The tussle mounts: HAL is slacking on delivery, IAF is withholding payments

New Delhi: The Indian Air Force (IAF) has not paid its dues to Hindustan Aeronautics Ltd (HAL) since September because of delays in deliveries by the state-owned defence behemoth, Defence Minister Nirmala Sitharaman has said. The financial state of HAL has been dire, resulting in the defence public sector undertaking (PSU) borrowing around Rs 1,000 crores to pay salaries to its employees.

The delays

HAL has delayed programmes such as the Mirage 2000s, Sukhoi 30s, Jaguars and the Light Combat Aircraft. Air force operations were obstructed at Siachen Glacier, one of the world's highest battlegrounds, earlier in January, as HAL did not provide adequate rotor blades crucial for its light helicopters, the Cheetah and Cheetal choppers. 

"If HAL says its payments are delayed, IAF says deliveries are delayed. HAL's argument is that IAF keeps changing its standards," Sitharaman said during an interview with The Economic Times.

"IAF's stand is specifications can be frozen only if delivery happens within a reasonable time. IAF asks, if delivery is delayed by several years, is it under compulsion to buy outdated equipment or can it ask for an upgrade?"

Till December 31, the total dues stood at Rs 15,700 crores, and are expected to reach Rs 20,000 crores by March 31. Out of the Rs 15,700 crore, about Rs 14,500 crore is due from IAF while the remaining is expected from the Indian Army, Navy and the Coast Guard.

Need to work together

The Defence Minister added that HAL needs to work together with the Air Force and Indian Navy to seek a solution to their delays. "Air force, Army and Navy have to sit with HAL and see how best they can speed up things. Ministry has to work towards strengthening existing capabilities," Sitharaman said.