if it was Rs 450 crore.
Rs 250 crore - Rs 275 crore works out to what? USD $35 - $40 million per aircraft? Is my conversion match correct?

At that price, I sincerely hope the MoD orders another 2 - 4 more squadrons worth and upgrade the first batch of two squadrons of Mk1s to the Mk1A standard. 8 - 10 squadrons of the Mk1A (in total) would be a nice shot in the arm for Make in India and will address the squadron shortage much quicker than MMRCA. At present, it will be 2 squadrons of the Mk1 and 4 squadrons of the Mk1A.

Is two to four more squadrons asking for too much?

So what changed that the price of each bird dropped by so drastically - Rs 175 Crores? Apparently HAL thought Price Gouging is not just done by the foreign suppliers, but it should too, it thought there is no alternative and GOI will fork out whatever it asks for.

PratikDas · Post by **PratikDas** » 25 Aug 2019 23:39

Vips wrote:
Rakesh wrote: Rs 250 crore - Rs 275 crore works out to what? USD $35 - $40 million per aircraft? Is my conversion match correct?
So what changed that the price of each bird dropped by so drastically - Rs 175 Crores? Apparently HAL thought Price Gouging is not just done by the foreign suppliers, but it should too, it thought there is no alternative and GOI will fork out whatever it asks for.

Alternatively, or additionally, the costs sunk by HAL into the production lines may have already been recovered by the time the new production run as a result of this new contract kicks in.

Gyan · Post by **Gyan** » 25 Aug 2019 23:51

Actually it may be indirect way of forcing the foreign vendors of LCA components to reduce prices. My guess is reduction will mostly come from foreign vendors like Engine, Radar etc.

srai · Post by **srai** » 26 Aug 2019 16:45

My guess is that most likely HAL took out 5-year type of PBL support (as seen with Rafale, C-17, C-130, etc) from the Mk1A contract to reduce those initial prices. More closer to just the fly-away unit prices. GoI/IAF will end up paying those support costs eventually while operating the fleet.

Vips wrote:
Rakesh wrote: Rs 250 crore - Rs 275 crore works out to what? USD $35 - $40 million per aircraft? Is my conversion match correct?

At that price, I sincerely hope the MoD orders another 2 - 4 more squadrons worth and upgrade the first batch of two squadrons of Mk1s to the Mk1A standard. 8 - 10 squadrons of the Mk1A (in total) would be a nice shot in the arm for Make in India and will address the squadron shortage much quicker than MMRCA. At present, it will be 2 squadrons of the Mk1 and 4 squadrons of the Mk1A.

Is two to four more squadrons asking for too much?
So what changed that the price of each bird dropped by so drastically - Rs 175 Crores? Apparently HAL thought Price Gouging is not just done by the foreign suppliers, but it should too, it thought there is no alternative and GOI will fork out whatever it asks for.

Gyan · Post by **Gyan** » 26 Aug 2019 18:03

My Estimated Cost of LCA MK1 Components

Power Pack ie Engine, Gear Box, fuel injection system = USD 5 Million
Radar, Jammer, IFF, DRFM, MAAWS , Chaff Dispensers= USD 5 Million
Actuators and FBW System = USD 2 Million
Fuel System = USD 1 Million
Cockpit Equipment, HMCS, HOTAS, HUD = USD 2 Million
Ejection seat, Gun & ammo feed system= USD 1 Million
Landing Gear, wheels = USD 1 Million
INS/RL, Comms = USD 1 Million
Airframe, other LRUs = ??
Labor, Assembly Infrastructure like Jigs?
Testing ?
Profit Margin 20%

Extras
Pylons, fuel tanks
Ground Support system
Hangers
Repair & maintenance Infrastructure

kit · Post by **kit** » 26 Aug 2019 23:00

fanne wrote:During Kargil war, we were short of artillery rounds. Govt had appealed to no one in general for hope (we were importing $1000/round from South Africa). The kalyani group top official 'barged' into govt office and provided 1 lakh rounds in short time). Contrast this with another very famous company at that time, developed body Armour for army but was costly. Govt wanted order in lakhs (million?), the company refused to lower prices. Only after 20 years now, army is getting Armour (btw that company is in contention of artillery guns as well).

