US-based defence major Boeing on Friday hinted at hiking the price of 22 Apache attack and 15 Chinook heavy-lift helicopters which is at present valued at $ 2.5 billion. The company is expected to revise the cost of these machines at the end of this fiscal.
Addressing a presser in New Delhi ahead of Aero-India 2015, Boeing India president Pratyush Kumar, pointing out that the company has been pursuing the deal for five years, and it would be in the interest of all concerned if a decision was taken. “There is a point (till which) our ability to quote the price is limited. We are inching closer and closer to that point,” Kumar said in response to a question about the validity of the original request for proposal for helicopters. He said Boeing has reached a stage where it feels that it would be in “everyone’s interest to have a decision”. “The (defence ministry) kept asking for extensions and we did provide them as and when appropriate. It is not always possible to keep extending, because we live in a world where we feel inflationary pressure,” he said.
Sources in the ministry of defence have indicated that it is set to approach the Cabinet Committee on Security for the acquisition of 15 heavy-lift twin rotor Chinook and 22 Apache Longbow helicopters from Boeing. The $2.5 billion deal was cleared by the Defence Acquisition Council under then defence minister Arun Jaitley last August. Incidentally, the present Defence Procurement Policy does not allow room for increase in price once a bid has been shortlisted.
“The manufacturer had extended the agreed price to March after the October 2014 deadline expired. If Boeing decides to revise prices of both Chinook and Apache after the new deadline, the deal will have to be re-tendered and re-negotiated. This concern has been conveyed to the highest level in the government,” said an official. The delay took place despite the manufacturer dropping the contentious limited liability clause at the instance of Indian negotiators.