The Tejas costs                                                            Prof. Prodyut Das

 

Introduction

The Tejas is without doubt the longest running project in Aviation History. Any criticism of the project is countered not by debate but by "flank  attacks"  the following being typical examples:

i)                 The critic has ulterior motives and likely to be in the pay of the import lobby. Going by the fact that it is ADA's failure that has helped the import lobby- this is rich.

ii)               The aircraft –an wonder of aviation design  “just round the corner” wrt to readiness for production. It has been that way for the last two decades.

iii)             It is the cheapest programme in the world and ADA has done a marvelous job on such a small budget. American programmes are hugely expensive running into billions.

In fact the last has been repeated so loudly and so long that most critics tended to accept that as de facto. Recently I did some calculations and it appears that the Tejas Mk1 development costs are roughly 33% MORE than the development cost of the F16. This is shocking because development costs in India should be 1/3^rd to 1/5^th the cost in America.

Analysis of costs is important because of the general threat environment, the parlous state of the IAF and the need to beef up R&D strength and funding. However  without increasing the efficiency of the organization the scarce resources will be wasted.

 

Methodology of the analysis

Given the seriousness of the topic and  in the interest of a meaningful debate I am detailing my procedure so that commentators can do their homework before commenting.

1.      The development cost of the Tejas programme was taken from the DRDO/INSDOC sources (Ref1)

2.      The cost of the American F 16 programme was taken from American official sources.( Ref2)

3.      The costs were compared by the following steps:

i)          The DRDO figure of Tejas development cost  is Rs.14,192 crores. This is the arithmetic sum and misleads. The Tejas programme had to be re-financed every ten years or so. Since the programme ran from 1983 to 2011 to achieve IOC 1 and because inflation is significant over long periods the amount of money at various times had to be brought to a common value –present day value -PDV- was used. This was to get a feel of the value of what we spent actually.

ii)               To arrive at  the PDV the official inflation rate of the GOI for that year was used

iii)             The American programme to IOC was much tighter- 7 yrs. The highest figure– 1977 dollars- was used as the development cost.

iv)              Comparisons could be done by factoring in PPP but there was a conflict of what DRDO official state in Ref .1  i.e.  Re1=$1 which is rubbish and the most likely value $1= Re.10. To avoid any controversy I therefore converted the sum sanctioned into weight of gold purchasable by that sum at the time of sanctioning.

The result shows that the F 16 was developed by spending the equivalent of 208 tons of gold whilst we spent the equivalent of 275 tons of gold to reach a very patchy IOC 1. This is against the figure of 36 to 46 tons only that we should have used. The American programme was about 33% cheaper and at IOC the F 16 could fire its guns in anger something even the FOC Tejas cannot do even today!   Any claim that ADA programme is much cheaper than foreign programmes is unsustainable.

A discussion of the results

1.      Generally product development in India should be 1/3^rd to 1/5^th the cost of developing the same product in the West. This is because the manpower costs in India are significantly cheaper in India. Compare HAL and Boeing salaries. It is borne out from personal experience in developing aerospace an defence products. 

2.      In Aeronautical Development where the cost of trained manpower is 70 to 90 % of the total project costs cost India should actually have even higher a competitive advantage.

3.     The original estimate of Rs 560 crores ( 26.7 tons of Gold )was probably done by Raj Mahindra and was quite realistic  but  would have needed a supplement of another 2-300 crores (in 1986 money) i.e. 10-20 tons of gold i.e total 36-46 tons of gold but 275 tons is clearly unexplainable.

4.      Misuse of funds is a possibility. Indeed the case of a wooden wind tunnel model being bought for a hundred time the price at which the Americans bought a similar model has been mentioned;  there is also mention that Dr. V.S. Arunachalam  was accused by an MP for misuse of funds and threatened with dismissal.(Ref.1). The CAG reports of that time (1980s-1990s) were unhappy with the keeping of accounts.

5.      The role of delay in pushing up costs is often not appreciated. As an example the salary and perquisite cost along with the support costs i.e. the money needed just to populate the ADA building would be a drain of  15-18 crores a month i.e. A five year period would see through a 1000 crores. ADA does project studies in 7-10 years, a delay of five years between roll out and first flight and two years to go from 22 to 24 alpha. At that pace no budget will be enough.

6. The harmful effect of serious cost over runs- the Tejas should have been done till IOC at Rs. 14-15,000 crores PDV instead of Rs. 55, 000 + crores PDV is that it starved other needy  projects. If this is typical of other DRDO projects then India will never have enough funds available for all its defense needs because the systems is too inefficient.

Table 1.

1	2	3	4	5	6	7	8
Sl.No	Item	Amount	Yr	Inflation	PDV2022rs.Crores	Gold. Rs/10gms.24 k	Gold wt.  in Tons
1	1st Fund	560	1986	12.102x	6777	2140	26.7
2	TDF	1628	1993	6.433x	10,477	4140	39.3
3	FSED	7428+2573	2004	3.54	23,427+8115	5850	126.97+45.53
4	NLCA1	2103	2003	3.57	7507	5650	37.22
	Totals	14,192crs.			55,428 crs.		275.21

 Going by the DRDO sources this above monies was spent on the development of the Mk1 airframe only up to TD +PV+LSP aircraft a total of 17 prototypes. The Radar, Kaveri Engine were in addition and the total cost of the project for the MK1 would cross Rs100,000 Crores. 

The American Budget

The American F 16 had a swifter genesis and development. Sanctioned somewhere in 1969-70 it was ready with IOC in 1976 at a cost of $ 891 million. Given that and the much lower rate of inflation in America at that time 1.5-2% the inflation has not been factored in but the final higher value in 1977 dollars- the Americans are budget conscious-has been taken. The value of gold was $133.7 /troy ounces. This gave a weight of gold as 208.19 tons was spent to develop the F 16 to IOC which in teh US means ready for combat.

Conclusions

1.The impression that  in ADA we have a R&D organization which is a bit slow but we are getting the development at a low cost is not borne out by the above. This may not be true of all DRDO organizations but certainly ADA needs a revamp and broad basing of its management or it will continue to fail and fail expensively.

2. By cornering a very large slice of the funds the Tejas project created a "drought" of funds and technical manpower for other projects . Well managed the alleged scarcity of funds should mitigate.

                                      

References 

1. Radiance in the Indian Skies  -The Tejas Saga-Air. Mshl. P Rajkumar and BS Srikanth DRDO  Min. Def. India 

2. 00100 - [A1051857 ]

Status of the F-16 Aircraft Program. PSAD-77-41; B-i63058. April 1, 1977. 21 pp. Report to the Congress; by Elmer E. Staats, Ccmptroller General.