HAL imposes penalties on GE for F404 delays

New Delhi: Penalties have been imposed on GE Aerospace for delays in supply of F404 engines for the Light Combat Aircraft programme, even as negotiations continue with the US manufacturer for transfer of technology of a more advanced power plant.

Hindustan Aeronautics Ltd (HAL) officials said liquidated damages have been imposed on the US company as it failed to deliver engines for LCA Mk1A on time. They added the penalties are being imposed on the delivery of every delayed engine.

HAL had placed an order for 99 engines, with supplies slated to start by 2024. However, due to supply chain issues, GE could not deliver the engines on time and as of now just six power plants have been delivered. The order was valued at $700 million. An additional $1 billion order for 113 F404 engines was inked with GE last year for the second batch of LCA Mk1A fighter jets.


Officials said the US company has promised delivery of 20 more engines by year end as manufacturing has picked up. Earlier, GE had said that it has sorted out supply chain constraints by identifying alternate suppliers.

While HAL officials did not specify the quantum of penalties imposed on GE, defence ministry norms generally limit liquidated damages to 10% of the contract value. The penalties are imposed at the time of each delayed delivery.

HAL is continuing discussions with the US manufacturer for transfer of technology of more advanced F414 engines. The next version of the Tejas fighter jet - LCA Mk2 - is already under prototype production and will be powered by GE414 engine which will also be produced in India under a technology transfer deal.

The first LCA Mk2 is expected to be ready for serial production by 2027. MK2 will be capable of staying in the air longer than previous versions and will also have significantly more weapons payload capacity.