Wednesday, 7 January 2015

Scuttling a “Made in India” project: the case of the HTT-40 trainer

Defence Minister Parrikar will now decide whether the indigenous HTT-40 project will continue or be killed

By Ajai Shukla
Business Standard, 7th Jan 2015

Prime Minister Narendra Modi’s “Make in India” vision faces powerful opposition, including within the military, which sees greater benefit in importing costly foreign weaponry.

This is evident from the successful scuttling of a Hindustan Aeronautics Ltd (HAL) project for designing and building a basic trainer aircraft named the Hindustan Turbo Trainer – 40 (HTT-40) for training rookie pilots of the Indian Air Force (IAF). Instead of this aircraft, which HAL could build, export, overhaul, upgrade and even modify into a light attack aircraft, powerful lobbies have promoted a Swiss trainer --- the Pilatus PC-7 Mark II.

Business Standard has learnt, and the IAF has confirmed, that the MoD has directed HAL to close the HTT-40 project. Instead, HAL will build 106 PC-7 Mark II trainers in India.

In 2009, the ministry of defence (MoD) had ruled that the IAF’s requirement of 181 trainers would be met through two simultaneous channels --- 75 aircraft bought from abroad; while HAL designs and builds 106 HTT-40 trainers in India.

Accordingly, the IAF contracted on May 24, 2012 with Pilatus for seventy-five PC-7 Mark II trainers for Swiss Francs 557 million (Rs 3,600 crore). With that done, the IAF began a shrill campaign demanding 106 more Pilatus in place of the HTT-40.

Business Standard has identified a four-pronged campaign that promoted the Pilatus trainer, while blocking the HTT-40 programme. This included a letter from a serving IAF chief to the defence minister that knowingly understated the cost of the Swiss trainer, to argue that the indigenous trainer is too expensive; a letter from a Bharatiya Janata Party (BJP) member of parliament (MP) to the Chief Vigilance Commissioner (CVC) alleging corruption in selecting an engine for the HTT-40, delaying the engine purchase; another letter from a shadowy non-governmental organisation (NGO) to the CVC, also alleging irregularities in HAL’s engine selection and levelling charges against HAL’s design chief; and repeated attempts by the IAF deputy chief, who sits on HAL’s board, to choke off funding for the HTT-40.

CVC investigations have found no wrongdoing, but the investigation has delayed HAL’s purchase of an engine for the HTT-40. Such delays strengthen the IAF’s case for buying more Pilatus.

Business Standard has earlier reported on the letter written by then IAF chief, Air Chief Marshal NAK Browne to then defence minister, AK Antony (July 25, 2013, “Indian Air Force at war with Hindustan Aeronautics; wants to import, not build, a trainer”, and July 31, 2013, “Admissions & obfuscations in IAF clarification on BS reports”). Browne’s five-page letter argued for scuttling the HTT-40 and buying more Pilatus, falsely stating that the Pilatus costs just Rs 30 crore per aircraft, significantly cheaper than the HTT-40. In fact, due to the rupee’s decline, the IAF was paying Pilatus almost Rs 40 crore for each PC-7 Mark II trainer being delivered.

Browne also stated incorrectly that the Pilatus’ cost would remain Rs 30 crore per aircraft till 2017. In fact, the next 38 trainers will cost Swiss Francs 6.09 million (Rs 39.3 crore today) each under the “options clause” of the contract. The cost of the following 68 aircraft (adding up to 106 additional PC-7 Mark II) would be negotiated afresh and would almost certainly be higher, due to inflation.

The MoD ignored Browne’s letter, being disinclined then to scupper an indigenous project. However, with the IAF blocking funding for the HTT-40, HAL was forced to commit Rs 180 crore of company funds in July 2013. In early 2014, that was upped to Rs 350 crore, with three prototypes to be built for accelerated flight-testing.

With the HTT-40 on track, and racing towards its first flight next year, two corruption allegations mysteriously popped up, stalling the project. Both alleged wrongdoing in HAL’s selection of the Honeywell TPE 331-12B engine after an open tender, when the alternative supplier, Pratt & Whitney, refused to allow licensed manufacture in India. With the first flight looming, Honeywell agreed to provide a “Category B” engine --- a used engine with more than 80 per cent of its service life remaining.

