MoD rejects ‘speculative reports’ on pricing, terms of MQ-9B drone deal with U.S., says yet to be finalised

Ministry of Defence says it will compare the acquisition cost with the best price offered by General Atomics to other countries

A MQ-9B long endurance drone. File  | Photo Credit: General Atomics Aeronautical

Rejecting “speculative reports” on social media with regard to the price and other terms of purchase of the 31 MQ-9B High Altitude Long Endurance (HALE) Unmanned Aerial Vehicles (UAV) from the U.S., the Ministry of Defence (MoD) on June 25 said the estimated cost provided by the U.S. Government is $3.072 billion but the price and other terms and conditions of the purchase are “yet to be finalised”. The MoD will “compare the acquisition cost with the best price offered” by General Atomics (GA) to other countries, it said.

The Defence Acquisition Council accorded the Acceptance of Necessity (AoN) on June 15 for the acquisition of 31 MQ-9B — 16 Sky Guardian and 15 Sea Guardian — UAVs for the three services through the Foreign Military Sale (FMS) route. The AoN included the number of UAVs to be procured along with associated equipment.

“The AoN noted the estimated cost of $3,072 million provided by the U.S. Government. However, price will be negotiated once policy approval of the U.S. Government is received. The MoD will compare the acquisition cost with the best price offered by General Atomics (GA) to other countries,” a Ministry statement said. “The procurement is in progress and would be completed as per the laid down procedure.”

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Detailing the process to be followed, the Ministry said that under the FMS route, a Letter of Request (LOR) would be sent to the U.S. Government where tri-services requirements, details of equipment and terms of the procurement would be included. “Based on LOR, the U.S. Government and MoD will finalise the Letter of Offer and Acceptance (LOA) where details of equipment and terms of the procurement would be negotiated and finalised in accordance with the FMS program and the price and terms offered by the U.S. Government and GA to other countries,” it stated.

In this regard, referring to the “speculative reports” on social media with respect to the price and other terms of purchase, the Ministry said these are “uncalled for, have ulterior motives and aimed at derailing the due acquisition process”. “Price and other terms and conditions of the purchase are yet to be finalised and subject to negotiations,” the statement added requesting not to spread fake news and misinformation which can have a serious impact on the “morale of the armed forces and adversely impact the acquisition process.”

As reported by The Hindu earlier, the LoR is expected to be sent to the U.S. Government in the first week of July and defence officials said the process is expected to take a few months. India is also negotiating to increase the indigenous content in the deal, from the current 8-9% to 15-20% which will significantly increase sourcing from Indian industry.

According to the joint statement issued after talks between U.S. President Joe Biden and Prime Minister Narendra Modi, the MQ-9Bs, will be assembled in India and General Atomics will also establish a comprehensive global Maintenance, Repair and Overhaul (MRO) facility here.