IAF Demand for 250 Tejas MK2

[p2prada]

They lost to HAL-BEL combo.

That's fine. A second line for Rustom and co is a lot cheaper and less risky than a second line for LCA.

And practically we need hundreds of UCAVs. UCAVs will fly a lot more than fighters, so a second line is an added bonus. Realistically, I don't see any private industry jumping up at the chance to manufacture LCA right away.

 

[Zebra]

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.

Anyway, Tata will be better option. IMO.

They do have a JV with HAL.

 

[sgarg]

LCA Tejas make a lot of sense for Mahindra and Tata who want to build complete airplanes.

This gives them a substantial contract which justifies the investment; and there is a lot of potential for growth.

I am sure these companies will come forward to build Tejas Mark II.

Tejas contains a large number of parts either imported or sourced from local private industry. It is not that HAL builds everything. The private player can also source the components from the same vendors as used by HAL. The components built by HAL can also be supplied to the private player.

The production processes that are employed by HAL will need to be duplicated. I am sure private players like Mahindras can bring even better technology than HAL.

 

[sgarg]

That's fine. A second line for Rustom and co is a lot cheaper and less risky than a second line for LCA.

And practically we need hundreds of UCAVs. UCAVs will fly a lot more than fighters, so a second line is an added bonus. Realistically, I don't see any private industry jumping up at the chance to manufacture LCA right away.

There is no production line for Rustom.

However I do think UAVs should be built by private companies. HAL cannot and will not be successful in mass production.

What is the "risk" in second production line. Can you list the risks??

 

[PaliwalWarrior]

LCA Tejas make a lot of sense for Mahindra and Tata who want to build complete airplanes.

This gives them a substantial contract which justifies the investment; and there is a lot of potential for growth.

I am sure these companies will come forward to build Tejas Mark II.

Tejas contains a large number of parts either imported or sourced from local private industry. It is not that HAL builds everything. The private player can also source the components from the same vendors as used by HAL. The components built by HAL can also be supplied to the private player.

The production processes that are employed by HAL will need to be duplicated. I am sure private players like Mahindras can bring even better technology than HAL.

there is no technology arbitrage (better tech than HAL ) in building AC

 

[p2prada]

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

That's just the cost of the assembly line. The actual production line also includes other suppliers who will have to increase production to keep up with a new demand for a new production line. For eg, if BEL is manufacturing 16 radars for Tejas, if we setup a second line, they will have to increase capacity to 32 radars. For that, they will have to fund a new line. They will also have to double manpower. Due to increased demand for radars, the company, probably ASTRA, making T/R modules will have to double capacity and that will require more funding. Because ASTRA wants to increase capacity, the company manufacturing resistors, capacitors etc will have to double their production. Because of all this even their electricity and water consumption will increase. They will have to take care of all these. Companies supplying chemicals will have to double capacity in order to keep up. Even if one of them is unable to double their production capacity, then the second line will never happen. Doubling manpower is also not so easy. A company may take a decade just to do that. If the parent company says we will find someone else to provide the extra capacity, the first supplier may take the parent company to court citing breach of agreement. There are so many problems in just doubling capacity. It is not easily accomplished.

That 1600 crores is just for the assembly line, not for the full production infrastructure.

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

HAL won't agree to it. They will want their 16 aircraft line regardless of who else wants to join. HAL will want to produce Sitara also.

However best solution is to have two competing lines.

The private production line won't compete with HAL. It only adds capacity while building up the private industry's experience. That private company will take 2 or 3 decades to achieve HAL's level of competency, but we obviously need to start somewhere.

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

So there is already private companies building aircrafts in India.

I almost joined Taneja Aerospace almost a decade ago. It is a good company.

 

[Kunal Biswas]

To accomplish the number of Aircraft projected for induction that is 250 MK2 + 40 MK1, HAL alone cannot do it with a production rate of 16 per year ..

Either there is need for new HAL`s assemble or Pvt corp producing it, Gov already projected 12 billion for the cause ..

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

what do they bring on table ?

 

[ninja85]

is L&T an indian company??? because i heard it's a franchise of a foreign company.

 

[PaliwalWarrior]

To accomplish the number of Aircraft projected for induction that is 250 MK2 + 40 MK1, HAL alone cannot do it with a production rate of 16 per year ..

Either there is need for new HAL`s assemble or Pvt corp producing it, Gov already projected 12 billion for the cause ..

Give this to HAL / DRDO / ADA

if the IAF GOvt had given them more orders for Mk1 and money they would have setup required infra

They have worked thru all these years

They have taken the pains and the abuse, bad mouthing etc etc now when the project is nearing completion they deserve the fruits


Mk2 is still 3 years away in 3 years time they can setup the new lines

 

[Apollyon]

A second production line for LCA will only serve to increase costs of the aircraft, the mess EF is in.

That's just the cost of the assembly line. The actual production line also includes other suppliers who will have to increase production to keep up with a new demand for a new production line. For eg, if BEL is manufacturing 16 radars for Tejas, if we setup a second line, they will have to increase capacity to 32 radars. For that, they will have to fund a new line. They will also have to double manpower. Due to increased demand for radars, the company, probably ASTRA, making T/R modules will have to double capacity and that will require more funding. Because ASTRA wants to increase capacity, the company manufacturing resistors, capacitors etc will have to double their production. Because of all this even their electricity and water consumption will increase. They will have to take care of all these. Companies supplying chemicals will have to double capacity in order to keep up. Even if one of them is unable to double their production capacity, then the second line will never happen. Doubling manpower is also not so easy. A company may take a decade just to do that. If the parent company says we will find someone else to provide the extra capacity, the first supplier may take the parent company to court citing breach of agreement. There are so many problems in just doubling capacity. It is not easily accomplished.