The first complaint came in early November from the BJP MP from Jaunpur, Krishna Pratap Singh, who complained to the CVC about the engine selection and blamed HAL’s design chief, T Suvarna Raju, who oversees the HTT-40 project. Investigation began and the MoD halted engine procurement.

Contacted by Business Standard, Krishna Pratap Singh claimed that he knew nothing about the HTT-40 or the issues involved. “About 3-4 months ago a “sajjan” (person of good character), who I don’t remember now, came to me and said there was corruption. I only wrote that the matter be investigated, and any wrongdoing corrected,” said Singh.

The second allegation came almost simultaneously from an NGO called Rashtriya Mukti Morcha. The RMM has neither expertise nor previous interest in aerospace. It has earlier filed petitions against Sonia Gandhi’s right to hold constitutional office, and in the Jharkhand Mukti Morcha bribery case.

Contacted by Business Standard, RMM chief Ravindra Kumar acknowledges filing a complaint. He said that details are in his files, but he repeatedly denied requests to visit his office to ascertain the basis for his complaint.

CVC investigations into the complaints unearthed no wrongdoing; It is not unusual for “Category B” engines to be chosen for prototypes, while buying new engines for the production aircraft. HAL had powered the Intermediate Jet Trainer prototype with a “Category B” Larzac engine, until new engines became available.

Even so, engine procurement was halted. Meanwhile the IAF repeatedly petitioned the MoD that Swiss trainers should be quickly bought since the HTT-40 would be late.

All this while, the Deputy Chief of Air Staff (DCAS), who sits on HAL’s board, steadfastly opposed funding for the HTT-40. When the board allocated Rs 180 crore in July 2013, the DCAS dissented in writing, something that the IAF now denies.

The IAF has sought to associate the PC-7 Mark II with the “Make in India” drive by seeking to build it in India to blueprints provided by Pilatus. Yet it would essentially remain a foreign aircraft, with intellectual property, technology and licensing residing abroad. In contrast, a “Make” category project like the HTT-40 would involve far more expansive indigenisation --- including ground-up design and integration, test flying and certification and eventual manufacture.

In 2013, the IAF asked HAL to scrap the HTT-40 and instead build 106 PC-7 Mk II from technology transferred by Pilatus. “However, in their own interest HAL declined to participate in license manufacture of the PC-7 Mk II”, the IAF told Business Standard.

Rebuffed by HAL, but insistent on providing a veneer of indigenization, Browne bizarrely declared on October 8, 2013, that the IAF’s base repair depots (BRDs) --- which maintain and overhaul aircraft and engines --- could build the PC-7 Mark II. The IAF’s maintenance chief, Air Marshal P Kanakaraj, quickly contradicted him, while the MoD simply ignored the proposal.

Now, however, battered to a halt by groundless complaints and unable to buy an engine, HAL has buckled under the pressure. Last month HAL chairman, RK Tyagi, agreed to build the PC-7 Mark II, while developing the HTT-40 as an HAL project.

Even that is seen as a threat. At HAL’s board meeting on December 20, PK Kataria, an MoD financial advisor questioned why the HTT-40 project should continue, since HAL would be building the PC-7 Mark II.

Defence Minister Manohar Parriker will pronounce final sentence on the HTT-40, in the apex Defence Acquisition Council. Asked when this would happen, he indicated that the die was not yet cast: “There are issues [relating to the Pilatus] that were raised and which have to be addressed. I think every query and every difficulty has to be properly addressed.”

The MoD and HAL did not respond to requests for comments for this report. 

34 comments:

Kris said...

Wow..Colonel,

This is a fabulous example of "investigative journalism". Many congratulations.

NO Pilatus PC-7MKII would mean loss of Swiss tourism and paid holiday for India's Imported Air Force personnel. It would also affect free scholarship for their children and post-retirement benefits. So Imported Air Force's desperation for Swiss, French and western products is understandable.

New RM or no RM, there are some universal truths in defence procurement. There is no free lunch and one has to pay to get his product accepted. Irony is that its the bribe giver who is punished in India but not the bribe taker.

Anonymous said...

