NEW DELHI --- The price of Kamov light-utility choppers to be built in India is coming out to be almost 2.5 times the cost of the 60 such helicopters that would be built in Russia and supplied to the Indian Army and Air Force for operations in high altitude areas such as Siachen and Ladakh.
The issue over price and transfer of technology are slowing the deal which the armed forces require urgently to be completed to replace their vintage fleet of Cheetah and Chetak choppers for critical operations.
Under an Indo-Russian governmental agreement, India is buying 200 Kamov 226 T helicopters of which 60 would be built in Russia and supplied directly to the forces while the remaining 140 would be manufactured in a joint venture between Kamov and HAL along with a private sector partner.
"During negotiations with the Russian side, it has come out that the cost of the 140 choppers to be built in India would be around 2.5 times the cost of the first 60 helicopters. There are certain issues over this in the acquisition wing," Defence sources told Mail Today.
The progress of the deal may come up for discussion during the meeting between Prime Minister Narendra Modi in his meeting with Russian President Vladimir Putin in Moscow planned early next month.
However, senior ministry officials said Make in India comes at a heavy cost as investments have to be made to create a new facility and manpower has to be trained along with acquisition of land for the new set up.
The government had selected HAL as a partner but later on it also thought of including a private sector partner for the joint venture company to promote private participation in defence but this is going to add further cost to the programme, the sources said.
H.A.L YET TO TAKE FINAL CALL
The decision on selecting the private sector partner has to be taken by Hindustan Aeronautics Limited (HAL) and the company is yet to take a final call on the issue.
The deal is also getting affected by the issue over the weight of the choppers, as it is believed that the ones built in Russia weigh more than what was specified in the tender requirements by the force.
"The issue has been raised with the Russians and it is expected that some solutions would be found for reducing the weight soon," a source said.
Sources said there seemed to be a minor issue over the interpretation of the clauses on the transfer of technology for the Kamov choppers, as during one of the meetings the Russians proposed to supply the 140 choppers to be built in India as complete knocked-down and semi-knocked down kits -which would mean that the choppers would only be assembled and not built in India.
TRANSFER OF TECHNOLOGY
"We are very clear that we want transfer of technology for these choppers so that they can be built in future by our firms on their own in the future," a defence official said.
Price has been a critical issue in defence deals involving Russia as several deals such as the under-development Fifth Generation Fighter Aircraft and Multirole Transport Aircraft projects have been stuck because of the sudden and exorbitant cost hikes by Moscow.
The biggest example of India suffering due to price hike was the INS Vikramaditya aircraft carrier project, which was to cost $900 million (over Rs 5,000 crore) at the time of signing in 2004, but was delivered in 2014 after an additional cost of $1.2 billion (over Rs 7,000 crore) in 2014.