Ministry of Finance is said to have already made an allocation of a $750 million (approximately Rs 7.5 billion) special development package for Pakistan army which will jack up the current defence budget from Rs700. 2 billion to Rs 707.7 billion. Four Russian, made Mi-35 Assault Helicopters and other military equipment would also be purchased out of special development package. A summary in this regard has been placed before National Security Council (NSC).
According to sources, the commitment towards allocation of funds under a special development package to army was initially issued on November 2014 with the condition that disbursement for military will be provided after fulfilment of certain conditions.
These conditions included nature of equipment, supplier countries and its cost. Finance Division and Economic Affairs Division and the army would together negotiate financing arrangements with the relevant countries and financial institutions etc The down payment for such procurements shall be accepted to be the minimum but not more than 10 percent of $750 million.
According to details, Finance Minister Ishaq Dar and Chief of Army Staff (CoAS) General Raheel Sharif held a meeting on February 26, 2015. Finance Minister urged that the expenditure for procurement of 4 Mi-35 Assault Helicopter may be met by Pakistan Army out of the special development package.
Russia approved a deal for Moscow to sell a batch of Mil Mi-35 ''Hind E'' heavy attack helicopters to Pakistan, Russia''s ambassador told Radio Pakistan on November 12, 2014. This is a big breakthrough for Pakistan as Russia has decided to ignore India''s pressure and proceed with this deal with Pakistan.
Pakistan was previously discouraged from securing any major defence contracts with Russia due to Indian objections. Sources said that Russia has realised that Pakistan genuinely needs this equipment for a very legitimate reason. At present, the Pakistan Army is relying in part on Mil Mi-17 ''Hip'' helicopters in its military campaign against the Taliban in the North Waziristan region.
Analysts said the Pakistan Army, which is the defence forces'' main helicopter operator, has chosen the Mi-35 because of previous satisfaction with Russian helicopters notably the Mi-17. "Our helicopter pilots are very comfortable with Russian helicopters. We have chosen the Mi-35 based on our prior experience with Russian helicopters, which have been in use since 1969" said Brigadier Syed Masud-ul-Hassan (Retd). In addition, the JF-17 ''Thunder'' fighter, which is co-produced by the Pakistan Air Force and China''s Chengdu Aviation Corporation, is powered by the Russian-manufactured RD-93 engines.
It has also been reported that the State Department approved a possible foreign military sale to Pakistan for helicopters and associated equipment, parts and support at an estimated cost of $952 million. This proposed sale of helicopters and weapon systems will provide Pakistan with military capabilities in support of its counter-terrorism and counter-insurgency operations.