ISnt this how the previous BTA by HAL was scuttled...tie them in red tape and kill the project...
When HAL has decided to put its money why should IAF bother...this is so much biased action...
Also the leader of HAL who has been supporting the project how come he made a U turn and accepted..what was the pressure on him.....Sad another desi effort falls prey to politics...

Anonymous said...

Whats the great surprise..HAL agreed to Pilatus...from one aero show to other a complete change...

As i am told, the aircraft has taken shape and is awaiting engine..so what do they do now...place it in museum with a IAF insignia on it...asking who killed me??

How come the MOD is playing toy to IAF games...So much to MR Modis Make in INdia campaign...
HAL is a national property it cant be allowed to decide fate of aerospace in this country and do garage job....India needs to continue the HTT

Anonymous said...

BJP MP writing letters on behalf of some Sajjan...LOL...

OK one question if pilatus has a fleet avail of 90% and if each pilatus is flying 6 hours per day , for 300 days, it means teh IAF has 75x6x300=1,35000 flying hours..and if each pilot needs 60 flying hours... we are looking at a capacity to train 2000 plus pilots every year...so why does teh IAF want more pilatus..Let HAL make the HTT and produce it in next 5 years....till such time pilatus will suffice...whats the rush...
Can the IAF explain why it wants 8000 crores to be paid to Pilatus....bailing out swiss firm?
Also how can the repeat PO be greater than original qty of the DAC decision..wont Koreans and Americans object...

Finally HAL could not finalise the Main ToT contract till date so how in world will pilatus conclude the mfg contract in a three years...

HTT should go ahead..stop killing the Made in India designs....stop being anti nationals...

Anonymous said...

Ajay you have been the only media guys suppporting the procurment process for Make in India theme..

a very well covered article and best part is it hits the nail on head of the corpse...no words mixed.

Let the nation know what happens behind the closed crridors of defence blocks and what decisions which have an impact on nation are taken there..

Anonymous said...

Whatever the intricate details of the case, one thing is clear that HAL needs to stand on its own feet as an independent business entity and take actions accordingly. The MP must be put under the scanner to ascertain the truth and if he has cried 'wolf' to sabotage the project he must be given exemplary punishment.

Anonymous said...

If HAL has any self respect they should refuse to make the PC-7, go ahead with the HTT-40 and prove they were right by getting a foreign market for their aircraft.

lspk said...

Sir...please write a letter personally to manohar parrikar and modi...these corrupt iaf officers are wasting our tax money to enrich foreign vendors...lspk

Anonymous said...

Colnel

Werent you with the RM a few days before...why didnt you ask him what is he gonna do now...bite the bullet and decide to go with true MAKE in INDIA or will let it be swayed the air force way..
Best part how is MOD now singing tunes with IAF and agreeing....A fight fought for three years cant be called off this way...HAL needs to stand on its feet and prove....we cant allow this to Happen....If HAL fails its heads should be rolled...and if delivers... we have an ISRO example to follow...

Anonymous said...

IS it that Tyaggi sahab has made deal before he leaves and will be banking a plum post like a member on planning comm or some govt advisor to MOD....why this decision in his last month....some thing is not right....
He was the one who took one on one with Browne and now he is meeking backing out in his retirement month...
and shame on BJP MPs who are taking money and throwing letters all around...
The Pilatus lobby is clearly at work and has paid all guys...

there are no orders with them and they want this desperately..what the hell are the Koreans doing...they were cheated by swiss and IAF together... they should complain and demand a fair treatment and is HAL HTT wins well the country saves its pride by not importing a 70's aircraft

victor raj said...

If someone gets a bribe in defence, that case should be completed within 3 months and the punishment should be immediate hanging for every Indian involved in that bribe, it doesn't matter how small or how big the bribe including the MP's writing fake letters to purposefully screw the desi effort. Then see how much faster everything changes.

Ujjwal said...

Colonel Shukla, do you think HAL is competent enough to design, develop, test,certify and delivery within laid time frame? Remember the examples of HAL TEJAS, even after nearly three dacades, it is nowhere near FOC or example of HJT-36,after nearly two decades it has basic design flaws and the project ultimately shut down.

Anonymous said...

Just shows the degradation in IAF....BTW, does anyone know what actually constitues a 'Treason' ?

P.K.Chaudhuri said...

