I don't think the 5 billion is for the fighters itself(u could get 80 F-15Es+ their weaponry for that).The report as u urself might have seen ,is pretty ambigious on the specifics.It says airfield equipment etc,so I think they are improving their logistical capabilities,which is not exactly cheap.
Did you mean the short range of the earlier Mig-29 or it's poor radar system.The Mig-29SMT ,which is the multi-role variant of the Mig-29 has larger internal fuel tanks & besides it can be refuelled in midair.Malaysian & Indian Mig-29s carry new 'Phazatron' radars & have the ability to fire the AA-12 ADDER missile(rated to be analogous to the US AMRAAM)-so that somewhat sorts out the long range capability.Moreover India can integrate it's Mig-29s to the Phalcon AWACS system it is getting from Israel,making it far more potent.About the Mig-29s that Poland is getting, I think the Germans did a lot of modifying themselves.The Poles can team up with the Israelis to enable it to launch the Python-4 or Derby AAMs or integrate the AMRAAM itself.
"I don't think the 5 billion is for the fighters itself..."
Yes, but 48 F-16C/D block 50/52 for Poland cost $3.8 billion and It also contain missiles, airfield equipment etc and even pilot training.