Taneja Aerospace signs contract to upgrade MiG-29s

Discussion in 'Indian Air Force' started by AVERAGE INDIAN, Nov 28, 2014.

  1. AVERAGE INDIAN

    AVERAGE INDIAN EXORCIST Senior Member

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    Nagpur: Pune-based Taneja Aerospace and Aviation Limited (TAAL) has bagged the contract for life cycle upgradation of MiG-29 fighter aircraft of the Indian Air Force (IAF). TAAL competed with much bigger players like Tatas, L&T and Punj Lloyd among total eight bidders to get this deal worth over Rs 12 crore.

    The deal signed on Wednesday is being dubbed as the first of its kind, because so far only smaller jobs like manufacture of spares or other allied services were outsourced by the IAF. Never before has a private company been involved in retrofitting of an entire aircraft. Till now, this was the sole domain of defence PSU Hindustan Aeronautics Limited (HAL).

    TOI had reported in December last year that seven private players had evinced interest in the aircraft upgrade contract. They had responded to the request for information (RFI) floated by IAF for upgrade of MiG-29s and AN-32. The latter is a transport aircraft while the MiG-29 is known to be among the best air defence planes with the IAF.

    As compared to other bidders, TAAL is not a known name. Currently it has a turnover of Rs 50 crore, but it also has the credit of being maybe the first Indian company to have entirely built an aircraft. In the 1990s, it had made a hobby aircraft meant to be sold to flying clubs. However, the project did not take off. TAAL is currently a Tier-1 supplier to HAL with its aviation unit located at Hossur near Mysore.

    The project is aimed at increasing the life cycle of MiG-29s for a period of another 40 years. IAF will be providing TAAL the spares and components to fitted in the aircraft. The job will be executed at the base repair depot (BRD) at Nashik. The BRDs come under IAF's maintenance command headquartered at Nagpur.

    Talking to TOI after the contract was signed, TAAL CEO NC Agrawal said IAF will provide training for the first two aircraft, after which it aims to finish four MiG-29s every three months. IAF has close to 50 MiG-29s in all. The work will be jointly done by IAF and TAAL. Agrawal said, considering the size of the job, the company plans to hire experienced manpower from IAF and HAL.

    "The size of the contract may not be much, but TAAL finds that it will help the company go a long way. Even for us, it will be treading a new path with all its risks. However, it will provide an experience in an altogether new field," said Agrawal. He hoped that it will eventually lead to a private player being involved in making of a military aircraft.

    A similar move is expected for the AN-32s, with the private vendor expected to be finalized within the next week, said a source in IAF.

    Taneja Aerospace signs contract to upgrade MiG-29s - The Times of India
     
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  3. ezsasa

    ezsasa Senior Member Senior Member

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    is it me or the numbers do not add up..

    they are saying four aircraft every three months, which would mean whole exercise is going to take 4 years minimum.
    its a 12 crore contract, so three crores per year.

    lets say they need average CTC per technician is 15 lakhs per annum and assume they need 4 technician per aircraft, which come to 60 lakhs per annum per aircraft.
    they plan to service 4 aircrafts at a time so that would mean 60 * 4 = 2.4 cr per annum.
    say senior management and operations people cost another 40 lakhs. wage cost alone is 2.8 cr per year. that leaves roughly 20 lacs.
    what kind of retrofitting that can possibly achieve a budget of 20 lakhs per year.

    even assuming IAF will supply some manpower and resources, looks like they picked the contract at a loss.

    would it be possible by anybody in the industry to throw some light on this, whether this is economically feasible for taneja?
     
  4. sgarg

    sgarg Senior Member Senior Member

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    Very happy with signing of this contract. Hope more such contracts are signed.

    @ezsasa, this is only a "labour contract". The facilities and material is provided by IAF. This is a landmark contract in true sense, and I hope many more such contracts are signed for internal maintenance of IAF aircrafts.
     
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  5. ezsasa

    ezsasa Senior Member Senior Member

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    So it is a green field project, More strategic than economic benefits. Had my fair share of those.
    All the best to Taneja then !!!!
     
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  6. Compersion

    Compersion Senior Member Senior Member

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    A lot of the senior and ex-senior DRDO staff must be given opportunity to join private sector and start their own firms. the government can give seed money and take ownership also.
     
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  7. Yusuf

    Yusuf GUARDIAN Administrator

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    this from a month ago

     
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  8. sob

    sob Moderator Moderator

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    There are many imported components which HAL has difficulty in procuring because of the end user certification and other paperwork. For TAAL these would be easy to procure.

    This is a very good news. Expect more of such news in the future.
     
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  9. TrueSpirit1

    TrueSpirit1 The Nobody Banned

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    Care to share ?

    A little more ?
     
  10. sayareakd

    sayareakd Moderator Moderator

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    Great going Taneja Aerospace...............:thumb:

    I am at your FB page.............:wave:
     
  11. sob

    sob Moderator Moderator

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    Me too Anup.. following you
     
  12. ezsasa

    ezsasa Senior Member Senior Member

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    Green field projects are projects undertaken by a company for the first time in a particular industry. Normally companies expect say 30% profits from a project. In case of green field projects companies do not mind even if they end up having zero profit. For them it is a test case to find out whether it is economically viable for future ventures. If they succeed they gain experience and knowledge before any other company in their field which is a major advantage atleast for five years. Flip side is that they would be going in blind because there is nobody to guide them if they are stuck. Every body is closely watching them because their lessons end up being rule book for the entire industry.

    Green field projects used to be my specialty, they are tough and challenging but the best part is they are thrilling and exciting.
     
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