The Hindu : Business : Boeing signs $1 b deal with HAL

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Saturday, Dec 22, 2007
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Boeing signs $1 b deal with HAL

pecial Correspondent

To source sub-systems for freight aircraft; preparing for MRCA

NEW DELHI: The U.S. Aircraft major, Boeing, has signed a memorandum of understanding with state-owned Hindustan Aeronautics Limited (HAL) to source sub-systems for fighter aircraft and helicopters.Boeing has signed a ten-year MoU to bring over $1 billion of aerospace manufacturing work to the country. The agreement was signed here by HAL Chairman Ashok Baweja and President and CEO of Boeing Integrated Defence Systems, Jim Albaugh.

“This is a significant step that opens up new avenues and areas of cooperation. HAL and Indian industry will gain from this long-term business arrangement in terms of technology upgrade, while Boeing can look forward to a reliable source for its product requirements,” observed Mr. Baweja.

Boeing said that in addition to offering competitive rates for the products it wanted HAL to join hands in “seeking recognition by the Union Government for the value of the work packages and technology transfers in support of credits against existing or future offset obligations.” In other words, Boeing is preparing for the huge multi-role combat aircraft (MRCA) tender and is hoping the contract given to HAL would be counted as off-set.

The Rs. 42,000 crore MRCA tender has stipulated 50 per cent in direct off-sets. This means that half of the value of the contract should be sourced from India. At present, only direct off-sets are allowed. Boeing along with some other companies is hoping that crediting of off-sets would also be allowed when the Defence Procurement Policy 2006 is reviewed.

Mr. Albaugh denied that the MoU was linked to HAL persuading the Government to consider this contract as off-sets and said work worth $20 million is likely to be given to HAL straightaway. The attempt to involve HAL was part of Boeing’s plan to involve the Indian industry and the official promised more announcements regarding tie ups with the Indian private sector in the near future.

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