A defence deal expected to cost over Rs 2,000 crore to buy 20 Hawk Advanced Jet Trainer planes is likely to be called off by the Air Force as the negotiations for it have been stuck for almost three years now over steep price hike by the vendors.
The Air Force is also not interested in the upgrade of its fleet of over 120 Hawk planes that were inducted into service after a deal with Britain in 2004. The HAL is offering to upgrade the Hawk fleet of the Air Force to Hawk India jets by adding combat capabilities, government sources told Mail Today.
"The benchmark price of each aircraft was around Rs 90 crore but the initial price offered by the vendors including the public sector Hindustan Aeronautics Limited (HAL) was more than double," the sources said.
"In the contract negotiations, the vendors have cut down the price but even now, the price offered is more than 60 per cent of what the defence ministry is willing to pay for the planes," they said.
Another reason over which the deal may be called off is that due to government's directive for utilising the funds optimally, the priority of the ministry is to buy more of war fighting equipment rather than go in for systems that do not fit that bill, the sources said.
On the newly-developed Hawk India jet showcased by HAL recently, sources said there was not much logic in going in for upgrade of IAF fleet of Hawk planes which have been inducted not long back. "The last of the Hawks were inducted only around three years ago in the force and the upgrades are not required at this moment," the sources said.
The IAF had moved the proposal to buy these 20 planes from a British firm during the UPA regime as it wanted to replace the Kiran Mk 2 planes with the Hawk Advanced Jet Training jets to be equipped with smoking pots to fly with the Surya Kiran Aerobatic Team (SKAT).
The contract for the last batch of 57 planes was done between India and the British firm in 2010 to help in the training programmes of the Air Force and the Navy to add to the existing fleet of 66 planes bought in 2004.
The deal for the 20 airplanes has gone through many problems earlier also as the file related to the procurement case had mysteriously gone missing from a department under the defence ministry in 2014 leading to a delay of more than a year in completing the lapsed process.