If you read the above piece and go to kindergarden and ask who should win India's order of artillery, they will be able to tell you who. But ask MOD and its babus, they will rather sanction that company even from testing their gun. I do not think it is because we have incompetent people, it is something else and it should be accounted for

which company? There is nothing wrong in stating a fact

ashishvikas · Post by **ashishvikas** » 27 Aug 2019 00:03

Indian jet Tejas wins version called SPORT for advanced training

https://www.aereo.jor.br/2019/08/25/jat ... -avancado/

Brazil calling..LCA Tejas

https://twitter.com/hvtiaf/status/11660 ... 08576?s=19

Rakesh · Post by **Rakesh** » 27 Aug 2019 00:35

http://itools.com/tool/google-translate ... translator

Copy the url from Ashish's post above and paste in the link above to read in English.

Translate from Portuguese to English, although the website above will auto detect the language.

ramana · Post by **ramana** » 27 Aug 2019 02:49

fanne wrote:....

It is not hard to guess it is gun by Bharat Forge/Kalyani group!! I am very glad that army had agreed (my initial foolish suspicion was it was Army delaying it as the gun would have passed with flying color and Army had to drop imports of similar gun), but MOD had dropped the ball. If you look at the bigger picture, it is MOD dropping the ball. If I may add, MOD babus will be what they are, in the end it is a political decision to be made and a bold politician is needed to make the call (one who is incorruptible, but most important, have the ability to see through any bad/wrong decisions by ministry).

The above is a perfect case - While there are many players in artillery (I will list them, with whatever knowledge from public sources I have)

1. OFB/DRDO (Bofors tech already provided around 1986-87, full tech) - They sat on an already paid, fully provided Tech for this gun for almost 35 years to start using this tech to build a gun. This when for these 35 guns were the best guns we had and we cannot have had enough of them. Talk about initiative, yes that includes all various constraints as MOD sanction, budget, politics etc. You have to look at the whole ecosystem as a whole, no matter how much we wish, it will be one whole also in the future with all its greatness and shortcomings. The ATAGS is a step up (new design) being done after a budget and approval and a right outcome from this kind of ecosystem, when it works best

2.L&T - Vajra - Nothing but very efficient screwdrivergiri by a very efficient private company. They are just assembling a South Korean kit and making them ahead of schedule. If they get x guns, they cannot make the x+1 gun by their own, unless they put quite decent amount of money and time. If the foreign partner pulls out, they cannot make anything, let only support the system. The R&D and knowledge base increase is nothing to write home about.

3.TATA SED gun is similarly a foreign system assembled, perhaps painted in India. If the foreign partner pulls out, they cannot make anything, let only support the system. The R&D and knowledge base increase is nothing to write home about.

4. Bharat Forge - They bought a whole factory from one of the best foreign source that made artillery gun (on their own dime, almost a decade ago before they had even an opportunity to sell a gun), dismantled it piece by piece and resurrected that factory in India. They own the IP and the gun (and no surprise, on their own they can provide many variations of the gun, different caliber, light weight etc.). That is called hunger. They can make the x+1 gun even if all the foreign supplier stop supplying to India. They can also make the next step up gun when and if needed.

During Kargil war, we were short of artillery rounds. Govt had appealed to no one in general for hope (we were importing $1000/round from South Africa). The Kalyani group top official 'barged' into govt office and provided 1 lakh rounds in short time). Contrast this with another very famous company at that time, developed body Armour for army but was costly. Govt wanted order in lakhs (million?), the company refused to lower prices. Only after 20 years now, army is getting Armour (btw that company is in contention of artillery guns as well).

If you read the above piece and go to kindergarden and ask who should win India's order of artillery, they will be able to tell you who. But ask MOD and its babus, they will rather sanction that company even from testing their gun. I do not think it is because we have incompetent people, it is something else and it should be accounted for

Power to say no is with everyone in the DPP chain and the power to say yes is with the Minister.
So along the way many hurdles are put up for various reasons: rice bowl, corruption, just to show the power of the pen holder, financial, lack of hostilities. Peace time there is never any procurement unlike wartime.

I think a few 25 to 30 cases should be looked at since Kargil War and see the typical forces request and the MoD rejections to see the pattern if any.

