Thursday, 9 April 2015

In torpedo delay lies opportunity to build domestic industry

The Indian Navy's first Scorpene submarine, INS Kalveri, at Mazagon Dock on Monday

By Ajai Shukla
Business Standard, 9th Apr 15

The ceremony on Monday marking the “undocking” --- or completion of work --- on India’s first Scorpene submarine should have occasioned relief. Yet, naval headquarters faces the lingering question: how will the navy’s six Scorpenes fight, when their primary weapon --- the Black Shark torpedo --- is blocked by a ministry of defence (MoD) ban on the company chosen to supply them: Whitehead Alenia Sistemi Subacquel (WASS) of Italy.

WASS is a subsidiary of defence giant, Finmeccanica, which the MoD proscribed after another subsidiary, AgustaWestland, came under investigation for bribing Indian officials in securing a Euro 556 million (Rs 3,760 crore) contract in 2010, to sell the Indian Air Force (IAF) twelve AW-101 helicopters for VVIP travel.

Although the MoD has formally banned only AgustaWestland, all Finmeccanica companies effectively came under a shadow. Amongst the procurements stalled was the purchase from WASS of 98 Black Shark heavyweight torpedoes for six Scorpenes, for about Euro 300 million.

The torpedo is a submarine’s primary weapon against enemy submarines and warships. When a torpedo is fired, typically at a target 50-100 kilometres away, a battery driven propeller impels it through the water while a sensor homes in on the target. A submarine also carries anti-surface missiles, but those can be shot down; and they inflict less damage. Torpedoes blast holes below the waterline that quickly flood their targets, sinking them.

The de facto ban on WASS was formalised on August 26, 2014 in a MoD directive on dealing with Finmeccanica group companies. This ruled that procurements where a vendor has been declared L-1 (cheapest bidder), but the contract has not been signed, “shall be put on hold until further orders.”

This requires the navy to make do with 64 old SUT torpedoes that were bought a quarter century ago for its four German Shishumar-class submarines.

In July 2013 German company, Atlas Elektronik, was contracted to upgrade the SUT torpedoes and to extend their service life by 15 years. Even so, the SUT would retain their old copper wire-guidance systems that are inferior to modern torpedoes, such as those carried by Pakistan’s new Khalid-class submarines.

Yet, defence economists say this gloomy scenario provides a heaven-sent opportunity to revisit the navy’s torpedo purchase plan, which has been handled without strategic vision and economic foresight.

Underwater systems experts, including serving Indian Navy admirals, say WASS’ Black Shark torpedo --- now banned --- was always a poor choice. They say the better solution, both tactically and strategically, was the Seahake torpedo that Atlas Elektronik offered, but was controversially pushed down to second place.

Seahake advocates argue that even the Italian Navy rejected the Black Shark, instead choosing Atlas Elektronik torpedoes. As its next-generation choice, Italy has plumped for the F-21 Future Heavyweight Torpedo, that Atlas Elektronik is co-developing with French company, Thales. France too rejected the Black Shark.

With the Italian, French and German navies having rejected the Black Shark, this torpedo is fielded by only five small navies --- those of Chile, Ecuador, Malaysia, Portugal and Singapore. In contrast, Atlas Elektronik is the largest international supplier, having supplied torpedoes to 18 navies worldwide.

The MoD’s department of defence production knows that this large customer base allows Atlas Elektronik to maintain cutting-edge capability in all seven torpedo systems --- the homing head; explosive warhead; battery; electronic systems; propulsion system; wire guidance system and propellers.

In contrast, WASS outsources entire torpedo systems: Atlas Elektronik supplied the Black Shark’s wire-guidance system; a French company supplied the battery.

Therefore, a question mark hangs over WASS ability to transfer technology for manufacturing torpedoes in India. In contrast, Atlas Elektronik, which owns 99 per cent of the intellectual property (IP) in its torpedoes, is in a position to transfer technology to India for building torpedo sub-systems and integrating them into complete torpedoes.

Given the German company’s expertise across the full spectrum of torpedo technologies, and its worldwide customer base --- neither of which WASS enjoys --- the MoD and Atlas share a common interest in building in India.

India is poised to be the world’s biggest torpedo buyer, requiring an estimated 400-600 torpedoes for six Scorpenes being rolled out, six Project 75I submarines on the anvil, and 4-6 nuclear-powered submarines planned.

Instead of issuing piecemeal tenders for small batches of torpedoes, such as the 98 currently being bought for the Scorpene, the MoD can deploy an irresistible strategic offer to induce a full-spectrum vendor like Atlas to “Make in India”, in partnership with domestic high-technology companies.

