The Comptroller and Auditor General (CAG) has castigated state-owned Hindustan Aeronautics Limited (HAL) for serious lapses in the design and development of aircraft engines including the absence of feasibility studies and project reports, ignoring technical review by domain experts, use of “substitute” and not original materials in manufacturing, that lead to production delay and a loss of Rs 159.23 crore as of March 2022.
“HAL did not envisage the risks associated with Project 1 which resulted in taking up several unplanned activities. The scope of the project was modified after the initiation of the D&D (Design and Development) activities. Further, HAL failed to anticipate the delay in availability of the originally planned material due to which the Core Engine 1 was manufactured using substitute materials,” the CAG said in its report on defence PSUs for the year ended March 2020.
This resulted in HAL manufacturing a second Core Engine 2 with the originally planned material. “The expenditure of ₹159.23 crore incurred as of March 2022 was impaired,” the auditors said.
The CAG in its report also highlighted deep flaws such as “incorrect assessment of the required thrust and lack of clarity on availability of A Type Engine leading to improper engine selection which in turn had a cascading effect on the D&D process of Project 2 (engine).” Further, lack of clarity on the resolution of stall and spin issues and improper planning in the initial stages of the development process, led to a delay of more than 20 years in the project that was initiated in July 1999, the CAG pointed out.
The D&D of Aircraft 2 was initiated in 2014 with the internal resources of HAL for the avionics upgrade of the platform. “No business plan was drawn up either before embarking upon the project or during the progress of the project so as to ensure Recovery of Investment (RoI). As there was no firm commitment for Aircraft 1, the entire expenditure incurred amounting to ₹153.98 crore was impaired,” the report said.
The report was presented in parliament on Thursday.
