Russia does it again: Ten-fold rise in defence equipment prices

[Awesome]

Actually Indians should have chosen quicker on the MMRCA, sab ko latka ke rakha took favors out of everyone, now they won't forget being used.

 

[SamantK]

Actually Indians should have chosen quicker on the MMRCA, sab ko latka ke rakha took favors out of everyone, now they won't forget being used.

The actuall MMRCA was done quite quickly.. in 2007 the tenders were announced, Jan 2012 the results were declared.. I dont know how you say it was delayed.. (IF you are talking about MRCA which was cancelled it is a different topic altogether).

Also, there were six contenders, it is not easy to evaluate them in a very very short time..

 

[ptldM3]

If anyone beleives that the price of equipment is to rise ten fold i can only say you are an idiot, as is the reporter that made this story. The rise of prices is normal due to inflation, but ten fold is pretty silly.

Obviously Sukhoi prices has been hiked, you can't expect 1997 price of $40 million a piece in 2012, now prices has well increased beyond $100 million.

Exactly correct, prices will go up over time. Even if the SU-30 is 100 mill, you get alot of aircraft for the money, not to mention it is costlier to produce large heavy fighters such as sukhois.

 

[Dash]

FFS!! Well thank God India is moving at a fast rate of knots away from Russia as an arms supplier. Equipment India bought from Russia a decade ago it is now getting from elsewhere or from home. Apart from the "big-ticket" projects like PAK-FA/FGFA, MKI and MRTA there are very few ongoing defence procurement from Russia by India for the foreseeable future- Russia has played this trick too often and India is wise to it. No "biggie" tbh- MMRCA, LOH/LUH, Heavy-lift helo, Heavy-attack helo, AAR, very heavy lift air-lifter etc have all not gone /will not go to Russia and THANK GOD!! We can see that India is trying to get as far away from Russia as possible in many procurements ie IAF have said any future PHALCON AWACS ordered they would prefer weren't A-50s and I say GREAT!!

Tells me that we are going to go through tough times, Im worried about FGFA now...

 

[faithfulguy]

India should buy more from the US, which does not jack up the prices and deliver ahead of schedule.

 

[Kyusuibu Honbu]

India should buy more from the US, which does not jack up the prices and deliver ahead of schedule.

Let USA offer ToT as well then

 

[agamdilawari]

A silly and false news being blown out of proportion...I love PDF for that

 

[Tshering22]

What's the bet that 80% our politicians are to benefit from this hike?

 

[Archie]

Does this new relate to the recent 1 Billion USD Ammunition deal with Russia

http://www.defence.pk/forums/indian...liver-ammunition-worth-1-billion-india-2.html

Top sources say contracts for 25,000 Invar missiles and 66,000 APFSDS (armour-piercing fin-stabilized discarding sabot) rounds for the Russian-origin T-90S fleet as well as 10,000 Konkurs-M anti-tank guided missiles (ATGMs), at an overall cost of around Rs 6,000 crore, are in the final stages.

There are two big contracts for the 3UBK-Invar missiles, which are potent anti-tank weapons with a five-km strike range, in the pipeline. The first is for 10,000 missiles for Rs 1,386 crore from Russia for which a ``draft'' CCS (cabinet committee on security) note has already been prepared and circulated, say sources.

The rest 15,000 missiles will be ordered from defence PSU Bharat Dynamics Ltd, at a cost of over Rs 2,000 crore, for which the contract negotiations committee (CNC) is in progress.

Another over Rs 2,000 crore contract will be for the 66,000 APFSDS rounds fired from the 125mm smooth-bore guns of T-90S tanks. The reserve stocks for this specialized ammunition is down to only four days, as Army vice-chief Lt-Gen S K Singh told the parliamentary standing committee on defence on Monday.

The Army is also going to get the 10,000 Konkurs-M ATGMs directly from Russia for over Rs 1,200 crore. ``All these contracts should be inked within the next few months,'' said a source

Source: http://www.defence.pk/forums/indian...on-worth-1-billion-india-2.html#ixzz208i5Kl9h

By the way , it would be an idiot who would actually believe that 10000 Konkur M ATGM would cost just Rs 130 Crore

Do you know that our present inventory of Milan 2T/3T ATGM is 30000 Unit and this was the most recent induction of ATGM , with last batch of 8000 units being ordered in yr 2008 @ 1000 crore and delivered by Bharat Dynamics

 

[+4vsgorillas-Apebane]

This is the problem of relying of foreign arms suppliers. Once they have sold to you they have you by the balls! Spares and ammo cost exorbitant sums of money while repairs and overhauls must be done by the vendor in their facilities at enormous cost and time.
People in this forum throw the 'billions' figure around without really comprehending the vastness of the sum. buying arms is not money well spent and buying foreign arms is even worse.

 

[Rajaraja Chola]

Well still after increasing, they are lower than many ammunitions rate in the world...
However i dont trust the source... They wont increase such, not for India

 

[arp2041]

another source for the news (a sunday guardian report) :

Russia hikes price of defence supplies by ten times

Russia has increased the price of its equipment that it wants to sell to the Indian Army by at least ten times, according to prices quoted in its bids. Russian defence equipment manufacturing companies have sent their bids to the Indian Ministry of Defence (MoD), which recently opened these bids and discovered the startling escalation in prices.

MoD compared the Russian price to its anticipated price which it had calculated before floating these tenders to the Russian companies. For 10,000 rocket launchers, to be fired from artillery guns, as against MoD anticipated estimated price of Rs 130 cr, Russia has asked for Rs 4,000 cr. Similarly, ammunition rounds for T-90 tanks, estimated by Delhi at Rs 980 cr, were offered at an opening price of Rs 4,000 cr by the Russian Rosoboronexport for Mk-339 for 60,000 rounds, a four times increase in price seen here. This ammunition is for the T-90s already being used by the Indian Army.

