Tuesday, 13 October 2015

A second Tejas assembly line

By Ajai Shukla
Business Standard, 13th Oct 15

As this newspaper has reported, there has been a major breakthrough in one of India’s most ambitious and expensive weapons development projects --- the Tejas Light Combat Aircraft (LCA) --- with the Indian Air Force (IAF) now willing to accept 100 improved fighters. The Tejas Mark IA, as some call the improved version, will have air-to-air refuelling, improved radar, missiles to strike enemy aircraft beyond visual range and electronic jammers to blind enemy radar. For Hindustan Aeronautics Ltd (HAL), which is struggling to build even the first 20 fighters, the IAF’s acceptance constitutes an embarrassment of riches. Going by HAL’s current rate of assembly, delivering 120 Tejas fighters will take a decade.

The real Tejas numbers will, in fact, be well above 120. Given that the IAF has finally accepted the Tejas Mark 1A as a capable replacement for its 13 squadrons of MiG-21s and MiG-27s, it will need at least 250 Tejas fighters before the end of the decade, when the obsolescent MiGs must be retired. Furthermore, the IAF requires another 20 more Tejas Mark 1A for training. The navy, meanwhile, has declared it needs at least 56 Tejas Mark II (with more powerful engines) for its two indigenous aircraft carriers. That adds up to well above 300 Tejas fighters.

It should be obvious to planners in South Block that the Tejas cannot possibly be built in these numbers, in an acceptable time-frame, without establishing another assembly line to double the efforts of HAL’s current Tejas line in Bengaluru. This is the golden opportunity the defence ministry has been seeking for nurturing a private sector competitor to HAL. The ministry must select a private company, transfer to it the technology needed to build the Tejas, and order 150 fighters in short order.

The ministry is already attempting to build up a private sector aerospace manufacturer, but in a misconceived project. A Tata-Airbus consortium has been asked to build 56 transport aircraft to replace the IAF’s venerable Avro fleet. There are many problems with this proposal: It does not envisage building an indigenous aircraft; it makes no economic sense to set up full-scale production infrastructure, including an airfield, for just 56 aircraft; a multinational giant (Airbus) will hold disproportionate clout in the partnership, and most crucially, the Avro has never had an operational role beyond ferrying air marshals around the country. Neither will its replacement.

In contrast, a parallel Tejas production line would be a perfect launch pad for a private aerospace corporation. Unlike HAL, which has an aerospace empire sprawling across the country, a private sector aerospace entrant would per force have to develop a network of vendors and sub-vendors, upon which it would rely for systems, sub-systems and components, while reserving for itself only final integration --- assembling the parts and rolling out, inspecting and testing full-built Tejas fighters. In contrast, HAL avoids sub-vendors, keeping profits within the company by farming out manufacture to its own numerous divisions.

A parallel private sector production line would also create competition to make the Tejas cheaper. For this, the private company must be encouraged to partner an established western corporation like Saab, Eurofighter, Lockheed Martin or Dassault. Many have signalled interest in partnering India; Saab had even put forward a full-scale proposal that was largely ignored in New Delhi. The chosen foreign vendor should be incentivised to bring in contemporary aerospace manufacturing technologies and best practices.

While HAL’s single production line would not meet even the IAF’s requirements, adding a parallel line would open up exports. So far, with the IAF itself unwilling to accept the Tejas, there has been little prospect of exporting this excellent fighter --- buyers usually reason, “If the home air force is not interested, why should we be?” But, with the IAF now inducting the fighter in numbers, the Tejas can establish a presence in the global light fighter market. Even at its current cost of Rs 240 crore ($40 million), which includes the aircraft, ground equipment, test equipment and spares, it is reasonably priced, given its fourth-generation configuration --- a fly-by-wire fighter, built of composite materials.

The Tejas’ current price can be lowered, given that it is currently planned and built in the most uneconomical manner possible --- with little outsourcing, an inadequate assembly line and orders placed in penny-packets, which eliminates economy of scale. Instead of this, working on an assured order of 100-150 aircraft, with a vendor chain developed deliberately, and the incorporation of international best practices in assembly, would lower the Tejas’ cost substantially. This would boost the prospect of export, especially when backed by an international vendor’s marketing expertise and global marketing chains. This prospect of global export would be an added attraction for international vendors.

