SOURCE: TUSHKAR SHIRODKAR / FOR MY TAKE / IDRW.ORG.
Union Cabinet under the chairmanship of Prime Minister Narendra Modi has sanctioned the procurement of 83 fighters on Wednesday for Rs. 45,696 Crore along with Design and Development of Infrastructure sanctions worth Rs.1,202 Crore. The deal for 73 LCA Tejas Mk-1A fighter aircraft and 10 LCA Tejas Mk-1 Trainer aircraft could mean that each aircraft cost could be around Rs 550 crore ($75 million) Per unit that is way above what was speculated previously.
HAL originally had asked for a little over Rs 599 crore ($81 million) that could have meant a 12% Profit Margin for the company per unit when the initial quotation for the jets came in early 2019. In 2020, Indian media had reported that the price for the deal has come down to Rs 37,000 crore that could have meant that each unit cost could have been only Rs 455 crore ($61 million), but these figures were never confirmed by HAL, but when the deal pegged at 45,696 Crore was approved it did raise few eyebrows in many circles in India.
HAL has still not revealed what additional cost that has been factored in the deal approved by the government that might include cost for additional spares, logistics support, and other components. IAF wanted 3 Full-Scale simulators too in previous negotiations so it is still not clear if that too is included. idrw.org a few days back had reported that HAL and GE will soon conclude a deal for 100+ F-404 engines to power 83 jets that could mean 17+ Spare engines to be procured at $6-7 million unit cost.
What can be confirmed is that the deal approved will not cover the weapons package that the aircraft will be equipped with so that could come at an additional cost. Now let’s see how it fare with aircraft with similar capabilities and features.
The only aircraft that is still under production in India is the Russian Sukhoi-30MKI that HAL bills to IAF at around Rs 430 crore ($62 million) per unit cost but before we outrage we have to look into lot of other factors, like the technology in the aircraft was selected over 20 years ago and majority of the components have remained same in last two decades which is really becoming now technologically inferior. Tejas Mk1A being a smaller but much more advanced jet in terms of avionics and systems it can’t be directly compared to Sukhoi-30MKI that has a higher per hour cost of flying and requires several hours of more manhour to keep them running.
The recent deal with Taiwan for the F-16V configuration fighter jet puts the per-unit cost of the jet at $121.8 million per unit. Not exactly cheap and same if manufactured locally in India could come at 10-20% per unit cost more due to high man hour in India. F-16V is what India has been offered by the United States for India’s requirement for 114 jets. F/A-18E jets are estimated to be in range of $140 million per unit range.
While it is very difficult to get a Ballpark Figure for the JF-17 Block-II that is procured by Pakistan. PAF had procured JF-17 Block-I at $19-20 million per unit cost in 2009 it was initially estimated that Block-II price will be around $25-30 million per unit but Nigeria had procured same JF-17 Block-II in a deal for $184.3 million, that to for only 3 units, which could have meant its cost is around $60 million per unit, not as cheap as Pakistani could like to believe even if includes a deal for some spares. Since Block-II is not AESA Radar equipped nor comes with other technologies to be seen in Tejas Mk1A. it could be fair to compare it with JF-17 Block-III, but the prices of that are yet to be out, but a rough estimate could put it anywhere between $65-70 million per unit.
Gripen-C/D, when it was under production, was priced around $60-63 million per unit but since the production has shifted to the much more advanced Gripen-E that costs $81 million per unit it will be very difficult to arrive at the 2020 figure after including factors like inflation and currency exchange. Gripen-C/D was also not equipped with advanced features like an AESA Radar that only comes in Gripen-E.
IAF has procured Tejas Mk1 at Rs 363 crore ($49 million) per unit, it could be fair for the upgraded Tejas Mk1A coming at $75 million per unit, since more of the money will remain locally in India. Tejas Mk1A will have 60% indigenous components that’s 75.5 per cent by numbers.
Note: Above Unit cost mentioned are rough Estimates and only includes Flyaway unit costs and not that of Weapons package and additional spares, training and infrastructure costs.
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Article by TUSHKAR SHIRODKAR , cannot be republished Partially or Full without consent from Writer or idrw.org