Is HAL inefficient? Should Govt. split it?

[Mad Indian]

Manihar parrikar has said that Su30MKi costs rs 358 crore to IAF

which means it is available to IAF at Rs 358 crores

which means it is selling price of HAL & buying price of IAF

which includes all

mfg costs + taxes + licensce fees + profits of HAL

Yes, that's why the official claimed that they need extra man hours which causes huge cost escalation. Keep peddling.

 

[PaliwalWarrior]

pmaitra even in the case of buying Russian made a large portion can enter Indian Economy as Russia will be bound to re invest a major portion in India.
so if that's the case then we are at loss in building it here.
Even today a few major components are imported from Russia (Read somewhere recently).

It is still not 100% manufactured in India...
Is it?

the deal with russia for Su30MKI was signed at a time when offsets requirements were not a part of DPP

so for Su30MKI there are no offsets

what localisation / indigenisation you see is the result of contracted levels not offsets

THE ABOVE IS MY OPINION

 

[Sakal Gharelu Ustad]

Yes, that's why the official claimed that they need extra man hours which causes huge cost escalation. Keep peddling.

You can take any meaning out of what Parrikar said. It includes all:

mfg costs + taxes + licensce fees + profits of HAL+ profits of DRDO + profits of DFI + bribe to IAF + bribe to Russians + ..........

 

[Mad Indian]

You can take any meaning out of what Parrikar said. It includes all:

mfg costs + taxes + licensce fees + profits of HAL+ profits of DRDO + profits of DFI + bribe to IAF + bribe to Russians + ..........

You forgot to include the cost escalation due to keeping the head inside the ass for justifying this bull shit.

 

[Yumdoot]

But for the above comparison you need to deduct taxes on Russian side. Then Russian manufactured Su-30MKI would cost 150 crores instead of 240crores excluding taxes. When you deduct taxes- deduct them on both sides. When you compare final price- include taxes on both sides.

Now again compare with the cost quoted by HAL. It will remain around 50% or more in both cases.

Excellent.

Now what about production levels and learning curves.

HAL cannot do much better because the holy defense budget is hogged by a few who want to continue their fiefdom.

Russian make 100 self designed jets an year and HAL makes 16.

 

[Sakal Gharelu Ustad]

Excellent.

Now what about production levels and learning curves.

HAL cannot do much better because the holy defense budget is hogged by a few who want to continue their fiefdom.

Russian make 100 self designed jets an year and HAL makes 16.

Question is why give certificate of excellence to HAL while blaming those few. Fact of the matter is that HAL is sheer incompetent and GoI should bifurcate it and sell it two private firms like Reliance and Tata and let them compete over the next orders.

 

[Mad Indian]

Now what about production levels and learning curves

Excellent logic. By using the same logic, no new production /manufacturing/industrial plants should come to India because of the learning curve, in the form of FDI, as it would make them lose their profits due to learning curve and production capacity.


Oh wait, they do because Indian private sector in which they are investing in are not a bunch of corrupt incompetent pieces of shit like Hal

 

[PaliwalWarrior]

Excellent logic. By using the same logic, no new production /manufacturing/industrial plants should come to India because of the learning curve, in the form of FDI, as it would make them lose their profits.


Oh wait, they do because Indian private sector in which they are investing in are not a bunch of corrupt incompetent pieces of shit like Hal

reliance is involved in scams in each and every deal in the sector it operates in

eg
Oil & gas
pertochem
Telecom
Power

 

[Mad Indian]

reliance is involved in scams in each and every deal in the sector it operates in

eg
Oil & gas
pertochem
Telecom
Power

Still, people are investing in because they are "competent". Hal , not by a long shot

I wont care about Hal even if it was corrupt but was not screwing with Indian security. But I can't tolerate it being whiter than snow screwing with Indian security. You can justify it all you want but I don't get my bread and butter from it and as such have no reason to not treat it as the incompetent corrupt pos it actually is

 

[Yumdoot]

Question is why give certificate of excellence to HAL while blaming those few. Fact of the matter is that HAL is sheer incompetent and GoI should bifurcate it and sell it two private firms like Reliance and Tata and let them compete over the next orders.

The productlines that HAL operates are by themselves no less challenging compared to others in the world. Launch Vehicles at rates that would put most countries to shame.
Help with the prototypes of aircrafts, Helos, UAVs of several different kinds.
Actual production management.
Some designing.
One of the biggest overhauling operations in the world for both Aircrafts and Engines.

For a 20k crore business that is quite a bit of variation in efforts.

HAL is like a big overgrown baby. Should have been divided into several different divisions. IAF has turned HAL into an impossible to manage Super-BRD-cum-Lab-cum-Production house.

Politicos were mostly just as inept and vested.