In sum, bringing in a private sector company to establish a parallel production line for the Tejas would do more than just create an aerospace alternative. It would also ensure the Tejas is inducted into IAF service at least twice as fast, filling up a worrying operational gap. Second, global standards and best practices would come into domestic aerospace manufacture. Third, modern assembly lines and competition would drive down the cost of the Tejas, benefiting the IAF as well as export prospects. Finally, the entry of the private sector into aerospace would spread dynamism and flexibility across the industry.

There are difficulties too, and the first is to select a private company that would benefit enormously from government largesse --- including access to airfield infrastructure, since demanding that the company establishes its own would raise the cost of entry unrealistically. Given the cutthroat competition between private sector aspirants in defence, the ministry would need a clear and transparent formula for selecting a winner, one that could withstand inevitably bitter scrutiny from the losers. This would naturally involve assessments of financial health, track records in manufacture, core areas of expertise, and past delivery records. Competition will be intense, given that the ministry would be giving the winner a leg-up into the ranks of global aerospace manufacturers, just as it spent taxpayer billions to make HAL what it is today. A clear public rationale will have to justify the decision.

A sceptical HAL unsurprisingly scoffs at the notion of a rival private sector assembly line. Senior executives point to what happened three months ago when HAL, already preoccupied with three simultaneous helicopter programmes (the light combat helicopter, light utility helicopter and weaponised Dhruv), issued a proposal offering the private sector full technology transfer to build the Dhruv advanced light helicopter in India. HAL officials say not a single private vendor accepted the challenge.

HAL also points out that the private sector Tejas line would run for, say, a decade, but the company would have to logistically support the fighter for the next thirty years. This is true, even if it betrays an unreasonable suspicion of the private sector that has a reasonable record of supporting products. What is true, though, is that if the private sector fails to respond to an invitation to build the Tejas, or does not support the fighter through its service life, this would be a black mark forever.

Monday, 12 October 2015

Amidst tension in South China Sea, US, Japan and India ready for naval Exercise Malabar

Indo-US Exercise Malabar to now permanently include Japan

By Ajai Shukla
Business Standard, 12th Oct 15

Confrontation is brewing in the South China Sea, with the Financial Times reporting that the United States Navy (USN) is about to challenge China’s construction of “artificial islands” in disputed waters. By sailing warships next week through a 12-nautical mile zone around these islands, the USN will explicitly reject China’s claim.

Beijing’s maritime neighbours, especially Japan, the Philippines and Vietnam are backed by Washington in resisting China’s increasingly aggressive claims to most of the South China Sea and islands in the Sea of Japan, on which the neighbours maintain their own claims.

New Delhi maintains distance from this face off, but only to a point. This week, the navy will join the USN and the Japanese Maritime Self Defense Force (JMSDF) in coordinated battle drills in Exercise Malabar 2015 in the Bay of Bengal.

One of the four USN ships participating, the USS Forth Worth, was involved four months ago in challenging China’s claims over the disputed Spratly Islands. In May, Beijing lodged an official protest with Washington after USS Forth Worth made a “freedom of navigation” passage through the Spratly Islands.

From October 14-19, the three navies will rehearse scenarios for destroying hostile submarines, surface warships and aircraft. The phrase “People’s Liberation Army (Navy)”, or PLA(N), will not be used in the exercise. Yet, there will be little doubt about what these sailors are training for.

In a major shift for New Delhi, Exercise Malabar, a hitherto bilateral US-India annual event, albeit with foreign invitees, will now be permanently designated a trilateral US-Japan-India exercise. Defence Ministry sources tell Business Standard a formal case has been taken up in New Delhi and an announcement will soon be made.

This will be another overt Indian step towards the western Pacific, one that New Delhi has so far hesitated to take. In 2007, after a five-nation Exercise Malabar, with Japan, Australia and Singapore as invitees to what strategists dubbed a “concert of democracies”, Beijing went on a diplomatic offensive. New Delhi quickly backed off, soothing Chinese feelings by reverting to a bilateral format.

