CAG pulls up HAL for delay in supply of trainer aircraft to

Pulling up Hindustan Aeronautics Ltd (HAL) for an inordinate delay of 14 years in the development and supply of a trainer aircraft, the CAG has observed that the time overrun has affected the Stage-II training of IAF pilots.
In its latest audit report tabled in Parliament, the Comptroller and Auditor General also noted that advances to the tune of Rs 2,953.88 crore released to HAL against the contract remains unutilised.
Besides, the aircraft under development would be heavier as compared to Indian Air Force parameters and that may affect training-related performance, the report observed.
Conclusion of the contract for series production of the trainer aircraft even before IOC/FOC of prototypes resulted in advances of Rs 2,953.88 crore lying unutilised, the CAG said.

At the time of submitting the proposal to the Cabinet Committee on Security (CCS) for procurement of 12 Intermediate Jet Trainer-Limited Series Production aircraft, the Defence Ministry had stated that the experience gained from the operational exploitation of the machines would be conveyed to HAL for incorporation of necessary modifications on the subsequent series production.
Air Force had also clarified to HAL in September, 2007, that the order for series production would be placed after the induction of the 12 IJT-LSP aircraft, the report said.

"However, we observed that against their own commitment, Air HQ had initiated a proposal for supply of 73 SP-IJT aircraft from HAL even before completion of IOC and Final Operational Clearance (FOC) of prototype aircraft and delivery of any of the 12 IJT-LSP aircraft to IAF," the CAG said.

According to the report, the Air HQ stated that CCS had okayed the procurement of 73 IJT-SP aircraft in order to fill the void created by the phasing out of Kiran aircraft and to provide lead time to HAL to commence series production.
"We also observed that while seeking approval of 73 SP-IJT aircraft from CCS in February, 2010, the ministry had stated that the delivery of 12 LSP-IJT would be completed by 2011-12," it added.
It also assured the Ministry of Finance that delivery schedule of 73 SP-IJT (2013-17) would be met and there would not be any delay in the SP-IJT aircraft that would cause avoidable blocking of funds, the report said.

The CAG report said that a contract was concluded (March 2010) with HAL through production for procurement of 73 SP-IJT aircraft with delivery schedule of 2013-17. An advance payment of Rs 926.15 crore was released to HAL upon signing of the contract.
"We also observed that out of an advance of Rs 2,989 crore (including DRE5 and Capital) paid to HAL upto April, 2014, for production of 73 SP-IJT aircraft, HAL could utilise only Rs 35.15 crore and, therefore, funds to the tune of Rs 2953.88 crore were lying with HAL as unutilised advance," the CAG pointed out.