 

[Sakal Gharelu Ustad]

The productlines that HAL operates are by themselves no less challenging compared to others in the world. Launch Vehicles at rates that would put most countries to shame.
Help with the prototypes of aircrafts, Helos, UAVs of several different kinds.
Actual production management.
Some designing.
One of the biggest overhauling operations in the world for both Aircrafts and Engines.

For a 20k crore business that is quite a bit of variation in efforts.

HAL is like a big overgrown baby. Should have been divided into several different divisions. IAF has turned HAL into an impossible to manage Super-BRD-cum-Lab-cum-Production house.

Politicos were mostly just as inept and vested.

So you now agree that HAL is incompetent POS and should be dismantled!

 

[Mad Indian]

HAL is like a big overgrown baby. Should have been divided into several different divisions. IAF has turned HAL into an impossible to manage Super-BRD-cum-Lab-cum-Production house.

Yes, it was Iaf which has no jurisdiction over Hal, which turned it into an incompetent junk .

You guys are awesome. Keep peddling

 

[Yumdoot]

reliance is involved in scams in each and every deal in the sector it operates in

eg
Oil & gas
pertochem
Telecom
Power

So is every other corporate. So are nearly all citizens of India .

But how does corruption figure in this.

So you now agree that HAL is incompetent POS and should be dismantled!

Look at it like this. If HAL is incompetent despite so much going for it then multi-furcating HAL would only yield more incompetent units.

My take is that there are more than enough pockets of good work over there. But there is not enough focus on things that should have mattered. The helo division if allowed to grow would have been able to strike real partnerships with the French and we could have avoided the stupid helo decision for Chinooks and Apaches. Now merely because the aircrafts making division thinks it should be allowed monopoly on MMRCA, the french keep coming up with crazy speculative discounts/addons. But this in no way addresses the inherent competence in the Helo division.

This does not mean that the aircrafts making side of the business is not good enough. Aircrafts making itself is bound by the overall lopsided development cycles that are a net result of the merry-go-round that IAF indulges in. OTOH at one time even the helo division was not looked at with favour like when the ALH was refusing to fly. Who knows with the Sitara and LCA, the aircrafts division may itself begin to show signs of good health bogged down by the 'advisors' for the aircrafts division.

Rockets division is another area of great potential and skills.

The autoclaves and OOA are another.

But this can happen only when we recognize that there are islands of good stuff messed up in internal discoordination.

My guess is we must rid HAL of the IAF people at higher levels. Offer VRS to people not good enough. Multi-furcate the HAL and find an appropriate business model for all the divisions so separated.

 

[Pulkit]

the deal with russia for Su30MKI was signed at a time when offsets requirements were not a part of DPP

so for Su30MKI there are no offsets

what localisation / indigenisation you see is the result of contracted levels not offsets

THE ABOVE IS MY OPINION

I am not a defence expert butI remember at the time of Su MKI was planned Offset was there . As i had heard then that Russians will need to set up factory here to produce few parts and a share of money has to be invested back in India... Will further dig into it.

 

[Pulkit]

Yeah keep giving you excuses for that pathetic pos called hal . that's how you improve that pos organisation- by giving excuses.

I need not do that as, i have not been fan of HAL ever.
They are lazy and incompetent bunch of people,

My point was different ... Excesses man power hours cannot be the only reason for 100% rise.

 

[Pulkit]

The Russian Sukhoi-30 is different from the Indian Sukhoi-30MKI. The Indian one has advanced avionics, Indian, French, and Israeli components.

We are not comparing identical airplanes.

i am very well aware of that...

but here what i assumed was the estimated or app cost of manufacturing su 30 MKI in Russia and in India.

 

[pmaitra]

CAG can only point out the problem if there is some corruption. CAG has no clue on efficiency or what some other efficient company could do to produce it cheap.

Not only CAG, many people have no clue what they are talking about.

Rs. 440 cr - Rs. 227 cr = Rs. 213 cr. What is it for? Does man-hour alone justify this? Or is this extra cost due to man-hours and components?

We are comparing Sukhoi-30MKI with Sukhoi-30. The former has front canards, but the latter does not. The former has Indian, French and Israeli components. The latter does not. The former has economy of scale. The latter does not. But hey, let's pretend these difference contribute to zero cost escalation and blame HAL for the entire cost escalation.

What I am saying is:
- There should be significant component difference to cause the above price difference. And it should be of the order such that it overcompensates for cheap labor and production costs in India, which would ideally make Su-30 cheaper than 227 crore to manufacture in India.

If you have any reference on how component costs can over-inflate HAL's production cost, please share.