Now a trilateral Malabar is being formalised, and last month, India and Australia held their first-ever bilateral naval exercise, billed as AUSINDEX-15. It is also noteworthy that Malabar is held on alternate years in the western Pacific.

(Courtesy: Shashank Joshi, in The Interpreter)

Analysts like Shashank Joshi (in Australian publication, “The Interpreter”) rightly point out that, going purely by warship numbers, Malabar 2015 --- featuring ten warships --- is significantly smaller than the 2007 exercises that involved 26 warships. Nor is it larger than Malabar 2010, 2012 and 2014, which also involved ten warships.

Even so, Indian admirals say the exercises are growing ever more sophisticated and display growing trust between participating navies. Joshi notes that after Prime Minister Narendra Modi’s meeting with President Barack Obama in September 2014, a joint statement noted they had “agreed to upgrade their existing bilateral exercise Malabar”. This endorsement was repeated when Obama visited New Delhi in January.

The US warships participating this week will include the USS Theodore Roosevelt, one of the USN’s eleven nuclear powered aircraft carriers. This vessel is nicknamed “The Big Stick”, after Roosevelt’s famous admonishment, “Speak softly, but carry a big stick”. it embarks 70 aircraft: including 44 F/18 fighters, four Growler electronic warfare aircraft, four E-2C airborne early warning aircraft, and 20 combat helicopters.

The USN is also sending USS Normandy, a less-than-cutting-edge Ticonderoga-class destroyer; the USS Fort Worth, America’s newest and most modern littoral combat ship (LCS); and a nuclear powered attack submarine, USS City of Corpus Christi.

India will field a Rajput-class destroyer, a Brahmaputra-class frigate, a Shivalik-class frigate, a fleet tanker and a Kilo-class submarine. New Delhi has never yet fielded an aircraft carrier in Exercise Malabar and --- disappointingly for the US given the agreement between the two countries to cooperate in building India’s indigenous aircraft carrier --- this year will maintain that absence.

Tokyo is fielding only a single warship, the destroyer JS Fuyuzuki. Nick-named the “Japanese Aegis”, this will be amongst the most potent warships in the exercise.

Malabar 2015 will feature cutting-edge airborne maritime surveillance, with the USN and Indian Navy both deploying the world’s most advanced maritime aircraft, the Boeing P-8 Poseidon. The USN calls their version the P-8A, while the Indian version is called P-8I.

This aircraft scans vast swathes of ocean for enemy ships and submarines. When it detects one, it is able to quickly direct friendly ships and submarines onto the contact, using satellite-enabled digital linkages.

The Malabar naval exercises began in the early 1990s, when Washington and New Delhi began exploring a new, post-Cold war relationship. In 1991, the army chief of the US Pacific Command (PACOM), Lieutenant General Claude Kicklighter, held talks in Delhi, resulting in the first modest Exercise Malabar, featuring two ships from each navy.

After a hiatus in relations caused partly by India’s nuclear weapons tests in 1998, Exercise Malabar resumed in 2002, and have been held every year since then.

Exercise Malabar 2015: participants

Serial No

US Navy

USS Theodore Roosevelt
Aircraft carrier, embarking Close Combat Strike Group (CCSG) – 12. This has 70 combat aircraft, including 44 x F/A-18
USS Normandy
Ticonderoga-class destroyer
USS Forth Worth
Littoral Combat Ship (LCS), one of the US Navy’s newest warships
USS City of Corpus Christi
Los Angeles-class nuclear-powered attack submarine (SSN)
P-8A Poseidon maritime surveillance aircraft
Will operate from shore base at Arakonam

Indian Navy

Rajput-class destroyer
Guided missile destroyer, built in mid-1980s
Shivalik-class frigate
Multi-role stealth frigate, built in late 2000s
Brahmaputra-class frigate
Multi-role frigate, built in mid-1990s
Fleet support ship
Logistical vessel for refuelling and resupply of the fleet at sea
INS Sindhudhwaj
Kilo-class submarine
P-8I maritime surveillance aircraft
Will operate from shore base at Arakonam

Japanese Maritime Self-Defense Force (JMSDF)

JS Fuyuzuki
Akizuki-class guided missile destroyer, known as the “Japanese Aegis”