New Delhi: The Comptroller and Auditor General (CAG) of India has reprimanded state-run Hindustan Aeronautics Ltd (HAL) for not envisaging the risks associated with the design and development of certain aircraft engines, leading to a wasteful expenditure of nearly Rs 160 crore, ThePrint has learnt.
In its 18th report on Public Sector Undertakings (PSU), tabled in Parliament last week, the auditor added that the scope of the project was modified after the initiation of design and development activities. ThePrint has a copy of the report.
The CAG added that in the case of a “Core Engine 1 [project unidentified in the report]”, the state-owned facility “failed to anticipate the delay in availability of the originally planned material” due to which it was manufactured using “substitute materials”.
It further pointed out that this then led HAL to approach the company’s board to sanction the building of a second engine — Core Engine 2— with the originally planned material. The overall cost borne by the exchequer due to this was Rs 159.23 crores as of March 2022, stated the report.
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‘No technology gap analysis’
According to the CAG report, in September 2012, HAL approved an estimated expenditure of Rs 441.41 crore for the design and development (D&D) of gas turbine engine, “with an aim to develop critical competency and achieve self-reliance”.
The auditor added that HAL anticipated a market for such an engine on the requirement of trainer aircraft for the armed forces, development of regional jets, autonomous unmanned research aircraft of Aeronautical Development Agency (ADA), future drones or unmanned combat aerial vehicle (UCAV) and small business jets.
The design and development of the engine was proposed in two stages, stated the report, noting that the first stage pertained to project definition and design while the second stage involved design and prototype development, tests and clarification.
HAL’s board has sanctioned a total amount of Rs 185.87 crore until March 2021 for this.
According to the report, the first stage in the development of the gas turbine engine was completed with an expenditure of Rs 52. 87 crore. For the delay in completion of stage I, HAL stated that the delay was due to “modified scope”, for which the timeline got extended from September 2014 to December 2015.
CAG underlined that the design and development of the engine development project was “still under progress (as of July 2022 even four years after the scheduled completion date of the project and after incurring an expenditure of Rs. 159.23 crore which eventually impaired in the financial statements during the years 2019-20 to 2021-2022 by HAL as a loss.”
The auditor also accused HAL of not planning the design and development activities properly, and stated that technology gap analysis was not carried out between building of Core Engine 1 and Core Engine 2.
(Edited by Poulomi Banerjee)
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