“In the automotive sector, India’s massive demand for cars induced international vendors to establish manufacturing facilities here, which then became global hubs. Similarly, our torpedo requirements would surely induce Atlas Elektronik to establish major facilities in India for its global supply chain”, says an Indian defence company CEO.

Such a strategic approach would greatly benefit the Defence R&D Organisation (DRDO), which is developing an indigenous heavyweight torpedo, named the Varunastra. A strategic relationship with Atlas Elektronik would help resolve technological roadblocks in the Varunastra.

While senior MoD officials accept this logic, they say the Indian Navy remains heavily invested in the Black Shark, despite the ban on WASS. Apparently, the navy fears that restarting procurement afresh would cause unacceptable delay.

The first Scorpene would only be commissioned by mid-2016. It will now be fitted out with batteries, all its systems tested, and then put through harbour and sea trials. The next five Scorpenes will join the fleet at nine-month intervals, says the navy. An order for torpedoes would require 2-3 years to materialise.

While WASS is an Italian company, Atlas Elektronik is Franco-German. It is 51 per cent owned by ThyssenKrupp Marine Systems, with the remaining 49 per cent owned by Airbus.

The United States does not supply torpedoes, while the navy is apprehensive about Russian torpedoes, especially after the sinking of a submarine, INS Sindhurakshak, on August 14, 2013, which sources say was caused when its torpedoes exploded after a battery fire. 

17 comments:

Anonymous said...

what a farce. only the indian MOD can send submarines out to war with no torpedos. idiots.

Anonymous said...

Dear Mr. Shukla, I have been a big admirer of your work and was really pleased to realize that you were one of the very writers who could relate to the issues currently faced by Indian MOD and the Indian Manufacturing setup. You seems to have switched sides quite fast on this subject, as you yourself had written how important it was to finalize the torpedo contract in May 2014 as due to mere 1000 - 1200 crores the entire 24000 core invested in Scorpene would go waste. Now you want the MOD to rethink the entire program 13 months before the launch of the 1st Submarine, thus pushing the entire program back by 3 - 4 years. Is it National Interest??? Do you think the Indian system allows the MOD to drop a project and then without officially allowing competitive bid to go "single vendor" who is keen to partner with best technology?? The MOD has even failed in taking decision on C-295 as it turned out to be single bid on a competitive tender !!! Moreover let's assume Atlas is able to partner on paper with DRDO or some private player and is cleared by MOD, do you think it is a stitching job that can be transferred over-night? Let me explain you a simple fact, the time required for a simple "Machining component" to be cleared from design to prototype to serious production would take 20 months (if you don't believe me, then please do your homework by calling TAAL or Dynamatic Technologies). You are talking about equipment which would work under tremendous environmental pressures (Varunastra cannot dive to such depths due to this very in-capability and mind you, varunastra is not machined by DRDO in-house but also outsourced to same vendors TAAL / Dynamatic etc just like BDL). Every one is thinking today in India it is simple "cut-copy-paste", no Defence is not so easy cake walk. The French program you just mentioned is still at development stage and the reasons of switch from WASS to Atlas were different and not technological. You blame the Indian MOD for shenanigans, it is very clear your article goes against the country's national security interest. In the end what you mentioned before will happen, delays and blame game like always and suffering will allow DCNS to raise more costs. I am sure you are aware that whenever the DCNS employee's need salary hike, DCNS raises an Invoice on the Indian MOD. You are right by delaying you will help the French / Germans and may be their respective partners hike up the price but not INDIA. And in the end to probably save 100 cores India would spend 2000 crores more (very usual play). The make in India SAGA continues while the Indian Army at Siachen still buys 100 crore worth of Extreme weather clothing from Europe delivered via CHINESE factories as the stuff is so critical and "top technology" that it can't be made in Indian OFB or private industry, but simple technology like Torpedo or Submarines can be made in our backyards. As airbus said in Feb, it's not "made in India", it's Shame in India. The current government is right in their mood, but they should have started more pragmatically and intelligently, push for "all luxury goods made in India" or 100% duty, use that fund to improve infrastructure in India, and like this climb the Industrial Ladder. In the end we will make a mockery of everything like always as we lack proper planning and self-respect as Indian Citizen!! Jai HIND !!

Krish said...

Wonderful analysis. I remember reading somewhere that Atlas Elektronik was even eager to participate in Make in India campaign while supplying its Seahecht torpedoes.

Whether MoD and IN would agree is a billion dollar question.

