High cost of Mirage-2000 upgrade raises eyebrows

Should India have simply gone in for new fighters rather than upgrading its 51 Mirage-2000s at an exorbitant cost? This question came to the fore once again on Monday with defence minister AK Antony telling Parliament that the upgrade cost for each jet was Rs 167 crore.

This when the last lot of the French-origin Mirage-2000s - their induction began in the mid-1980s - contracted by India in 2000 cost just Rs 133 crore apiece. However, Antony, in a written reply to Lok Sabha, said, "Applying an escalation of 3.5% per annum as per the pricing policy review committee, to the contracted cost of the year 2000, it works out to be Rs 195 crore at 2011 levels. Thus, the upgrade has been undertaken at 85% of the aircraft's escalated cost."

However, the Rs 167-crore figure does not give the full picture. The overall upgrade programme of the Mirage-2000s is pegged at Rs 17,547 crore, with the first two fighters being upgraded in France and the rest (49) by Hindustan Aeronautics (HAL) under transfer of technology (ToT). If this figure is taken into account, then each Mirage upgrade will cost Rs 344 crore.

India has inked two separate contracts in the upgrade programme, which kicked off last year with the help of French companies Dassault Aviation (aircraft manufacturer) and Thales (weapons systems integrator).

In July 2011, the upgrade programme was finalized at Rs 10,947 crore, which included both the French and HAL work-shares. Then, early last year, the second contract worth around Rs 6,600 crore for 490 advanced fire-and-forget MICA (interception and aerial combat missiles) systems to arm the fighters was finalized with French armament major MBDA. The overall upgrade package may even cross the Rs 20,000 crore-mark over the decade it will take to complete it, as earlier reported by TOI.

However, both MoD and IAF - down to just 34 fighter squadrons when over 44 are required to deter both Pakistan and China - maintain the upgrade will ensure the multi-role Mirages become "virtually new fighters" that will "remain current and potent" for over two decades more.

"Mirages have performed superbly since induction. IAF is going in for new acquisitions, which take a long time in our circumstances, as well as upgrades to retain its combat readiness," said an official.

Holding major upgrade decisions are "suitably negotiated" in a competitive environment, Antony admitted, "However, this (Mirage) upgrade programme also includes fitment of advanced multi-mode target radar, reconfigured glass cockpit and advance avionics, state-of-the-art electronic warfare system and capability to launch advanced missiles."

Even as it progressively inducts 272 Sukhoi-30MKIs contracted for Rs 55,717 crore, IAF is also undertaking upgrade of its 63 MiG-29s at a cost of $964 million deal inked with Russia in March, 2008.

The force is also heavily banking upon the almost $20 billion MMRCA (medium multi-role combat aircraft) project to acquire 126 French Rafale fighters from Dassault, the final commercial negotiations for which are now in progress. 

Times of India