India invokes penalty clause against General Electric for engine delays for LCA-Mk1A
India has invoked the contractual obligations on U.S. engine manufacturer General Electric (GE) for repeated delays in deliveries of the F-404 engines[1] to power the indigenous Light Combat Aircraft (LCA)-Mk1A manufactured by Hindustan Aeronautics Limited (HAL). However, sources said there were politics involved, and termed it a "pure logistical issue." There are two engines available with GE now that will be given to India, sources said.
They will be used to deliver two jets to the Indian Air Force (IAF) to account for deliveries in the current Financial Year. The regular delivery of engines is now expected by March-April 2025, which is a two-year delay from the contractual terms, an official source in the know said. As per the contract, the original equipment manufacturer will be penalised and the same will be implemented, the source said.
Another source in the know confirmed that the penalty clause in the deal has been invoked. The engine delays were also discussed between the National Security Advisors of the two countries when they met and was also taken up during the visit of Defence Minister Rajnath Singh. In February 2021, the Defence Ministry had signed a INR48,000 crore deal with HAL[2] for 83 LCA-Mk1A, a more capable fighter than the current LCA-MK1 in service.
Following this, in August 2021 HAL signed a £716 mn deal with GE Aviation for 99 F-404 aircraft engines and support services for the LCA-Mk1A. As per the contract, three LCA-MK1A were to be delivered to the Indian Air Force (IAF) in February 2024 and 16 aircraft per year for subsequent five years.
Supply chain issues
"GE issue is a purely logistical issue[3]. There are no politics involved," the first source said, adding that GE has supply-chain issues with the engines and they are now tying that up to restart regular production.
In response to a query from The Hindu, a GE Aerospace spokesperson reiterated their earlier response, "The Aerospace industry continues to experience unprecedented supply chain pressures. GE Aerospace is working with our partner HAL and suppliers to resolve constraints and deliver F404-IN20 engines for the LCAMk1A programme." The Security of Supply Arrangement (SoSA) that India and the U.S. concluded recently enables this kind of cooperation, sources noted.
In addition to the 83 Mk1A aircraft on order, the Defence Ministry has approved the procurement of another 97 LCA-Mk1A. This would eventually make 180 LCA-MK1A jets and 220 jets of the MK1 variant. The combined cost of the 180 Mk1As is an estimated at INR1.15 lakh crore.
In the backdrop of repeated delays having a cascading effect of aircraft deliveries of the jets, HAL has worked out a plan for using Category-2 or used engines as it is a temporary measure till the new engines arrive, as reported earlier.
Published - October 29, 2024 01:19 pm IST
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- ^ delays in deliveries of the F-404 engines (www.thehindu.com)
- ^ signed a INR48,000 crore deal with HAL (www.thehindu.com)
- ^ logistical issue (www.thehindu.com)
- ^ Email (www.thehindu.com)