Workshop equipment from Russia is being offered at Rs 1,800 cr, which is approximately seven times more than the anticipated MoD price of Rs 250 cr. This workshop equipment is for maintenance and repair of tanks, to be done in India.

The Russian company, Grad has offered the rocket launchers at similar high rates.

Equipment to be bought for the defence services is handled by the Acquisition department of the ministry, which first puts across an anticipated price before the Defence Acquisition Council (DAC) for approval. The approval of DAC, which is headed by the Defence Minister, is required for deals above Rs 100 cr.

The MoD-Acquisition wing calculates a rough price for any equipment to be bought, before floating the tender, and gets it approved by the DAC. This price is calculated, after market research, with inflation factored in it, and other aspects like wholesale price index and consumer price index, based on research. There is a margin for slight increase in the price in future. After this process the bids are floated. After trials and other procedures, price bids are opened and matched with what DAC had approved. The price offered by vendors could be a little higher than what DAC had approved, as there is a chance of inflation being cited. The lowest bidder is chosen finally. For equipment for the army, it is the Joint Secretary-Land Systems, who deals with purchases.

After the price bids open, the commercial negotiations committee (CNC) carries out negotiations with the vendor, which in this case is on at the moment, headed by the JS-Land Systems along with the Russian Rosoboronexport, for all three contracts.

A source told this newspaper, "Never has so much difference been seen in price, even due to inflation, but Russia has had a record of over-pricing their equipment. Companies are aware that the buyer country has done some estimation of the price, but they may not know the actual price the buyer country has in mind."

While more T-90s are in the pipeline, to be built in India under licence, there is talk for upgradation of the existing fleet as well.

This does not come as a surprise as Russia has had a past record of price escalation in defence equipment with respect to India. It may be noted that the aircraft carrier, Admiral Gorshkov, rechristened as INS Vikramaditya for the Indian Navy, currently being refitted in Russia, was inked in 2004 at $974 million and was renegotiated in 2010 at $2.3 billion.

The Russian Sukhoi-30 fighter aircraft also saw an astronomical increase in price in three years, by a whopping 155%, in 2010.

Russia hikes price of defence supplies by ten times

so the news is indeed turning out to be true

 

[faithfulguy]

Let USA offer ToT as well then

There is no use for TOT when India do not do anything about it. And all other countries buy us weapons about TOT, not even Britain or Israel. So India is not going to get it. Just be grateful that US would sell you weapons.

 

[Screambowl]

If you are relying on foreign countries for some basic things like ammunition, this will not make you superpower even in 200 years. You have the iron, you have the brass you have tons of copper, lead, everything. And you want to sell them to the market in cheap price and buy some basic equipments in 10 fold prices made of the same raw material. This is a crap policy.

 

[ephone]

Well, india never learns. It is just being hooked by the russians.

Russia has increased the prices of the latest defence equipments, by ten times, to be procured by India. The Russian defence manufacturing companies have sent their bid- ten times the opening price of the tenders.

A leading newspaper daily, Sunday Guardian, carried a report which mentioned that Russian companies have increased the price of defence equipments like- rocket launchers, T-90 tanks, tanks ammunition to as high as ten-folds.

For the procurement of 10,000 rocket launchers ministry of defence has estimated an approximate price of rs 130 crores, Russia is asking rs 4,000 crores for the launchers.

Ammunition rounds of T-90 tanks, pegged at rs 980 crores, were offered at an opening price of rs 4,000 crores by Russia's Rosoboronexport.

In another example, workshop equipments were offered at an increased price of rs 1,800 crores against rs 250 crores anticipated by the ministry of defence.

The change in stance by the Russian companies is nothing new. Russia has a history of increasing the price of its defence equipments. The price of aircraft carrier Admiral Gorshkov was repeatedly revised.

The aircraft carrier christened as, INS Vikramaditya’s was sold to India at a staggering cost of USD 2.3 billion against an initial price tag USD 974 million.

India and Russia signed a multi-billion dollar deal in 2005 for the purchase of the Soviet-built Admiral Gorshkov carrier, but its delivery has already been delayed twice, pushing up the cost of refurbishing the carrier from $947 million to $2.3 billion.

The delivery of the Admiral Gorshkov to the Indian navy is expected in December 2012.

The warship is a modified Kiev-class carrier, originally named Baku. The ship was laid down in 1978 at the Nikolayev South shipyard in Ukraine, launched in 1982, and commissioned with the Soviet Navy in 1987.

It was renamed after the collapse of the Soviet Union in 1991. In 1994, following a boiler room explosion, the Admiral Gorshkov sat in dock for a year for repairs. In 1995, it briefly returned to service and in 1996 was finally withdrawn and put up for sale.

The ship has a displacement capacity of 45,000 tons. It has a maximum speed of 32 knots and an endurance of 13500 nautical miles (25,000 km) at a cruising speed of 18 knots.

Similarly, Russian Sukhoi-30 fighter aircraft also saw an astronomical increase in price in three years, by a whopping 155%, in 2010.

"Never has so much difference been seen in price, even due to inflation, but Russia has had a record of over-pricing their equipment. Companies are aware that the buyer country has done some estimation of the price, but they may not know the actual price the buyer country has in mind," said a source.

Russia does it again: Ten-fold rise in defence equipment prices - www.daily.bhaskar.com