HAL awaits Rs 20,000-cr dues and fresh LCA orders from the IAF

Hindustan Aeronautics Ltd. (HAL) is working towards completing by December the first Light Combat Aircraft (LCA) made to the Air Force’s final operational clearance (FOC) configuration, according to R. Madhavan, CMD of HAL.

“Beyond that, we aim to produce one LCA every month,” he said. The FOC for the plane was given in February last. The IAF had bought 20 LCAs in the FOC version, having already received the first lot of 20 in the Initial Operational Clearance (IOC) version, he observed on the sidelines of the Air Chief Marshal L.M. Katre memorial lecture here on Sunday.

“We have the capacity to make 16 LCAs a year [at the Bengaluru complex.] We expect that the firm order for the approved 83 planes also comes in,” he said. The order is worth around Rs 59,000 crore.

However, after recent price negotiations on this purchase, HAL had not received any order yet. Right now, money was its first concern, Mr. Madhavan said. Fresh orders apart, the defence PSU urgently needs the cumulative arrears of around Rs 20,000 crore from the IAF. Last year, HAL had to borrow Rs 1,000 crore from banks in an unprecedented act for paying staff salaries and routine expenses.

“Until now we have somehow managed [our finances] with our funds and from bank loans. I hope something will come through soon for us to maintain the level.” Expectation is also on the revised estimates in the defence budget and some money from deliveries to the Army.”

Which was why, he said, even if the order for the 83 LCAs came in, “We can take it up only if it comes in with the money associated with it.” The money was needed for materials, besides design work taken up with development body, the Aeronautical Development Agency.

HAL, he said, was also keen on contesting for Malaysia’s tender for 12 fighter planes in the LCA category.

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