Myth and reality in the cost of Tejas, the IAF and
Navy s under-development fighter.
The spotlight is swinging on to the Tejas Light
Combat Aircraft (LCA). It has been cleared for
induction into the Indian Air Force, construction has
begun on two squadrons (40 aircraft) and the IAF is
picking 40 per cent of the tab for developing a
more powerful Tejas Mark II. Now its designers
are hitting out at critics who charge the
programme has greatly overshot its budget.
P S Subramanyam, head of the Aeronautical
Development Agency (ADA), which spearheads
the Tejas programme, has given Business Standard
detailed financial figures to argue the development
cost has remained within budget. ADA also notes
the Tejas is significantly cheaper than any
comparable fighter.
No overshoot
Slamming some recent media reports that the Tejas
was enormously over budget, Subramanyam
reveals just Rs 6,051 crore has been spent so far on
the fighter, that performed aerobatics at the Aero
India show in Bangalore this month. Another Rs
746 crore (of the sanctioned Rs 3,650 crore) has
been spent on the naval Tejas, which will fly from
the Indian Navy s future aircraft carriers.
ADA has provided a detailed cost breakdown. The
LCA project began in 1983 (the name Tejas only
came later), with a preliminary allocation of Rs 560
crore for feasibility studies and project definition.
Subramanyam complains that accusations of cost
overruns stem from the misperception that Rs 560
crore was the entire budget for developing the
Tejas. In fact, this was merely for defining the
project and creating the infrastructure needed for
designing, building, testing and certifying a fighter.
Only after a decade of infrastructure building did
the design work start, when the ministry of
defence (MoD) sanctioned Rs 2,188 crore in 1993
(which included the initial Rs 560 crore). This
allocation was to fund the building of two
technology demonstrator Tejas fighters.
Within this budget, we flew the Tejas in 2001, and
even built two extra Tejas prototypes, says
Subramanyam. And, that was without any
adjustment for inflation or foreign exchange
appreciation, though the dollar shot up from Rs 26
to Rs 47 during that period. Our forex component
of Rs 873 crore should have been adjusted to Rs
1,642 crore.
Buoyed by the successful test flight in 2001, the
MoD allocated ADA Rs 3,302 crore in November
2001, for Phase-II of the programme. This was to
fund a production line and the building and flight-
testing of 8 limited series production fighters.
Phase-II will run till 2012, when the Tejas obtains
final operational clearance (FOC) for induction into
the IAF as a frontline fighter.
In 2009, with the Tejas flight-testing running slow,
ADA obtained an additional Rs 2,475 crore from the
government for Phase-II. Subramanyam argues
this is not a cost overrun. The MoDs allocation of
2001 contained no protection from inflation. If you
roll back our annual expenditure to the base year of
2001, we remained within budget, says the ADA
chief.
The IAF is now confident that its Tejas Mk-I will
obtain FOC in 2012, within the sanctioned Rs 7,965
crore (Rs 2,188 + Rs 3,302 + Rs 2,475) crore. What
remains is to integrate a long-range missile; to
enable mid-air refuelling; and to enable the Tejas to
fly as slow as 200 kmph.
What we got
Subramanyam argues that this money has not just
developed the Tejas, but also India s ability to build
serious fighters. Consider the aerospace
infrastructure that we have built across the
country, in key DRDO laboratories, defence PSUs,
private industry, academic institutions, and test
facilities like the National Flight Testing Centre
(NFTC). This has bridged a technology and
infrastructure gap of two-three generations, he
says.
WHAT THE MoD WILL PAY
Development Date of
sanction
Sanctioned
cost Spent till
Jan 25, 11
1. Air Force
(a) Phase-1 (Tejas prototype) Jun 23, 93 2,188* 2,188
(b) Phase-2 (Tejas Mark I) Nov 20,
01 5,777** 3,859
Sub-total (a & b) 7,965 6,047
(c)Phase-3 (Tejas Mark II) Nov 20,
09 2,432 4
Sub-total (a, b & c) 10,397 6,051
2. Navy
(a) Pre-project design Jan 20, 99 14 14
(b) Phase-1 (Tejas Mark I) Mar 28, 03 1,715*** 732
Sub-total (a & b) 1,729 746
(c) Phase-2 (Tejas Mark 2) Dec 17, 09 1,921 Nil
Total (a, b & c) 3,650 746
Grand Total (1 & 2) 14,047 6,797
* Includes Rs 560 crore sanctioned on Aug 22, 1983
** Rs 3,302 crore + Rs 2,475 crore on Jan 20, 2001,
and Nov 20, 2009, respectively
*** Rs 949 crore + Rs 766 crore on Mar 28, 2003,
and Dec 17, 2009, respectively
Figures in Rs crore
Meanwhile, the naval Tejas will fly within weeks.
Significantly different from the IAF version, the
naval Tejas must get airborne within 195 metres
(the length of an aircraft carrier deck) and
withstand the cruel impact of repeated deck
landings, in which it must be slammed down
precisely where the deck begins. Of the Rs 1,729
crore allocated for the naval Tejas, ADA has spent
Rs 746 crore so far.
Encouraged by the success of Tejas Mk-I, the MoD
allocated Rs 2,432 crore in 2009 for making the
IAF s fighter even better: developing a Tejas Mk-
II, with a newer, beefier, GE-414 engine.
Simultaneously, Rs 1,921 crore was sanctioned for
the Naval Tejas Mk-II. While the Navy funded 40
per cent of its fighter from the start, the IAF is a
new convert, matching the Navy in funding the
Tejas Mk-II.
By 2012, the total development cost for an IAF
and a naval Tejas including a single-seat fighter
and a twin-seat trainer variant for each will be
Rs 9,690 crore. Another Rs 4,353 crore will be
spent on the Tejas Mark-II, bringing the total cost
to Rs 14,047 crore, says Subramanyam.
The Gripen, a comparable if somewhat more
advanced fighter, which Sweden developed during
this period, cost US $13.5 billion for 204 fighters,
assuming complete tax exemption. A similar
number of Tejas fighters entering IAF and Navy
service would provided that HAL holds the
Tejas manufacturing price at its current estimate of
Rs 180 crore per fighter have cost India US
$11.28 billion.
Given that Sweden entered the Gripen programme
with a mature aerospace industry (coming off the
successful Viggen programme), India will have built
the Tejas, as also an entire aerospace design and
manufacturing eco-system, for 17 per cent less
money than Sweden paid for the Gripen.