Lack of vision and attraction for election fund is obstructing the government from taking obvious decisions. Government must ask for increase in manufacturing capacities of all successful products such as Aakash Missiles, Helina / Nag Missiles, various naval vessels, ALH Dhruv / Rudra etc. Defence PSUs must increase the indigenous content of all these successful products and at the same time aim for the next model of these products. The nation needs to know the status of next model (Mark V) of ALH Dhruv.
It is immoral to allow Agents to market foreign products in India. No efforts can be seen to be taken by the government for exporting Indian Defence products.
I also request the government to increase the production of the LCA for user trial.

Anonymous said...

A real tragedy indeed. Vested interests are holding back true indigenous capability. It is hard to believe that men in uniform - who never tire of playing perpetual victims, harping on their intellectual superiority vis-a-vis the IAS and making claims of being the only class possessing strategic vision - actually had a hand in killing a fledgling homegrown project. Whatever the faults of AK Antony, he at least held the hand of HAL in a genuine Indian project with long term benefits and implications. This BJP administration is slowly changing colours and showing suspect intents - Whether it be the BTC turnaround or promises of OROP. This illiterate BJP MP from Jaunpur and rabble rousing NGO need to be investigated. Will it happen? Highly unlikely considering who their probable instigators are. Will the opposition raise the issue? Again unlikely as they are preoccupied with derailing good and long overdue reforms which they could never push through. Would have made a good comedy only if it hadn't been so bloody tragic.

Anonymous said...

Well researched article. Good going, keep it up.

Anonymous said...

Ajai Ji/Ajai sir/Ajai bhai/Ajai Shukla,

I am so glad that HAL is being asked to work on Pilatus instead of reinventing the wheel. Taking away excuses from HAL in not delivering IJT is always welcome. I hope and pray the current government will tighten the screws on HAL further.

HAL should be barred from taking up any new design and development projects and asked to concentrate on IJT, LCA and AMCA. If HAL claims they still have design resource available, then ask them to work on NAL Saras and get it to fly.

Jerrick Kant said...

Col Shukla, thank you. Brilliant journalism as always.

On a related note, Business Standard readers might be interested in the recent CAG report on Army, DRDO and Ordnance Factories.

Also confirms the results of the comparative trials, first reported by you (Arjun outruns outguns T-90), and calls out the IA for its double standards when it comes to testing.

kulari94 said...

Treason.

kulari94 said...

Former Defense Minister Antony would not let this happen.

raw13 said...

Logically speaking this makes the best sense. Why do you want to lumber IAF with two versions of the basic trainer aircraft? You end paying extra every single day for the next 30+ years to maintain two types. HAL were always playing catch-up. They should have done this before IAF bought the first batch. To me this points to a gap in communication and understanding the needs of the IAF.

Sachin Khandelwal said...

There should be action taken against those persons or organisation who accuse falsely to stall critical defence projects. Also as a rule, till no adverse judgement is pronounced, critical defence projects should continue unabated.

Anonymous said...

Agree with you on most part but HAL's ability to deliver is questionable. An Air Force can not wait for an indefinite period of time just for a basic trainer.

Anonymous said...

HTT-40 will required engines to be imported. LCA Tejas will not fly without imported GE engines. When engines are so critical to the performance of any aircraft, shouldn't HAL focus on delivering the Kaveri engine instead of designing new aircraft? It seems HAL is hell bent on not learning from the HF-2 Marut fiasco!

Anonymous said...

The proof of the pudding lies in the eating and waiting for the htt-40.....well the less said the better. HAL is so incompetent the last project (HJT-36) they tried is functionally inferior to the Messerschmitt 262 and the germans managed to make that while having a few logistical issues. Maybe a good starting point would be something like a Cessna or a bonanza.

Anonymous said...

The capability of HAL is nascent as an aerospace company at best.

1. LCA - 30 years in development - Final operational clearance not in sight.

2. IJT nowhere in sight after 15 years of development. Now HAL is saying they made a mistake with the tail design and it will take how many years (5-10 years to fix this simple problem)

3. NAL Saras - a very simple plane in development for 20 years. Wrong design, overweight, not fit for service after several years of wait.

