Monday, July 21, 2008

Price war over Akash missile? (Updated)

This is something I've heard from three separate senior folks in the Indian Air Force, but haven't been able to get an official confirmation yet on it. Word has it that the IAF has conveyed its displeasure to the Defence Ministry and DRDO (creators of the Akash) over the price quoted by the five-firm consortium led by Bharat Dynamics Ltd (BDL) that will build Akash missiles for its first order. The IAF's initial order for a squadron of Akash systems is understood to be worth around Rs 1,975 crore.

The other companies that will carry out the contract are L&T, Tata Power, Bharat Electronics Ltd (BEL) and Walchandnagar Industries Ltd.

UPDATE: Just spoke to folks dealing with the Akash induction programme in the air force, and have got an unofficial stand on what the issue is. The IAF has signed on the dotted line for a squadron of Akash missiles, but it has represented to the MoD formally that in its present form, the Akash does not meet certain qualitative requirements set down (manoeuverability), nor have some capabilities been satisfactorily demonstrated by DRDO, including the engagement of low-level targets. It has therefore asked that the unit price of the missile system be brought down by a specified percentage to make up for the shortfall in desired capability.

However, DRDO has represented to the Ministry that the IAF's current order -- preferably for two squadrons of Akash -- go through without a hitch, so that IAF-specified refinements can be brought into follow-on orders of the system. The run-in has apparently turned quite nasty. I don't know why, but I have a bad feeling about all of this. Why does the IAF have absolutely no problems forking out unreasonably large wads of cash for Russian and Israeli systems? And why do treacherous mid-stream price hikes by the damn Israelis and Russians not raise a cheep from our armed forces? This is bad news, and shouldn't be a trend. Indigenous programmes being finished off just when they're complete is becoming a trend.

For all Akash features on LiveFist, click here. For LiveFist's exclusive photo-feature on the successful Akash missile tests of December 2007, click on the following:

EXCLUSIVE: Akash final trial photos
More Akash photos
Even more Akash photos
And, a final batch of Akash photos


Anonymous said...


Pritam said...

when russians want billions of $$$ for a ship, when israelis want huge money for Phalcon, SPYDER etc thats ok, but desi govt companies cannot because they are Indian, they dont need so much money!

Thats why we are Indians...

Anonymous said...

Beautifully orchestrated..

DRDO calls the tests a complete success, customers dont say a word then. Patriot system offered to India to undermine akash.

Few months later IAF comes with some technical and manning issues with Akash. Patriot is still pushed hard.

Now the price seems to be high, while being a fraction of the foreign system. In the near future, we will see akash being branded outdated and ditched in preference to imported Patriot. And we will call ourselves as "Patriot"ic!!

God save my nation..

sniperz11 said...

Shiv, how big is 1 sqn? 18 systems of the Spyder cost 1800 crores.

Anonymous said...

something like this was just waiting to happen. first the arjun, now akash. believe me, there is no hope for indigeneeous equipments in this country. -jp

gagan said...


Anonymous said...

Take my word, the Arjun saga will repeat itself over and over again. This sell out will not stop with Arjun, in fact it has just started. First Arjun, then Air Farce Akash, not to even mention the chai-biskoot Army Akash, then LCA then Kaveri all of them will go down the same drain.

Look at the big picture folks 30000 crores of systems to be imported take just 1 % of it and do the math. How many people are in the procurement dept of the services quite a handful, so the cut per person is huge.

Do you see now then how come 1950 crores worth a system can become more expensive than 10 times that amount we will spend on an imported system evaluating (read all expense paid foreign trips), tendering, re-evaluating, re-tendering, buying, training, fixing its bugs, and then evaluating its next generation system all in the name of operational emergency just because the 1950 crore system had a few fixable bugs ??

Who then gives a shit about 1950 crores then ? No baksheesh here folks, plain and simple.

Anonymous said...

Good story 1 in Express, had you been there.

Anonymous said...

if the technology is really that crappy, why not sell these things to outside customers and make some profits on the R&D money spent?? I am sure countries in Africa will be good market.

What do you think of a married fellow paying for daily food and **x to outsiders? Indian armed forces are no different. Instead of correcting issue, they find dirty fixes.

Anonymous said...

Please try to speak to different guys within armed forces. They might have different views. Such views might create opposite sensationalism. Don't these senior folks know about bulk purchase brings the cost down? Or have they run out of defects to point out? Or the extra cost is required for MkII R&D expenses. It will eventually save the same senior officer's bottoms. Please correct me if I am wrong.

Don't they know the profit or loss doesn't matter if both buyer and seller are the same government?

I didn't expect such childish comments from such senior officers and definitely didn't expect to be sensationalised by the media.

Anonymous said...

Gotta luv the IAF and the IA; these scoundrels have absolutely no shame raping mother India in broad day light.

Anonymous said...

^^ you should better watch your mouth when you address armed forces of India.

Its the red tape in induction program not the forces which are doing this.

remember the INS Talwar scandal. Weapons systems failed, Naval Service rejected to accept it. Yet it was inducted?

army chief was sent to Russia to induct a naval ship!! Now who was behind it.

Forces or red-tape?

Anonymous said...

People at that level of decision making should be responsible of the repurcussions. They should realize the impact it has on local R&D and general psyche.

For me the red-tape is synonymous with the services. A part of services give their life to safegaurd my freedom, part of it drains my tax money to foreigners btards.

We can't see them separate. When part of the body is sick, dont you call that whole individual sick? This disease gotto go..

Anonymous said...

Whats the Talwar scandal? details please

Anonymous said...

Looks Like LCA is going down the same way.

Engine will kill it, IAF is to Blame. (If No Kickback then nothing meets the requiement no matter what)

even if its not meeting the Thrust Requirment, it should be Inducted atleast as advance Trainer, for loging requird number of HRS & should try to achive desire engine Performance at the same time (with Outside Help). rather then waitting for 100% functional LCA & it turns out it is outdated & not needed any more.

Anonymous said...

Its Russia arm twisting and bribing MOD and army top brass to get their crap sold. Indian tech is far better than those vodka soiled Russian crap. But our babu's are worse...

Kersi K Dotiwalla said...

Why is it that the Army/ Air Force has accepted the Prithvi and Agni almost without any reservations ?

Simple. No one would sell such a system to India.

But Trishul / Akash / Nag / Arjun / Tejas / Sitara / Dhruv.

No There are plenty of firangis who can supply such "advanced systems"


Why buy locally when there is a foreign System available ?

The best thing to do toady is to explode a nuclear device and hopr the firangis will ban the sale of weapons and such items. Then Army & Air Force will quietly buy the local stuff

Anonymous said...

People here are criticizing the armed forces for procuring defense equipment from abroad but little does anyone realize that the quality of systems offered by the Indian defense industry is far below industry standards.

ARJUN is a failure, and its best we live with it.

LCA is another failure (what kind of fighter has a thrust to weight ratio below 1, especially the lightest fighter?).

In combat its the quality of equipment that matters, not the price paid for it. Before lashing out at the armed forces for rejecting home grown systems, realize that our home grown systems are not very good, and the rest of the world is far ahead of us.