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British AJT deal hits air pocket

March 11, 2004 21:05 IST

The purchase of British Aerospace Hawk Advance Jet Trainers by India, the biggest defence deal in over a decade worth over Rs 8,000 crore, has run into rough weather with company officials refusing to budge on the price agreed last September.

As the talks between the company officials and the defence ministry in New Delhi entered the fourth day on Thursday, the signing of the contract for purchase of 66 Hawk 115Y trainers appeared to be in jeopardy owing to an "accounting oversight", official sources said.

They said that the deal was expected to be signed formally this week, but now it is almost being renegotiated as the Hindustan Aeronautics Limited, which was to assemble 44 Hawks under transfer of technology, forgot to include some costs for tooling and training at its plant in Bangalore.

The oversight could increase the cost of the deal by several million pounds per aircraft.

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