Dismay and debate is not just about the perceived arbitrary hike in cost, but encompass the larger spectrum of business ethics. Here, the Russians are certainly foundwanting in living up to promises.

The Russians have done it yet again. In the line of fire this time around is the contract on the supply andsubsequent licenced production of AL-55I engine at Hindustan Aeronautics Limited (HAL) in Koraput for India’s Intermediate Jet Trainer (IJT) programme. Russian engine manufacturer NPO Saturn, maker of the AL-55I, has claimed that it has spent more time and money on developing the engine than it had bargained for, and that manufacturingtechnology will only be transferred to India if HAL pays it an extra $64 million (Rs 277 crore), over and above the contracted amount. In 2005, NPO Saturn had pipped French engine maker Snecma to the $350 million (Rs 1,515 crore) contract to design the AL-55I engine and transfer technology to India.

Dismayed, HAL’s design chief reportedly made a dash to Moscow to persuade NPO Saturn to reconsider its demands; highly unlikely, though, that the Russians would budge from their stand. Russia’s Ambassador to India Vyacheslav Trubnikov acknowledges that the company has asked for more money but makes light of the whole episode, saying, I don’t think the question is extraordinary. Both sides are engaged in the fixing of the price. Discussions are in progress to determine how many engines India will be allowed to manufacture. Considering the surfeit of ongoing defence deals with Moscow, worth a whopping $15 billion (Rs 60,000 crore) or more, the additional charges demanded by the Russians may not amount to much. What, however, is extremely disconcerting is the increasing inclination displayed by the Russians to alter and revise the original, signed and sealed firm contracts at their own discretion—that, too, midstream, leaving the Indians with little but a Hobson’s Choice.