4. HPT-32 - Basic trainer created by HAL had the worst crash rate of any trainer in the world.

With such a poor track record of HAL, how can the IAF be blamed for trying to get a good aircraft for basic training. Calling it an Import Air Force by personnel of Public sector undertakings is hilarious. Come up with a working product first and then speak.

DJ100 said...

HAL cannot and should not design a new aircraft at this time. They have not delivered a single homegrown design in last 10 years. IJT is a disaster self created by HAL. What makes you trust the ability of HAL so blindly?

Anonymous said...

Whilst I admire your push for HAL aircraft, fact is that HAL has been slow and incompetent to produce fly worthy aircrafts. Isn't it a fact that infrastructure which HAL has build over the years on taxpayers money is far better than what Boeings have in USA, however the result is zero...Let us face reality, IAF cant keep waiting for its pilots to be killed due faulty trainer aircrafts.. Kudos to HAL to finally realise their inefficiency and incompetence

Palak Gupta said...

HAL has been producing a lot of shoddy products and this is because, we India as a country never really had any expertise in producing a Fighter Jet, Transport Plane or even a trainer.

The IAF neglecting the trainer is understandable but why in the name of basic understanding do they have to neglect the Tejas. Colonel Shukla this takes us back to one of your previous articles on "A Bird in Hand" with Dassault Rafale coming with a $30 Billion price tag, would it not be better if we order 100 mk1 and 100 mk2. This purchase would lay the foundation for an Aerospace Industry which this country needs. To top it with 75 additional Sukhoi 30 mki.

The IJT Sitara is no where close to induction. I think HAL has enough on its plate and the IAF would not want to wait for another 10 years to get a basic trainer.

1. 70 Sitaras
2. Tejas Order must be 100mk1 and 100mk2
3. 60 Rudra
4. 180-190 LCH
5. Sitara
6. Sukhoi 30
7. 200 Light utility helecopters

and lots more

However with the policy of our Honorable Prime Minister we should give HAL the first attempt to make this a possibility.

Time frames must be created and adhered too. Funding under the UPA was not only bad but ugly. Well things seem to have substantially changed with Modification.

Anonymous said...

HAL has to complete LUH, LAH , LCA. mk1 & MK2, IJT and LTA. All going for 10-30 years. Greed has its limits.
Let them first do root cause analysis got HPT 32, then work on This. With PIlatus IAF has something flying,

Anonymous said...

NSR says ---

DM Parrikar must order a thorough evaluation of minimum BAT requirements of IAF for present and near time...He must only order the minimum required numbers so the training program will not suffer needlessly...

And then, he must provide resources to HAL to continue with the building/completion of BAT with Honeywell engine...

Honewywell engine is in manufacturing since 60 years in various versions and is installed on various versions of aircraft...
So their engines will be good for BAT and IJT too...So HAL may wish to look for a powerful engine to overcome IJT weight issues...

DM Parrikar must bang his hands on table and stomp his feet and tell both HAL and IAF to work together to create a BAT within 2 years or so...

Whatever the decision, India definitely needs to develop its own aerospace technology, trainers, fighters, helicopters, UAVs, etc...No one will give them for free and India can't afford to import forever...

Anonymous said...

Kris said..

NO Pilatus PC-7MKII would mean loss of Swiss tourism and paid holiday for India's Imported Air Force personnel. It would also affect free scholarship for their children and post-retirement benefits. So Imported Air Force's desperation for Swiss, French and western products is understandable.

7 January 2015 at 11:10
------------------------------

Kris, I don't know what you are smoking, but it seems to be the interesting kind. I have never seen Indian students go to switzerland for studies let alone on a scholarship.

Abhiman said...

As always, an eye-opener article by Col. Shukla.

The Imported Air Force (IAF) must be repeatedly named and shamed like this. This will undo the damage made by the barrage of negative articles about DRDO in mainstream dailies like ToI, Indian Express, etc.

Also, the general public must also be made aware of the technicalities involved, so that they too objectively analyse the procurement decisions made by the army and IAF.

They too should be made aware that the officers of the army and IAF are NOT Gods, whose words should be taken as gospel.

c gupta said...

Don't feel too bad Kris because if the black money from India and other countries was to be pulled out of Swiss bank you would be hunting for your post retirement benefits. Ooh yes then you would need Indians to come and visit your country. If only Kashmir was a safer place you would be denied that privilege too.