Sunday, December 18, 2011

50:50 Funding for Indo-Russian Aircraft Project

It seems that Defence Minister A K Antony's strong words have had their desired effect on the Russians in the multirole transport aircraft deal.

The two sides had locked horns over the project as New Delhi was not happy with the Russian proposal for the joint development of the 20 tonne class transport aircraft.

"The Russian have now agreed for a 50:50 funding for co-developing the aircraft and have also agreed to give an increased work share to the HAL for the programme," Defence Ministry sources told

The Indo-Russian project to develop a multi-role transport aircraft had run into rough weather after the Centre raised objections over the business plan proposed by Moscow for the project.

India was "not satisfied" over the business plan submitted by the Russian side as there was nothing much for its engineers and scientists to do in the development of the proposed aircraft, Defence Ministry sources said here.

Defence Minister AK Antony had expressed India's views on the issue to his Russian counterpart Anatoly E Serdyukov during his visit to the European nation in October for the 11th meeting of the India-Russia Inter-Governmental Commission on Military Technical Cooperation (IRIGC-MTC).

Antony had also expressed concern at the tardy progress made in the design and development of the MTA.

The two countries wanted the issues related to the aircraft to be resolved before the visit of Prime Minister Manmohan Singh to Russia in this month.

The project has already got delayed. The Defence Ministry had last year said it would start by beginning of this year.

The Hindustan Aeronautics Limited and Russian Companies UAC Transport Aircraft and Rosonboronexport had signed a shareholders' agreement to incorporate a Joint Venture Company for design, development and production of MTA.

The agreement was in pursuance to a deal sign between India and Russian on November 12, 2007 for design, development and production of a MTA.

The Joint Venture Company will have 50:50 shareholdings and the investment for the programme was worked out to be USD 600.7 million.

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