LCA Faces Huge Cost Escalation

• According to sources, the first 40  TEJAS LCA to be inducted in the Indian Armed Forces will cost roughly $33.3 million excluding its development cost.
• As for the development cost of the LCA, the overall figure is to the tune of $3.8 billion which is a 3000 per cent hike from the cost during the conception of the project over two decades ago. The sanctioned cost includes the fighter's naval variant, which will run till December 2018.
• The LCA has carried out around 1,420 flights with 10 prototypes till date. The full-scale engineering development (FSED) Phase-I till March 2004 cost Rs 2,188 crore. The Phase-II, to be completed by December 2012, will cost another $1.28 billion.
  
• In addition, there is the fabrication of two Tejas Mark-II, with alternate engines, to be completed by Dec 2018 for $540 million, along with development of indigenous technologies for $88 million. The Naval Tejas FSED Phase-I, in turn, is to be completed by Dec 2014 for $38.1 million, with Phase-II slated for completion by December 2018 for another $426.8 million.
• LCA is to be powered by General Electric engines and India recently finalised a $822-million deal for 99 GE F-414 engines. While the first 20 Tejas for the IAF will be powered by GE-404 engines, the next six Mark-II squadrons will have the more powerful GE F-414 engines.
  
• The choice of GE engines for  LCA has also rendered a loss of $630.8 million which was spent on the development of the indigenous Kaveri engine since 1990. 
• The program has encountered several delays that have extended the development effort by over two decades. The LCA first ran into rough waters as the design was being finalised in 1990 when a government commission found several deficiencies in critical technology areas. This resulted in the decision to build two technology demonstrator aircraft to ensure these issues could be resolved.
  
• The first of these aircraft rolled out in 1995, but difficulties with the flight control system and manufacturing of composite structural components kept the plane grounded. Another major setback occurred in 1998 when India's nuclear tests prompted the US to place sanctions on the sale of General Electric F404 turbofans for the LCA.
• LCA will replace the MiG aircraft and Sea Harriers with the IAF and Indian Navy respectively.