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India demands $10 million from British military firm
Hindustan Aeronautics Limited had to re-tool and re-design equipments supplied by BAE.
Updated : Feb 10, 2010, 12:15 AM IST
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India is asking British military firm BAE Systems to pay millions of dollars for the troubles it faced in assembling jet trainers bought from the firm.
In its demand for compensation, Hindustan Aeronautics Limited (HAL) cites the difficulties faced in assembling the Hawk advanced jet trainers (AJT) which were bought for the Indian Air Force (IAF). Under the original contract of 2004, 42 of these single-engine aircraft were to be assembled by HAL and 24 to be delivered directly by BAE.
Several tools and equipment supplied by the British military firm had to be “reworked”, said a HAL source. “We faced plenty of problems with the entire programme” that delayed the assembling of the aircraft, the source added. The defence PSU had to “re-tool and re-design” many of the equipment supplied by BAE and there were issues with spare parts too which created trouble for HAL.
Because of the “unwanted trouble” that was “not mandated by contractual conditions”, the organisation has now asked BAE to pay it around $10.5 million, a sources said. Negotiations are under way between the supplier’s representatives and HAL officials in Bangalore, the source said.
It is unusual for such a compensation to be sought by an Indian firm in a military contract. The contract with BAE took shape after two decades of negotiations. In a strong signal of its unhappiness with the firm, the IAF had last year issued a fresh tender for another global competition to buy a new batch of 57 advanced jet trainers. Originally, these were also to be bought from BAE.
