IAF seeks direct control of HAL to stem eroding combat-edge

[Rahul Singh]

My concern is limited to their willingness to do critical R&D on their own. And they will have do it and prove it by developing critical subsystems on their own before they can dream of large orders. But instead of it, what our Industry is doing, is helping foreign vendors to sell their products masked as Indian. Lets take the case of SAMTEL. They are trying to sell various HMDS and HUD to HAL as indigenous but the fact is their HMDS and HUDs are Thales design. Now what will happen if HAL places order with SAMTEL rejecting BEL which manufactures DRDO designed HUD and MFDs? Won't we fool ourselves and waste huge amount of tax payer's money?

Point i am making is, as of today our private companies are not reliable enough so that government can sell DPSUs like HAL to them. They will have to first prove their capability. L&T had proven some capability that is why it is one of contender for Navy's second line of SSKs. But the same organization failed to prove itself in aviation and that is why IAF selected HAL over L&T for manufacturing SARAS. Now Mahindra aerospace is doing some serious work in aerospace - it is developing NM-5 with NAL - so i am expecting some change in IAF's attitude. Since project Saras has got delayed IAF might reconsider and grant manufacturing rights to Mahindra.

For encouraging private participation MoD is already inviting them to bid for various tenders. FICV and Rustan-H are two such project where an Indian private firm could become leader. But again everything will boil down to their ability, capability and above all their willingness to shove their own money in R&D.

Transition is a slow process and can not hurried discarding fear of negative consequences. India is very willing to offload substantial amount of defence R&D and production to private sector but it can't be done over night. Not to mention our private companies are still in nascent stage and will take time get mature.

 

[Godless-Kafir]

They will run it better but in what direction? So far i have yet to see a private company keenly interested in serious R&D. All i have seen, is long tongue twisting hard for feast out of manufacturing (DRDO developed tech) or 100% government funded R&D. We should wait little more before we can depend on our private companies for solution to all problems.

Rahul in what direction a capitalistic business should run? When small countries like Taiwan, France, south Korea make weapons and churn out an annual sale of over 10billion on exports. We cant even make stuff for our defense forces in time. This requires an drastic step to make it more profitable and run the R&D on sales profit rather than hand out from the government that only drain the economy.

 

[Rahul Singh]

Rahul in what direction a capitalistic business should run? When small countries like Taiwan, France, south Korea make weapons and churn out an annual sale of over 10billion on exports. We cant even make stuff for our defense forces in time. This requires an drastic step to make it more profitable and run the R&D on sales profit rather than hand out from the government that only drain the economy.

Towards profit. And manufacturing a product without getting involved in designing and development hikes the graph to Himalayan heights. Why do you think a profit driven private HAL will ever attempt R&D and waste money when it can make bloody big bucks by simply becoming a manufacturing house for Indian forces and hub for aerospace outsourcing. When we talk about private companies in defence sector, we should keep in mind that they are still nascent and service requirement is bloody huge, unlike that in smaller national you mentioned. It will take time to offload burden but i don't feel it will ever be more that 50%. We don't need private companies which(their lobbyist) will force nation to war simply to sell more and earn more. For us its better to have Public-Private Partnership not P/PP.

 

[Archer]

Guys, its not like HAL does no R&D - they recently (a year back) set up a strategic avionics BU, which is dedicated to avionics systems R&D. Also, they sponsor R&D projects at educational institutes, work with DRDO etc. They also did a lot of pioneering work regarding the ALH and continue to invest in it. Problem is HAL is not able to meet deadlines with its primary customer - the IAF and also ends up taking whimsical decisions (prioritizing the IJT over the LCA). The IAF feels that by putting Matheswaran ( a very tough taskmaster ex ASTE head) in charge, things will change. I hope so, but then again, it could be that it will turn out to be symbolic. Many believe that IAFs direct involvement with HAL was a plus. Lets see. Ultimate aim should be not to think in terms of IAF win or HAL loss but everybody wins. Not that you needed me to say this, but frankly, if putting Matheswaran in charge improves HAL execution, we are all winners.

 

[Rahul Singh]

If IAF's concern is their order then for that they should permanently station a detachment in HAL and control much of their activity regarding production of their stuff. But asking for complete takeover is outrageous and will surely offend rest two. Needless to say Navy and Army are not so minor customers of HAL and will not keep quite. Bit off topic. It is interesting to see, ACM at one side showing wish to takeover HAL but at other side says "Joint Chief Staff not needed". Wonder if there is race to get control over majority?

 

[Archer]

If IAF's concern is their order then for that they should permanently station a detachment in HAL and control much of their activity regarding production of their stuff. But asking for complete takeover is outrageous and will surely offend rest two. Needless to say Navy and Army are not so minor customers of HAL and will not keep quite. Bit off topic. It is interesting to see, ACM at one side showing wish to takeover HAL but at other side says "Joint Chief Staff not needed". Wonder if there is race to get control over majority?

