IAF Demand for 250 Tejas MK2

Discussion in 'Indian Air Force' started by Kunal Biswas, Oct 5, 2014.

  1. Kunal Biswas

    Kunal Biswas Member of the Year 2011 Moderator

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    India Offers To Spend $12B To Break Monopoly

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    NEW DELHI — The Indian government, acting on Air Force demands, has offered to spend $12 billion to encourage private firms to establish an aircraft manufacturing facility — a move that would break Hindustan Aeronautics Limited’s monopoly on aircraft manufacturing after years of delays on several projects.

    Specifically, the Indian government has offered an advance order for the homemade light combat aircraft (LCA) Mark-2, a Defence Ministry source said.

    The offer was conveyed to senior private sector executives during several meetings with MoD officials in the last month, the source said. India’s private defense majors, Tata Group, Mahindra & Mahindra and Larsen and Toubro, are the most capable of setting up an additional military aircraft plant, either independently or in partnership with overseas firms.

    Madhukar Vinayak Kotwal, president, Heavy Engineering of Larsen & Toubro, said, “Since this [building of an additional facility] is a matter currently under discussion at various levels in the government as well as in industry associations, we would like to refrain from giving any comments at this stage.”

    The LCA, developed by Bangalore-based Aeronautical Development Agency (ADA), a laboratory of the Defence Research and Development Organisation (DRDO). The first order for 40 of the Mark-1 version of the aircraft has been given to state-owned Hindustan Aeronautics Ltd. (HAL). The final operational clearance is expected to be granted in 2015, after which the aircraft can go into production.

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    The Indian Air Force has a future requirement for only the next-generation LCA Mark-2, which would be powered by the higher thrust General Electric GE-414 engine. But the aircraft is still in the development stage and is not expected to be ready for production before 2017-18. The Air Force has a requirement for 250 LCA Mark-2s, which the government estimates would be covered by the $12 billion advance order.

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    The Air Force has demanded establishment of an additional aircraft facility to break the monopoly of HAL, India’s sole military aircraft manufacturer, and has complained of delays in delivery of aircraft.

    “It is absolutely essential to set up an additional military aircraft facility here, as HAL is overloaded for the next 10 years and has become too unwieldy,” defense acquisition expert Miral Suman said.

    Vivek Rae, former director general (acquisition) in the MoD, said, “India sorely needs aircraft manufacturing capability in the private sector. We cannot afford to put all eggs in the HAL basket.”

    Subhash Bhojwani, retired Air Force air marshal, agreed an additional manufacturing facility is needed, but said HAL should be made more commercial.

    “HAL is into the design and contemporary manufacture of fighters, transports, trainers and helicopters, as well as avionics and engines,” he said. “It is possibly the only company in the world to be so diversified. However, while this may sound good in a book of world records, it isn’t good as a commercial model.”

    Defense analyst Amit Cowshish, a retired Defence Ministry bureaucrat, said the objective should be “not to create an entity that could compete with HAL but to have additional capability in India to manufacture aircraft so that the requirement, both of the military and civil sectors, could be met in a more cost-effective manner and in shorter time frames. Of course, competition would help in improving HAL’s efficiency.”

    India’s private sector is able to set up such a facility, and could acquire the capability to build the LCA Mark-2 over time, but it could be a challenge, Cowshish said.

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    “LCA is a program & HAL and DRDO have worked hard on it, and the final operational clearance is expected sometime later this year,” he said. “To bring in a new manufacturing agency at this stage may not be a very good idea. Though it is possible to pass on the technology to the private industry for manufacturing the aircraft, selecting such an agency may turn out to be a [technically] tricky affair.”

    Defense analyst Rahul Bhonsle said, “Setting up a new military aircraft facility is no doubt a Herculean task. But the new facility will be looking primarily at system integration.”


    Source : India Offers To Spend $12B To Break Monopoly | Defense News | defensenews.com
     
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  3. Kunal Biswas

    Kunal Biswas Member of the Year 2011 Moderator

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    Related News from Past >>

    IAF is planning to operate 14 sqadron of Tejas of both MK1 & 2 >>

    Source : IAF will buy 14 Tejas squadrons, lowering costs | Business Standard News
     
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  4. sgarg

    sgarg Senior Member Senior Member

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    I am in favour of another assembly line to be set up by private sector. The most likely is Mahindras who have excellent manufacturing plants and a deep understanding of defence needs.
     
  5. Twinblade

    Twinblade Senior Member Senior Member

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    There is no pvt sector company in India that can match the contributions made by TASL and L&T and their expertise, both long term subcontractors of HAL and DRDO. TASL already has a fairly modern plant that makes aero components already.
     
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  6. Kunal Biswas

    Kunal Biswas Member of the Year 2011 Moderator

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    That would be time consuming, And in India there are countless head willing to flip such programs at any given chance ..

    It would be more interesting If Tejas MK3 a stealthy design approach given to Pvt firms as you have suggested ..

