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SOURCE: TUSHKAR SHIRODKAR / FOR MY TAKE / IDRW.ORG  

As per figures provided by Raksha Mantri Nirmala Sitharaman statement in Lok Sabha today, State-owned Hindustan Aeronautics Limited will be getting orders worth 49797 crores for development of 83 LCA-Tejas Mk-1A which roughly translates into Rs 599 crore ($86M) per unit which also includes 3 simulator and 300 cores infrastructure costs.

HAL recently had disclosed the cost of Tejas Mk-1A per unit at Rs.463 crore ($66M) per unit and this created confusion among many defense journalists and some doubts were also raised if the figure quoted by Raksha Mantri Nirmala Sitharaman was in fact right?.

49797 crores are full Tejas Mk.1A programme cost which includes the cost of development by the agency which is HAL and also manufacturing costs which will need to be incurred for the development of the Tejas Mk.1A by HAL. While IAF will pay Rs.463 crore ($66M) per unit of Tejas Mk-1A, development costs were not included in previously available public figures.

Rs.463 crore ($66M) doesn’t include weapons package which has to be procured through separate package but it includes all the on board equipment, avionics, engines and sub-system of a flyaway loaded aircraft, minus its weapons.

There was an uproar in the media circle when HAL had given a unit cost of Tejas Mk.1A at Rs.463 crore ($66M) which was more then what IAF pays for per unit cost of Sukhoi Su-30MKI which comes to 330 crores per unit. Defence Ministry had formed a committee which was looking into the pricing of Tejas Mk.1A programme but HAL later clarified that price will not come down due to modern avionics and technologies used in the aircraft which are not available on Sukhoi Su-30MKI which is based on technologies developed nearly 20 years ago.

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