I have no reference to anything, not even to the original numbers that @Mad Indian offered, that we are assuming to be true. Let @Mad Indian present what exact planes he is comparing, and the sources of his cost, and when the costs were evaluated; then we can talk. Till then, everything is "probably."

Had it been Rs. 1000 cr vs. Rs. 227 cr (the strawman number you came up with), my response would have been different. That is not the case. The case is Rs. 440 cr vs Rs. 227 cr.

spoken like a true leftist. Yeah believe that if that makes you feel better.

But reality is different . There is a reason all mainstream economists encourage free trade and not mercantilism

"leftist"
"mainstream economist"
"free trade"
Wow!

Typical no-content-plentiful-verbiage post.

Quote me when you have something useful to offer. Spare me your nonsensical rants.

Question is why give certificate of excellence to HAL while blaming those few. Fact of the matter is that HAL is sheer incompetent and GoI should bifurcate it and sell it two private firms like Reliance and Tata and let them compete over the next orders.

Claiming something to be a fact does not turn it into fact. What evidence have you presented to back up your claim that HAL is incompetent? Or is it based upon gut feelings alone?

And why sell HAL? Let Tata and Reliance come up with their own plants and R&D labs. Are they competent enough to do that?

Heck, let Tata build a completely indigenous diesel engine first.

 

[Mad Indian]

@Sakal Gharelu Ustad apparantly, manufacturing over 150 planes is not enough for the economics of scale.

Oh lets also complain that Tata has not produced anything worthwhile, while forgetting that companies like Tata were never allowed to do anything worthwhile due to the socialist morons' license raj till 1991. #Morons

 

[Yumdoot]

Not only CAG, many people have no clue what they are talking about.

Rs. 440 cr - Rs. 227 cr = Rs. 213 cr. What is it for? Does man-hour alone justify this? Or is this extra cost due to man-hours and components?

We are comparing Sukhoi-30MKI with Sukhoi-30. The former has front canards, but the latter does not. The former has Indian, French and Israeli components. The latter does not. The former has economy of scale. The latter does not. But hey, let's pretend these difference contribute to zero cost escalation and blame HAL for the entire cost escalation.

I have no reference to anything, not even to the original numbers that @Mad Indian offered, that we are assuming to be true. Let @Mad Indian present what exact planes he is comparing, and the sources of his cost, and when the costs were evaluated; then we can talk. Till then, everything is "probably."

@Mad Indian can you repost that source link. I also do not have that info.

The difference in cost is to my view is quite believable but I am sure it has nearly nothing to do with HAL's competency levels.

I won't be surprised if its some cost comparison put out by our current CAG (who earlier was the defence secretary and appointed to CAG by UPA govt.).

Indian Situation:
1) See we imported a finished product alongwith the line that made it. The agreement at the time would obviously have need definition to be able to make the Russians responsible for their part of the deal. That is obviously possible if we remain with a well defined product. So today we are making a 10 year old plane with 10 year old production layout and supply chain; and

2) yet paying 2/3 times the cost on some western avionics. Russians did not stick that on to us. At that time Russians were content with their own lesser developed avionics. They persisted with their version of Russian-Swadeshi and today the Russians produce like avionics at probably 1/2 the price. Ours were nearly all imports and western supplier are not going to transfer their learning curve benefits to us. Why would the westerner transfer these benefits? If the Indians of yore were suckers then it is neither the headache of the Russians nor of the Westerners.

3) Greenmail by IAF.

4) Platform centric military thought. Platforms do not evolve as fast while the payloads are evolving at a much faster pace.


Russian case is entirely different:
1) For them the Su-30 was an organic growth of the Su-27. Well depreciated plants. This in fact allowed them churn out many different variants of Su-27 at very little cost differentials, despite the fact that there were major differences in each of the later variants.

2) Experienced engineers. Continuous and evolving R&D resulting in LRUs that keep evolving into the most cost-effective systems.

3) Suppliers that had the benefit of 8/10 times the order quantity who would then be willing to take the risks of what their R&D engineers say.

4) Sukhoi IPR was sold to the Chinese and Indians too and a lot of cash must have flowed in from both sources.

5) Payload centric thought instead of platform centric thought. The platforms all evolved from the same vintage idea. Then they tweeked things to make that one vintage thought carry several different variants.


In fact if anything, this purported price difference would constitute a great indictment of the import-pasand culture of Kala-angrez types in India.

 

[tejas warrior]

As per wiki, it cost 358 Cr. (much less than 440 Cr.)
https://en.wikipedia.org/wiki/Sukhoi_Su-30MKI

As per OLD link of India Today, 350+Cr.
http://indiatoday.intoday.in/story/...re-than-ones-bought-from-russia/1/223960.html

However, we must also understand this package includes what All ? Only Fighters OR missiles+maintenance equipment.

Regards,
Ashish