     
  7. PaliwalWarrior

    PaliwalWarrior Regular Member

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    why should the fruits of years of labour of ADA / HAL be given away to pvt cos

    what do they bring on table ?

    whyis the IAF which was not ready to induct tejas just 2 years ago now pressing for pvt mfg line ?

    ff it was not for the IN the IAF had almost killed the LCA project

    No

    The LCA MK2 should go to HAL only
     
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  8. power_monger

    power_monger Regular Member

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    Even i dont agree with Pvt companies getting a production line.Even if it gets it should pay a royalty amount to HAL.
    Pvt companies should pour money for Designing of MK2.Somehow this move is like rewarding pvt companies witout any real effort from pvt companies gives wrong instructions to Public sector companies that government does not really trust them..
     
  9. Dhairya Yadav

    Dhairya Yadav Regular Member

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    Awesome step! By the way, does anyone have any idea when Tejas Mk3 will fly ?
    If its around 2024 or later, I suspect it would lose its relevance to AMCA...
     
  10. sgarg

    sgarg Senior Member Senior Member

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    LCA Tejas is a DRDO project. HAL is only a production agency. HAL gets paid for the work it does just like any private company would.

    The designer of LCA Tejas is ADA and this agency can license the design to a private company if the government wishes.

    There is no question of paying royalty to HAL.

    Even if a private company is roped in, that company would be a production agency or a contractor hired by GOI. The contractor will get paid for its work. It is not like this private company can sell Tejas in market. It is purely a contractor arrangement on behalf of GOI.
     
  11. sgarg

    sgarg Senior Member Senior Member

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    Please check out the website of Mahindra Aerospace. They have built a factory at Kolar for aircraft manufacturing. Though this factory is for a different type of plane, having a factory is better than building a new one.

    Yes Tatas are also very good candidates.
     
  12. Zebra

    Zebra Senior Member Senior Member

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    In other words the ADA will provide all the designs to that private company / production agency / contractor and they will build / make new Tejas as per the designs.

    And HAL has nothing to do with it.

    Yeah..?
     
  13. PaliwalWarrior

    PaliwalWarrior Regular Member

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    i have a new serious conspiracy theory

    Guys

    gguess what if i share my ture thoughts you wont like it

    this is just another way of routing of bribes from domestic indegenous products

    Earlier the politicos and IAF top brass were taking bribes and kickbacks in imported products

    it is open secret they are involved in so many scandals

    now with advent or sucess of domestic products first they tried to kill the domestic products but they couldnt do it and for long people have said that indian products dont get orders because

    HAL?DRDO/ADA/CVRDE? etc dont offer bribes / cant offer bribes no way to route the bribes and money

    so now guess what

    DRDO/ADA/NAL/ HAL will develop tech and practices will take pains andiron out all difficulties then it will be transfererd to pvt cos

    where the pvt cos will jack up costs - from which they will make profits and they will pass on bribes and kickbacks to IAF top brass and politiocs
     
  14. Zebra

    Zebra Senior Member Senior Member

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    :facepalm:

    Sir, either you drink a coffee or pass it to me.

    Seriously.
     
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  15. p2prada

    p2prada Stars and Ambassadors Stars and Ambassadors

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    A second production line for LCA will only serve to increase costs of the aircraft, the mess EF is in. It would be better if HAL builds all the LCAs and future aircraft like AURA is manufactured by a private company. They can start off with aircraft like Rustom, Rustom-H, Rustom-2 and so on to build up experience before being given a contract for AURA. In the meantime, a private line can be setup to manufacture trainers like the PC-7.

    We are still decades away from a KNAAPO/Irkut type setup.
     
  16. Twinblade

    Twinblade Senior Member Senior Member

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    They lost to HAL-BEL combo.
     
  17. sgarg

    sgarg Senior Member Senior Member

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    Even if HAL has something to do with it, situation does not change. HAL can charge for its services.

    If HAL can buy services, it can sell services as well.

    HAL is a contractor appointed by the government. The government is free to appoint another contractor.
     
  18. PaliwalWarrior

    PaliwalWarrior Regular Member

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    66 avro replacement contract reserved for pvt sector as per their demands and what happens

    they give it a miss
     
  19. sgarg

    sgarg Senior Member Senior Member

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    How? The production line cost some 1600 crore.
    Even if another line costs extra 1600 crore, that is money well spent.

    If GOI decides to build Mark II completely with private company, then Tejas facility can be used by IJT Sitara production.

    However best solution is to have two competing lines.

    This is the best way to increase production of the aircraft.

    I think GOI wants to rope in private player to reduce pressure on HAL. HAL simply has too many programs and the management is not able to deal with it causing delays.

    Even Rustom should be built by private companies.

    Just read that Saras was built by Taneja Aerospace as per NAL design.

    So there is already private companies building aircrafts in India.
     
    Last edited: Oct 5, 2014
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  20. sgarg

    sgarg Senior Member Senior Member

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    Avro contract was a dud. Everybody knew that. Fighter is a different cup of tea.

    Anybody who sinks money calculates the benefit as well.
     
  21. sgarg

    sgarg Senior Member Senior Member

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    The Rustom tender:

    "In the Rustom contract, firms need to invest Rs400 crore in prototypes and trials that could take at least a decade, but there was no guarantee of an order from the armed forces once it is completed, said one official at a private firm who did not want to be named or his company to be identified. An HAL official confirmed this.
    “If there is no assurance of an order, why should the private industry come forward and invest? We know it takes time to profit, but at least we don’t want to lose money,” the same company official said."

    So Rustom tender was rigged. The private players are not fools who will risk their capital.
     

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