CAG asks NAL to forget about 70-seater aircraft news
29 October 2008

New Delhi: The Comptroller and Auditor General of India (CAG), which audits and assists the state and central institutions on their accounts and accountability, has told the National Aerospace Laboratories (NAL) to put away its plans to make a 70-seater passenger plane on account of delayed progress on its 15-seater Saras aircraft.

NAL falls under the Council of Scientific and Industrial Research (CSIR), and has been attempting to develop a basic trainer aircraft called Hansa, along with and 15-seater passenger plane called Saras for around 20 years now.

In a report presented to the Indian Parliament last week, the CAG has said that given the poor market demand for Hansa, and the delayed progress and cost overruns that the development of the Saras aircraft has seen, the ministry and / or the CSIR ''may reconsider the proposed plan for development of a 70-seater regional transport aircraft.''

The working group on the CSIR had proposed the design and development of a 70-seater plane suited for regional transportation for the 11th Plan.
Widespread mismanagement.

The CAG also reprimanded NAL for having imported 28 seats for the Saras plane in July 2002 at a cost of Rs80 lakh, which had still not been fitted aboard the aircraft till date. In its report, the CAG said that the reason for not using the seats even five years after they were received ''were not found on record''. The CAG said that NAL had stated in July 2007 that the seats would be fitted after the Directorate General of Civil Aviation (DGCA) certified the aircraft.

The CAG also said that since the seats were bought in advanced and not used for a period of five years, the amount of Rs80 lakh remained blocked for the duration, indicating that the money could have been better utilized elsewhere. It said the CSIR ''did not offer any comments on the issue''.

The CAG also said that the two-seater Hansa aircraft was still being manufactured with imported components, since NAL was yet to develop the sub-systems indigenously. It said the 14-seat Saras project was suffering from time and cost over-runs, saying that a detailed audit of the projects laid bare the fact that the programme was not properly planned and was mismanaged.

For the Saras project, the CAG expressed its displeasure over the fact that NAL had bought engines with a capacity of 850 shift horsepower (SHP), even though the DGCA's rules for airworthy certification mandated engines with a capacity of 1,200 SHP. It also censured NAL for failing to procure critical components such as an auto-pilot system.

The CAG noted that an expenditure of Rs1.8 crore on two projects to develop an auto-pilot system indigenously bore no fruit as the projects were pre-closed as NAL was not in a position to provide all the necessary data. It said that an ''injudicious'' procurement of engines lead to an avoidable expenditure of Rs1.34 crore. These points were in addition to the Rs80-lakh purchase of 28 seats that was referred to as above.

The CAG also rapped the NAL for not having any mechanism to monitor the performance of aircraft supplied by it for possible improvement of design for subsequent aircrafts. It referred to the Hansa programme when saying that one aircraft delivered to Andhra Pradesh Flying Club met with an accident, and another operated by the Centre for Air Borne System had a forced landing when its propeller got detached. The CAG said that NAL did not have any documentary proof that an investigation was conducted on the mishaps either by the DGCA or by itself.

Moreover, CAG said around seven engines valued at Rs64 lakh and five propellers worth Rs11 lakh were lying unused as NAL did not have any orders for the production of aircraft beyond the 10 originally ordered. It said that NAL incurred an average manufacturing cost of Rs43.3 lakh per aircraft, against the original estimate of Rs5 lakh, and that this cost did not count in expenditures on manpower and overheads.

CAG's audit covered NAL's performance during the period 2002-07. It also revealed the during this time, while 48 scientists resigned and 66 retired, NAL was not able to fill the talent gap adequately. It also said that against the target of filing 100 foreign patents in five years, NAL only filed nine.

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CAG asks NAL to forget about 70-seater aircraft