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The state-owned Hindustan Aeronautics Limited (HAL), which has faced successive obstacles in assembling the “Hawk” Advanced Jet Trainers (AJT) bought from BAE Systems of UK, is now demanding compensation to the tune of $10.5 million from BAE Systems for not fulfilling their contractual obligations.
Under the 2004 contract, BAE Systems’ 24 “Hawk” AJTs were to be delivered directly and 42 were to be assembled at a HAL facility in India. BAE Systems, under the $1.2-billion contract, supplied 24 ready-built Hawk-132 AJTs and transferred the technology for building another 42 in HAL, Bangalore. As per the schedule, the first 15 Hawks should have already been built in Bangalore but only five have been completed.
HAL officials indicated that the entire programme has been plagued by delays due to shortcomings from the BAE Systems. HAL claims that several tools and equipment supplied by the British firm had to be re-designed and there was consistent issues regarding the spare parts. In addition, HAL had also blamed the constant miscommunication between the BAE representatives in India and the UK which affected the workflow of the ‘Hawk” production at the HAL facility in Bangalore.
As of now, HAL has asked BAE to pay around $10.5 million in compensation and the negotiations are under way between the BAE representatives and HAL officials in Bangalore, sources said. HAL claims that the trouble that they had to undergo was “not mandated by contractual conditions”.
As for the delays in the “Hawk’ production in India, the state-owned HAL is having to face the brunt of criticism from the IAF due to the delays in “Hawk” production. HAL has criticised BAE Systems for failing to carry out its contract to transfer technology, design drawings, tools, manufacturing jigs and components essential for manufacturing the “Hawk” trainers in India. BAE Systems, on the other hand, had earlier denied any failure to fulfil its contractual obligations saying it had already supplied the spares 18 months ago and was willing to support HAL in any issue related to “Hawk” trainers.
In October last year, the Indian Air Chief Marshal P.V.Naik had clearly said that if BAE Systems does not agree with the Indian benchmark and its expectation, then India will look for other options for the AJT. In fact, the IAF has issued a new request for information (RFI) to global trainer aircraft manufacturers and is already pursuing the acquisition deal for a fresh batch of AJTs on a fast-track basis. This is a setback for BAE Systems since in the normal course; it would have got a go-ahead signal with its assembly line ready in India.
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