The Comptroller and Auditor General (CAG) also pulled up the aerospace PSU for incurring a loss of Rs 52 crore in supplying Advanced Light Helicopters to Ecuador by selling them at less than their prime cost.
"The project suffered at every stage of its execution. While the planning went awry with indecisiveness about the weight, thrust and life of the engine at design stage itself, taking up production without Initial Operational Clearance did not serve the purpose of the IAF which had projected requirement for the aircraft way back in 1999," the report said.
"The project slipped the target date of July 2004 by almost a decade and target for completion was reset to December 2013 by HAL, for which the Defence Ministry approval is still awaited," it said.
The Government auditor said Defence Ministry had also released Rs 3074 crore towards the project but the sole aerospace PSU in the country could spend only Rs 167 crore leaving 95 per cent of the funds unutilised.
The CAG also pulled up the HAL for its inability to produce an indigenous engine for the Advanced Light Helicopter resulting in delay in induction of Dhruv choppers in armed forces and avoidable expenditure of Rs 204 crore to the firm.