Broadsword said...

@ Anonymous 11.39

Yes, the DPP does allow for "single vendor" procurements when justified.

I take it that your solution is to sit on the current situation where the selector vendor has been banned? That will get you operationally ready?

Anonymous said...

So India has scorpene with no torpedo & underwater brahmos with no submarine. Very soon the entire Indian Ocean will be a playground for the Shang class, Jin class, Song class, Yuan class submarines & the scorpenes will sail with no torpedo. God Bless India.

Anyways thanks for the comparison between the 2 torpedos. Also there must be comparison to see how black shark or seahake torpedoes perform against modern torpedo countermeasure systems.

Anonymous said...

The US has supplied Mk-48 torpedoes to its allies. Not sure if it is offered to India.

cujo

Deshdaaz said...

"You seems to have switched sides quite fast on this subject, as you yourself had written how important it was to finalize the torpedo contract in May 2014 as due to mere 1000 - 1200 crores the entire 24000 core invested in Scorpene would go waste. Now you want the MOD to rethink the entire program 13 months before the launch of the 1st Submarine, thus pushing the entire program back by 3 - 4 years. Is it National Interest???

Mr. Shukla,
Just as our @anon friend, I am also your long time follower/admirer. With stuck situation, how we will get operationally ready is very valid question but that does-not explain your ping-pong attitude questioned by @anon.

I take it that with Saffornites in power AND having bad blood with General VK Singh (due to past articles/utterances) PLUS his publicly known disregard/disapproval of center-of-right party, Mr. Shukla is now desperately aiming to win some hearts with his "in-house" development push articles such as this one in vain attempt to get more "Defense bites" which came easy earlier?!

Mean no offense, but that's just my theory.

Broadsword said...

@ Deshdaaz

People like you come to read me, despite your paranoias about my alleged "anti-BJP" slant. That must mean something.

Since when has suggesting a strategic approach towards torpedo tech development, which involves scuttling a UPA-decided procurement from WASS, which the BJP has endorsed, constitute being anti-BJP?

I call it being pro-India. But you're welcome to your opinion.


Parthasarathi said...

INS. Kamorta was commissioned without Barak 1!!
INS. Kolkata was commissioned without Barak 8!!
Now INS. Kalvari will be commissioned without torpedo !!
Whats wrong in it ???

Anonymous said...

can't recover a torpedo... after an exercise... forget making... a heavy one...

Kana said...

It seems important to recall that the ban against Finmeccanica group companies is rather flimsily justified, both in terms of AgustaWestland specifically given the lack of due process or legal clarity in Indian government actions stemming from that case, and certainly in cases like this which only involve other companies held by Finmeccanica... So the entire application here of "de facto" "informal" non-legally required bans should certainly be open to questioning, rather then accepting it as "written in stone" fact to which every other factor must be accomodated.

Nowhere in the article do you give a technical reason against the Black Shark torpedo or it's selection, and the comparison of customer base is obviously "apples to oranges", namely Black Shark torpedo customers vs. ALL Atlas Torpedo historic customers: Sea Hake ITSELF has only 6 customers, with one (Israel) having it's submarines paid for by Germany and thus hardly a customer with free choice... So Sea Hake and Black Shark are in fact equivalent in terms of customer selections. Also left unmentioned is that Pakistan operates Sea Hake, and obvious fact to consider when potentially operating the same type, even if not necessarily definitive.

The real issue here is the proposed linking between procurement of torpedoes for current needs, and tech transfer/development aid in future torpedo developments. Such linkage just does not really exist, because it is nearly immaterial whether the current provider also signs a ToT agreement, or another provider signs that agreement. Going ahead with ToT/JV for future development does not remove the CURRENT need for torpedoes, which Black Shark fulfills with no technical complaints. If Indian Navy cannot use it's new submarines for the purpose designed because they lack torpedoes, then it may as well sell them. Get real on what is being proposed here.

PERHAPS one can posit that Atlas may be a better ToT partner for future R&D/JV, but that JV can be tendered in a normal fashion and Atlas' merits may be judged objectively there... Although even this topic was presented in a rather slanted way focusing on WASS' dependence on suppliers, obviously overlooking that Atlas' next-gen F21 torpedo is also relying on French companies DCNS and Thales, putting it in the same boat as WASS. The concept that a less successful supplier would be MORE motivated to ensure a strong ToT project also seems to escape the remit of the article.

Anonymous said...

India would look foolish to deploy Scorpenes without proper torpedoes...

