IAF C-17 price confusion clarified

The confusion over the price for the sale of ten C-17 aircraft to the Indian Air Force (IAF), about which US President Barack Obama made a preliminary announcement, has been clarified.

News reports on Wednesday indicated a difference in the price of USD 4.1 billion quoted by the White House on one hand and the manufacturer Boeing, which cited a figure of USD 5.8 billion, also one which had been conveyed by the US Defense Security Cooperation Agency (DSCA) in its notification to the US Congress, last April.

A US Government source, who declined to be named for purpose of this report, clarified to StratPost on Wednesday, that the amount of USD 5.8 billion could ‘include as many potential case options as might realistically be considered’, like support equipment and unique engineering requirements.

A statement issued by the US Embassy in New Delhi at the time of the notification also said of this amount, “This represents the highest possible estimate for the sale, and includes all potential services offered,” adding, “The actual cost will be based on Indian Air Force (IAF) requirements and has yet to be negotiated.”

This higher-side estimate was quoted keeping in mind the possibility that the IAF may also choose to purchase training equipment, spare and repair parts, test equipment, ground support equipment, equipment for training for aircrew and maintenance personnel, services like technical assistance, engineering services, logistical and technical support, as well as unique modifications specific to the requirements of the IAF.

“The danger in estimating low during the Congressional Notification (CN) stage is that if the case value lands up as (even) USD 01 higher, the case has to be returned to Congress for additional approvals or the case scope must be adjusted to bring the value down,” explained the source to StratPost.

“USD 4.1 billion more closely represents the case value in its current state and that figure only includes the options India is actually considering,” he clarified, adding further, “Additionally, the US Government waived non-recurring engineering costs, which saved the Government of India a significant amount of money on the aircraft. These costs had been included in the CN value.”

The IAF completed the flight trials of the aircraft last summer. The commercial negotiations remain to be completed.

The April notification by the US DSCA to the US Congress said the IAF had requested a package that included ten Boeing C-17 GLOBEMASTER III aircraft, 45 F117-PW-100 engines (40 installed and 5 spare engines), ten AN/ALE-47 Counter-Measures Dispensing Systems, ten AN/AAR-47 Missile Warning Systems, spare and repairs parts, repair and return, warranty, pyrotechnics, flares, other explosives, aircraft ferry and refueling support, crew armor, mission planning system software, communication equipment and support, personnel training and training equipment, publications and technical data, US Government and contractor technical, engineering, and logistics support services, and other related elements of logistics support.