Economy

Govt-to-govt sale of Howitzer M777 is still pending: BAE Vice-President

Nayanima Basu New Delhi | Updated on January 17, 2018

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‘Our focus is on supporting the Indian and American governments on the howitzer deal’



The Defence Ministry gave its nod last month to procure 145 pieces of M777 155mm/45-calibre ultra-light Howitzer battlefield guns from BAE Systems under the Foreign Sales Military route with the US.

In an interview to BusinessLine, Joe Senftle, Vice-President and General Manager (Weapon Systems), BAE Systems Inc., said the deal for government-to-government sale is still pending. Edited excerpts:

Now that the Defence Ministry has approved the deal, would you be looking at more sales? Are talks going on to purchase 500 pieces from BAE? 

We cannot speculate on the future requirement, as that is the prerogative of the Indian government. At this moment, our focus remains on supporting the Indian government and the US as they advance the Foreign Military Sale of the M777 Lightweight Howitzers.  

Can you share some details on your collaboration with Mahindra to co-produce these guns? Where will the plant be set up and how much investment has gone into this deal? 

Earlier this year, we announced the down-selection of Mahindra as our supplier for the Assembly, Integration & Test (AIT) capability for the M777 Ultra Lightweight Howitzer. We have been working with them to finalise requirements for the facility in Faridabad (near Delhi). It would not be appropriate to provide more details at this time while the government-to-government sale is still pending.

When can we expect the plant to be ready and when do you foresee the first batch of Howitzers being shipped from there? 

Work will begin almost immediately upon implementation of the Letter of Acceptance (LoA) and the subsequent US government contract award to BAE Systems. The delivery will commence around six months after the Indian government accepts the first two guns. 

Has the deal cost been revised from around $630 million to $750 million? Do you see the cost escalating further? 

BAE Systems is not in a position to comment on the changes between the previous LoA three years ago and the current offer from the US.  From our perspective, we have worked collectively with the US government and our supply chain to minimise price escalation and address challenges associated with re-starting production, whilst maintaining delivery of systems within six months following the implemented LoA.

Will you have an arrangement of transfer of technology in this? 

This arrangement involves the Transfer of Capability (ToC) into the AIT facility in India, which will be the first ever transfer of this capability to the Indian private sector. This is a fundamental part of the M777 production line, and the only AIT facility for the M777 outside of the UK.

Are there also plans for exports from the Faridabad facility?

The M777 remains at the top of modern artillery planning requirements across the globe. Wherever there is a need to rapidly deploy forces, or permanently deploy accurate, reliable firepower in inaccessible locations, this remains the system of choice.

Our primary focus remains in supporting the US and the Indian governments in closing this LoA as quickly as possible, and commencing the deliveries in accordance with the schedule set forth in it. 

Published on July 01, 2016

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