They should go immediately with Atlas Electronic Seahake or USA torpedoes through Foreign Military Sales program and also if they can transfer TOT and MOT...
India can do joint projects for next generation torpedoes...

You can't wait for Black shark or Indian manufactured torpedoe...

France will be able to change the interfaces easily...of course for a price...

So do not delay anymore as Pakistan has better capabilities with AIP an dalso 8 more coming from China...

Anonymous said...

Mr. Shukla, I am coming back to your comment that DPP does allow single vendor procurement in "special cases", similarly if you will go back in history of past few months, the current Attorney General clearly pointed out that a situation where the procurement is critical due to National Security Interest and any fall out could mean huge security gaps, the procurement should continue. Examples being Rolls Royce / Rafael / IAI / IMI etc. FYI Rafael / IAI were investigated for years by CBI but due to lack of supporting information we are still working with them.

Also do you believe that Indian MOD can go and pick single vendor situation just because "one writer" has written that Seahake is better than Blackshark? So according to you IN and all the concerned people in MOD are bunch of ignorant people having no Technical knowledge, then why you supported their decision on ITAS from Atlas? There you believe they were on the bulls-eye? Or why you think the S-70B from Sikorsky which is known to be a 70s Helicopter better than the NH-90, a project worth USD 1.5 billion (6000 crore for 16 Helicopter with a repeat option of 32 = 18000 crores). Your reply to my comment shocks me beyond doubt !!

Also are you are aware that the Legacy left by Mr. VK Singh after TATRA issue is so pathetic that now the MOD and BEML are in a situation where the TATRA (now 100% Czech) are demanding 30% higher price than the price at with Mr. RR used to sell to India? Effectively the same truck and spares should have come 25% cheaper based on the analysis of the media how Mr. RR was making truck loads of money ??? So it is ok if the Czech's make more money (under the pretext that are OEMs) but not if the Indian was the owner.

To scrap a critical project based on your analysis for scorpene project which has already cost us 24000 crore (6000 crore more than the planned outlay) and make our country mocked by PAK is better???

Your lame excuse that it's a stuck situation so let's drop it and start a fresh is not a solution. Yes unless you are on the advisory board of Atlast Marketing team. Re-starting would mean committee's to be formed (the decision on the committee formed for C-295 single vendor situation is yet to give it's reply 6 months have passed). Go through DPP, go through Finance Wing / MOF / DAC / CCS etc etc would require if best case 12 months to just issue single tender. Then opposition / claims & counter-claims. Then the hurricane task of PNC & CNC would begin which would take 12 - 20 months (Mr. Shukla 3 years have already passed we are now in 2018 and no sight of the contract, all subs are in the water but wow, they are being used for school transportation purposes).

Shocked by our -ve attitude. Sometimes it's good to take a calculated decision for the greater good than to not take any decision at all. Current government has only put FINMECANICA projects on hold which are at final stages and not blanket ban. The government is pro-active in thinking, if they will be pro-active in their action is to be seen.

Kana said...

One problem with a proposed R&D/ToT deal with Atlas based on F21 is that F21 also involves DCNS and Thales, who are in a JV with WASS for light weight torpedoes... Thus seemingly liable under the "extra legal" ban against anything that Finmeccanica owns, just like NH90. Whoops.

Deshdaaz said...

Shukla ji,

Again, I meant no offense. Just poking fun by being arm-chair conspiracy theorist while my simulations run in the background :) (What does a poor man to staring at screen at all the time!)

I care less whether you are pro-anyone or anti-everyone. What I do know is you come up with well researched analysis that makes worth spending time to read. And yes, calling you pro-India is better way to describe you. I like your articles to the point that I take 'em and translate it for Gujarati audience.

Kindly do not take comments personally. We are all pro-India dudes here :)

Jay Hind!

Anonymous said...

Broadsword's reputation will continue to be marred by such reports based on misinformation 'fed'by aggrieved parties.In this case Atlas sullied its prospects some years ago by consistently refusing to provide its Hy Wt Torpedo for full scale user evaluation and interface certification by the OEM,in this case DCNS/Scorpene.The MOD/Project 75 must now take a conscientous whether to stay the course ans proceed with the selected (WASS)system or subject the Scorpene to continued unfortunate delays.Hopefully,better sense will prevail.

Broadsword said...

@ Anonymous 12:43

I am touched by your concern for Broadsword's reputation.

Since you believe it is marred, why don't you go away and don't visit this blog. It has enough sensible people who understand the validity of an "Anonymous" comment that is plugging on behalf of a particular vendor.

Good-bye!