It's better to have two separate production lines (16+16) with a bit of increased cost from then shoving everything into HAL. The only extra cost will be training of manpower ..right?

What makes you think the sub-system suppliers don't have spare capacity or are not willing to ramp-up the production from supposed 16 to 32 with a production run of 8 years (200/32 ~ 8years) starting 8 years from now (assuming serial production starting from 2022). The current planned production rate of Tejas MKI is 8/y, right? Then doubling it to 16/y for MkII will cause havoc I suppose. Then theres Saurav Jha (on twitter) saying HAL to produce 16/y Tejas MkI under Modi Government like HAL has proposed to MoD (Make in India ).

 

[sgarg]

My comprehensive reply to p2prada and others:

1. If aviation industry has to be built in this country, it will happen only when the production is substantial. The amount of investment required and the entry barriers are massive.

2. The government has to play a key role. This has been the case in every country where aviation industry is strong.

3. India now has the dubious distinction of highest number of unemployed technical manpower. MTechs from IITs are finding jobs hard to find. So at least manpower won't be an issue.

4. The industry has to be there to support local R&D projects. Nobody will invest billions to manufacture one or two parts.

5. HAL has done a good job on LCA Tejas, and a new line should not be considered an affront to HAL. HAL will also benefit from accumulation of technical skills in the country.

6. I think indian industry has the desire to scale up in aviation field. The investment will come if orders are there.

7. India has been strong-armed by foreign countries in every aviation purchase from foreign source. This is resulting in low readiness levels of the forces. India pays through the nose but capability accretion is meager.

8. The local products can support much larger acquisitions by Indian government (like Akash missile) because payment is mostly in local currency.

 

[Kunal Biswas]

No one is talking away their 'Job', To meet the required number on production line is not enough, Rather simultaneously on going production to meet the projected number ..

They have taken the pains and the abuse, bad mouthing etc etc now when the project is nearing completion they deserve the fruits

 

[p2prada]

It's better to have two separate production lines (16+16) with a bit of increased cost from then shoving everything into HAL. The only extra cost will be training of manpower ..right?

It all depends on the private company in question. You forget the cost of infrastructure also, along with new sources of supply.

Normally a single production line is more cost effective than having multiple. But if the line has a limit, and demand is greater, then it makes sense to get a second one. It would be more interesting if ADA manages to secure export orders by the next decade. It would then be possible to supply aircraft to IAF/IN as well as the export customer.

The second line has a lot of hurdles to cross. The first one would be a private company should be willing to join HAL in this project. MoD was talking about doing this with a foreign company. I am just hoping it wouldn't be SAAB trying to shove Gripens down IAF's throat.

What makes you think the sub-system suppliers don't have spare capacity or are not willing to ramp-up the production from supposed 16 to 32 with a production run of 8 years (200/32 ~ 8years) starting 8 years from now (assuming serial production starting from 2022). The current planned production rate of Tejas MKI is 8/y, right? Then doubling it to 16/y for MkII will cause havoc I suppose. Then theres Saurav Jha (on twitter) saying HAL to produce 16/y Tejas MkI under Modi Government like HAL has proposed to MoD (Make in India ).

The current HAL line will produce 8 per year by 2015-16. After that production will be ramped up to 16 per year.

is L&T an indian company??? because i heard it's a franchise of a foreign company.

L&T is an Indian company. The founders were foreign nationals. Their names were Larsen and Toubro.

 

[sgarg]

The production capacity, ramp up plans etc. are very much dependent on orders. The 500 pound guerrilla in the room is the orders for Tejas.

Problem is not investment. Any private company will invest if orders are there. If order is given in bulk (say for 200 units of Tejas), then the private player knows he has an order book of 5B USD and he can plan investments.

 

[sgarg]

The private player is to bring quality and efficiency in manufacturing. I think this is very much needed.

You have some key programs like SSBN and Akash missile succeeding due to significant contribution of private companies.

Public companies are suffering from poor work culture - slow decision making, labour problems, and inefficiency (apart from corruption).

 

[ninja85]

L&T is an Indian company. The founders were foreign nationals. Their names were Larsen and Toubro.

if founders were foreigners how this company is indian?

 

[Srinivas_K]

India needs more than one assembly line to produce fighter jets. China is producing fighter jets in numbers and India should be ready to defend against the aggression of China and Pakistan, Just in case.

 

[p2prada]

if founders were foreigners how this company is indian?

Because it is listed as an Indian company, L&T Pvt Ltd.

I can go to US and setup an American company, call it P2P LCC.

India needs more than one assembly line to produce fighter jets. China is producing fighter jets in numbers and India should be ready to defend against the aggression of China and Pakistan, Just in case.

Even if this deal doesn't come through, India will have three production lines. One each for LCA, Rafale and MKI/FGFA.

 

[PaliwalWarrior]

if founders were foreigners how this company is indian?

the founders were foreigners and engineers they founded this company before independence and then expanded teh company

Then they increased the professionals in management and then those management took the co public and today it is the 100% professionally managed co in india

no family or business gorup control over it

 

[Kunal Biswas]

The amount is quite large, No wonder one can sense the urgency of IAF ..

Its about time things get on track ..

8. The local products can support much larger acquisitions by Indian government (like Akash missile) because payment is mostly in local currency.