Thing is they feel even stationing a detachment will not ensure that their views get prominence. Army and Navy probably won't object to IAF controlling HAL as long as ALH and LCH orderbooks execution is not biased to IAF benefit. Navy, is getting Do228s from HAL plus has some other projects, plus assistance for maintaining its older Alouettes.
Biggest resistance to IAF proposal will probably be from HAL lobby itself.
Coming to CDS, IAF feels IA will treat it as flying artillery and subservient to IA (not a boundless fear) and hence fear CDS becoming a IA preserve. Actually there should be an Aerospace commission in India monitoring and ensuring HAL and other DPSUs execute, ensuring no overlap in requirements between IAF, IA, IN in procurement, setting up a common technology research pool etc. But MOD is pretty lackadaisical and everyone runs their own fiefdom. Of the DPSU and PSUs, HAL, BEL, ECIL, Keltron (now) are the better ones. But all said and done, they are not perfect and heavily reliant on DRDO for R&D and could do better (especially HAL given its resources) when freed from bureaucratic interference. I agree with you Rahul that merely being from the services does not ensure success. The Naval shipyards and BDL are run by ex IA, IN people as well. The shipyards have delays dime a dozen in many projects. The systemic, bureaucracy and procurement challenges are the real challenge, not just replacing one or two people at the top.

 

[Zebra]

Towards profit. And manufacturing a product without getting involved in designing and development hikes the graph to Himalayan heights. Why do you think a profit driven private HAL will ever attempt R&D and waste money when it can make bloody big bucks by simply becoming a manufacturing house for Indian forces and hub for aerospace outsourcing. When we talk about private companies in defence sector, we should keep in mind that they are still nascent and service requirement is bloody huge, unlike that in smaller national you mentioned. It will take time to offload burden but i don't feel it will ever be more that 50%. We don't need private companies which(their lobbyist) will force nation to war simply to sell more and earn more. For us its better to have Public-Private Partnership not P/PP.

*****
I think government should allow private companies to develop , make and sell all type of defence products, tanks, a/cs, subs, war ships what ever they like .
There is no need for Indian government to buy them , if they like it , fine ,GOI can buy it . If do not like it no matter . Let some friendly country buy it , if they like it .
All the R&D cost that company ( who develop and make) have to manage by them selves , no Indian government funds for R&D .

 

[ace009]

They should sell 50% of its stake to a Private company like Mahindra or TATA! They will run it better and GOI can add to the funding bit.

Instead of selling 50% stake to A private company, GOI should do an IPO of HAL with a cap of 20% stake for any ONE company in the shares. That way any one private company cannot take a controlling share and derail the development of a GOI project. However, with 50% share in private hands, the GOI or DRDO or HAL cannot sit on their fat asses and not finish the allotted projects. This is called a PPP - a private public partnership.

 

[ace009]

My concern is limited to their willingness to do critical R&D on their own. And they will have do it and prove it by developing critical subsystems on their own before they can dream of large orders. But instead of it, what our Industry is doing, is helping foreign vendors to sell their products masked as Indian. Lets take the case of SAMTEL. They are trying to sell various HMDS and HUD to HAL as indigenous but the fact is their HMDS and HUDs are Thales design. Now what will happen if HAL places order with SAMTEL rejecting BEL which manufactures DRDO designed HUD and MFDs? Won't we fool ourselves and waste huge amount of tax payer's money?

Point i am making is, as of today our private companies are not reliable enough so that government can sell DPSUs like HAL to them. They will have to first prove their capability. L&T had proven some capability that is why it is one of contender for Navy's second line of SSKs. But the same organization failed to prove itself in aviation and that is why IAF selected HAL over L&T for manufacturing SARAS. Now Mahindra aerospace is doing some serious work in aerospace - it is developing NM-5 with NAL - so i am expecting some change in IAF's attitude. Since project Saras has got delayed IAF might reconsider and grant manufacturing rights to Mahindra.

For encouraging private participation MoD is already inviting them to bid for various tenders. FICV and Rustan-H are two such project where an Indian private firm could become leader. But again everything will boil down to their ability, capability and above all their willingness to shove their own money in R&D.

Transition is a slow process and can not hurried discarding fear of negative consequences. India is very willing to offload substantial amount of defence R&D and production to private sector but it can't be done over night. Not to mention our private companies are still in nascent stage and will take time get mature.

It is a pity that private companies in India do so little R&D. It is a cultural issue. Part of it is due to the fact that intellectual property was not protected in India and anyone can copy/ steal your design/ inventions. Part of it is due to the long queue for court cases - it takes too long to get justice if you sue someone for IP theft, by which time the IP is worthless. Part of it also due to the fact that the system is so corrupt that larger companies will always bribe/ muscle out smaller players, so no one does anything.
Now that IP laws are a little stronger (not withstanding the objections from the left, who would like everyone to be poor and sucking on foreign technology teats), GOI should setup special courts for IP conflict issues. They should also make sure that small companies are protected for their IP.
Once these are in place, then it will take another 10-15 years for some actual innovative R&D to happen. Then another 10-15 years before we see some of that in actual action - whether in the military or in the civilian areas.

 

[Tshering22]

I hope they can fast track this decision. I am sure that IAF has enough clout and political might to pressure the GOI to get the HAL under their wing through political pressure. ACM Naik had a way to put pressure on the dynastic GOI when we saw him directly interact with people, even invoking the irritation of the UPA top brass for the IAF chief being "too interactive with the public".

Hope Naik is able to force this last one before he leaves. I like the way he thinks.

 

[nitesh]

here it comes:

IAF officers likely to head HAL, DGCA - DNA - English News & Features - India - 3dsyndication.com