A good project for the MoD Reform thread.

ramana · Post by **ramana** » 27 Aug 2019 03:17

ashishvikas wrote:83 LCAs Order: HAL may finally agree to lower price

http://m.timesofindia.com/articleshow/7 ... aign=cppst

According to sources privy to the negotiations, HAL quoted Rs 450 crore per aircraft as the basic price. “MoD and IAF (customers) are firm that this price is not competitive and are negotiating for a price that is less than Rs 300 crore per aircraft. Negotiations are nearly complete and final price is likely to be in the range of Rs 250 crore and Rs 275 crore,” a source said.

If the price is Rs 275 crore, then the value of 83 LCAs would be about Rs 22,825 crore compared to Rs 37,350 crore if it was Rs 450 crore.

This article has so much bullshit and sources mulling over orders over idli-sambar and coffee in MTR.
They talk like the first price 450/plane was real and the imaginary profit also real.
And as if they care for well being of HAL and workers and hence they reduced the inflated price to more reasonable 60%!!!
The fact they cut the price by 40% shows they had no clue what it should be.

Its not OFB but HAL needs a good re-organization.
And by Virabhadra they will get it.

srai · Post by **srai** » 27 Aug 2019 03:29

^^^
Someone needs to get the breakdown of the deal as to what was included/excluded. If we look at Rafale purchase, around 50-60% of the costs were for things like PBL, weapons, infrastructure, training and customization. These costs are either paid for as part of the original contract, or under series of separate contracts, or in piecemeal fashion once inducted.

JayS · Post by **JayS** » 27 Aug 2019 17:21

srai wrote:^^^
Someone needs to get the breakdown of the deal as to what was included/excluded. If we look at Rafale purchase, around 50-60% of the costs were for things like PBL, weapons, infrastructure, training and customization. These costs are either paid for as part of the original contract, or under series of separate contracts, or in piecemeal fashion once inducted.

The specifics of the package are not there is public domain as of now. Not even "leaked" info.

Kartik · Post by **Kartik** » 01 Sep 2019 12:27

Apparently there is a tender out for pylon mounted MAWS sensors for the Tejas Mk1A. Read this on another forum.

Cybaru · Post by **Cybaru** » 01 Sep 2019 13:03

Kartik wrote:Apparently there is a tender out for pylon mounted MAWS sensors for the Tejas Mk1A. Read this on another forum.

Front and Rear? what does it look like?

sankum · Post by **sankum** » 01 Sep 2019 15:49

An example
https://www.terma.com/media/105019/4868 ... screen.pdf

srai · Post by **srai** » 01 Sep 2019 16:35

Cybaru wrote:
Kartik wrote:Apparently there is a tender out for pylon mounted MAWS sensors for the Tejas Mk1A. Read this on another forum.
Front and Rear? what does it look like?

DARE version maybe?

srin · Post by **srin** » 02 Sep 2019 13:17

ramana wrote:
ashishvikas wrote:83 LCAs Order: HAL may finally agree to lower price

http://m.timesofindia.com/articleshow/7 ... aign=cppst

According to sources privy to the negotiations, HAL quoted Rs 450 crore per aircraft as the basic price. “MoD and IAF (customers) are firm that this price is not competitive and are negotiating for a price that is less than Rs 300 crore per aircraft. Negotiations are nearly complete and final price is likely to be in the range of Rs 250 crore and Rs 275 crore,” a source said.

If the price is Rs 275 crore, then the value of 83 LCAs would be about Rs 22,825 crore compared to Rs 37,350 crore if it was Rs 450 crore.
This article has so much bullshit and sources mulling over orders over idli-sambar and coffee in MTR.
They talk like the first price 450/plane was real and the imaginary profit also real.
And as if they care for well being of HAL and workers and hence they reduced the inflated price to more reasonable 60%!!!
The fact they cut the price by 40% shows they had no clue what it should be.

Its not OFB but HAL needs a good re-organization.
And by Virabhadra they will get it.

That's not the worst part. This is:

One source claimed: “The Gripen, which has features similar to LCA, was costing less than Rs 300 crore per plane and that HAL must become competitive and be able to offer similar price".

“Why would anybody pay Rs 450 crore for Tejas if they can buy Gripens for cheaper,” the source argued, ...

