No final deal has been signed, just a LoU to negotiate in 2016.
Anyways, I don't think a new rifle program would cost $3 billion.
Rather, there are two components to this acquisition: (1) the cost of having a turnkey manufacturing facility for the rifle (which can independently produce it without any input whatsoever from the OEM) and (2) the cost of that specific POF variant.
By virtue of Pakistan's cheaper currency, labour and material costs, the POF variant of the rifle will cost much less than the OEM import.
But the resulting overhead from the cost of buying the turnkey facility (in which the OEM could also include licensing fees for the first X-number of rifles) will add to POF's overhead, thereby raising the unit cost of each POF rifle.
So your equation might look something like this:
$250 m for a turnkey facility + $150 m in licensing fee = $400 m overhead
Direct labour + material costs of POF copy = $1,000.
$1,000 x 1,000,000 = $1 billion + $400 m overhead.
Therefore: $1.4 bn divided by 1,000,000 = $1,400 USD per rifle.
You can lower the total unit cost by securing export orders, which is what's referred to as economies-of-scale. Let's say you sell 100,000 rifles abroad, the unit cost becomes $1,363, maybe less if POF charges more for export than what it does domestically.
Finally, the program cost isn't necessarily absorbed within 1-2 years. Rather, the transition to a new rifle could take 10-15 years, perhaps with new soldiers starting out with new guns while older ones keep using what they have till discharge or retirement. So the $1.4 bn can be spread into ten $90-140 m payments annually.
