NEW DELHI - A defence deal expected to cost over Rs 2,000 crore to buy 20 Hawk Advanced Jet Trainer planes is likely to be called off by the Air Force as the negotiations for it have been stuck for almost three years now over steep price hike by the vendors, India today has reported.
The Air Force is also not interested in the upgrade of its fleet of over 120 Hawk planes that were inducted into service after a deal with Britain in 2004. The HAL is offering to upgrade the Hawk fleet of the Air Force to Hawk India jets by adding combat capabilities, government sources told Mail Today.
"The benchmark price of each aircraft was around Rs 90 crore but the initial price offered by the vendors including the public sector Hindustan Aeronautics Limited (HAL) was more than double," the sources said.
"In the contract negotiations, the vendors have cut down the price but even now, the price offered is more than 60 per cent of what the defence ministry is willing to pay for the planes," they said.
Another reason over which the deal may be called off is that due to government's directive for utilising the funds optimally, the priority of the ministry is to buy more of war fighting equipment rather than go in for systems that do not fit that bill, the sources said.