If the only justification for Tejas is cost and not our strategic autonomy, I'm really disappointed. I hope that this so-called "source" is really some strategic think tank idiot, and not someone in the MoD or the forces.

srai · Post by **srai** » 02 Sep 2019 14:16

^^^
All these cost comparisons are for nothing if we don’t know the details of what is included/ excluded. Going by Rafael deal, 50%-60% of the costs are non-airframe related. But to prove a point from unnamed “sources”, you could selectively pick and chose your numbers to make something look good or bad.

Avtar Singh · Post by **Avtar Singh** » 02 Sep 2019 15:25

Did not know where to put this, but this is a good place as any to make my point.

For all the self loathers out there who decry Indian stuff and achievements whilst continuously salivating over “gora” stuff

Please check out this video YF 16 HAPLESS FIRST FLIGHT.

https://www.youtube.com/watch?v=qAp4RtGKbHE

Is this video not by those who said Indian FBW would ba a disaster?

Also, as a reminder, checkout the number of Gripen that crashed before these great westerners (cf SDRE, all under punitive sanctions) got it right.

Best aeroplanes are made by; British/French and Russians the only people that can produce greater stuff are “Injuns”……
For it is a science and art combined with good measure of “jugaaad”!

Please just get on with it!!! Twin engine MWF own jet engine etc….
Ditch the technology begging bowls and empower Indian scientists and engineers to get on with it.
Put the blocking baboons into the mincer.

Vivek K · Post by **Vivek K** » 02 Sep 2019 20:23

^^^^^^^^+10000!!! May your tribe increase.

ArjunPandit · Post by **ArjunPandit** » 02 Sep 2019 20:36

I know I am getting OT, but want to highlight that the SDREs realized their true worth only after 2000s when many travelled world and saw that the avg firang is no better than him. They can speak well, but when it comes down to doing in majority of cases the wind excretions from front is same as back. This confidence is percolating down and will be visible in the face after 10 years..we're seeing the old order of SDREs bad TFTA good being gradually unravelling in front of us....

RKumar · Post by **RKumar** » 02 Sep 2019 21:22

Any update on Tejas MK1 - FOC deliveries? Everything is tooo quite.

I guess IAF & MoD are waiting for FOC deliveries before Tejas Mk1a contract is signed

so that HAL can have few years of chai-biscuit

Cain Marko · Post by **Cain Marko** » 03 Sep 2019 04:17

Avtar Singh wrote: Please just get on with it!!! Twin engine MWF own jet engine etc….
Ditch the technology begging bowls and empower Indian scientists and engineers to get on with it..

THIS.

nash · Post by **nash** » 05 Sep 2019 11:29

https://www.timesnownews.com/india/arti ... ore/482896

A mega-deal for the purchase of Akash surface to air missiles and 83 light combat aircraft has been cleared by the Union Cabinet.

Amount is not mention for 83 LCA.

Khalsa · Post by **Khalsa** » 05 Sep 2019 14:52

https://www.timesnownews.com/india/arti ... ore/482896
A mega-deal for the purchase of Akash surface to air missiles and 83 light combat aircraft has been cleared by the Union Cabinet.

[/quote]

I am sick of this nonsense.
Cabinet Clears money for 100 Arjun Mk 2 Tanks
Cabinet Clears money for 83 Mk1A

tell me when the money is deposited because the other party has cut the first sheet of Al or Fe.

Bharadwaj · Post by **Bharadwaj** » 05 Sep 2019 15:14

http://www.thehindu.com/news/national/l ... 340242.ece

“Pricing, 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 83 LCA contract in the next 3-4 months,” he said at a seminar on Indian aerospace industry, jointly organised by the Centre for Air Power Studies and Society of Indian Defence Manufacturers.

There appears to be light at the end of the tunnel.

srai · Post by **srai** » 05 Sep 2019 17:23

^^^
Now they are going to discuss “support package”

Bharadwaj · Post by **Bharadwaj** » 05 Sep 2019 17:29

The impression one gets is that there is a commitment to the Tejas at the highest levels so let us wait a few more months and not get into glass half empty mode. They have agreed on base price which is the most critical aspect.

srai · Post by **srai** » 05 Sep 2019 17:45

Don’t be surprised when the “support package” addition brings the final acquisition closer to the original quoted price

ArjunPandit · Post by **ArjunPandit** » 05 Sep 2019 17:51

may be this is a very naaive question..but why do we need to even haggle for the price...all said and done money remains with GOI..assuming that the suppliers are not over charging HAL..