Boeing, HAL and Mahindras exploring public-private consortium
By Ajai Shukla
Business Standard, 17th Nov 17
The Boeing Company (hereafter Boeing), which is a vying strongly to supply the Indian Navy with 57 “multi-role carrier borne fighters” (MRCBF), has entered talks with Hindustan Aeronautics Ltd (HAL) to explore the co-manufacture of its F/A-18E/F Super Hornet fighter in India, say credible sources in the defence ministry.
Along with HAL, Boeing also intends to involve the Mahindra Group in building Super Hornets in India.
Boeing and HAL have already held exploratory discussions in Bengaluru in September and are scheduled to meet on Friday in Bengaluru for another round of talks. They will also finalise a “non-disclosure agreement” that binds all sides to keep their negotiations confidential.
Contacted for comments, a Boeing spokesperson responded: “HAL has been a key partner of Boeing for over two decades and today manufactures components for our commercial and defense platforms, including for the F/A-18 Super Hornet. We are continually exploring ways to expand that relationship. Needless to say, we cannot comment on specific discussions with our partners.”
The defence ministry did not respond to a request for comments.
Boeing seeks to leverage HAL’s long experience in licence-producing aircraft in India, most recently the Hawk trainer, and Jaguar and Sukhoi-30MKI fighters; and to present the defence ministry with a clear plan for co-producing the Super Hornet in India with a high indigenous content.
This would provide the US aerospace giant valuable advantage over rival vendors who partner private sector firms that are novices in aerospace manufacture.
Furthermore, Boeing’s partnership with HAL – which already has an airfield and manufacturing hangars in Bengaluru – would significantly reduce the price of each Super Hornet. In contrast, a vendor that partners a private Indian firm would need to factor aerospace infrastructure into its pricing.
Boeing has already expressed public reservations about the private sector’s inexperience in aerospace. As Business Standard reported (September 8, Boeing flags inexperience of private sector ‘strategic partners’) Boeing India chief, Pratyush Kumar, stated in New Delhi that the Indian private sector is not yet capable of manufacturing complex military aircraft under transfer of technology (ToT).
Urging India to co-opt public and private enterprise, Kumar said he “could not find a single example [of successfully building an aircraft under ToT] where it was just the brand new private enterprise with limited aerospace experience. Look at Turkey, look at Japan, look at Brazil, look at multiple countries. In all cases there is a fine balancing act of co-opting the capabilities of both public and private enterprise.”
Now Boeing is doing exactly that, by seeking to co-opt HAL and the Mahindra Group into co-producing Super Hornets.
Boeing’s public-private strategy contrasts with the approach being followed by Lockheed Martin and Saab in a separate procurement of 114 single-engine fighters, which is expected to gather momentum shortly. Since the defence ministry requires the single-engine fighters to be built in India under the “strategic partner” (SP) policy, Lockheed Martin and Saab have both partnered private sector firms – Tata Advanced Systems Ltd (TASL) and the Adani Group respectively – to build in India.
In contrast, the “request for information” (RFI) for the MRCBF acquisition, which the navy issued in January, predates the SP Policy that was promulgated only in June. Unlike Lockheed Martin and Saab in the single-engine fighter procurement, Boeing is not restricted to partnering only a private sector company.
The RFI for the MRCBF specifies: “GoI (Government of India) is desirous of license production of the aircraft after acquiring ToT in the case (sic).” While this appears to place the procurement in the “Buy and Make” category, the “request for proposals” (RFP) is likely to clarify this issue. Industry experts say the RFP might conceivably shift the acquisition into the SP category.
The Super Hornet, which is the US Navy’s main carrier borne fighter, is likely to face competition in India’s MRCBF tender from French company Dassault’s Rafale-M fighter; Swedish company Saab’s Gripen Maritime, and the Russian MiG-29K/KUB that already flies off the navy’s lone carrier, INS Vikramaditya.
The India Navy has already bought 45 MiG-29K/KUB fighters from Russia to equip its current aircraft carrier, INS Vikramaditya, and the second aircraft carrier, the indigenously built INS Vikrant, which is expected in service by 2021. A new, more capable MRCBF was envisaged for the second indigenous carrier, INS Vishal, which is expected in service by 2030 or so. However, unacceptably low serviceability rates of the MiG-29K/KUB are making the MRCBF vital for the navy in a much shorter time frame.
Furthermore, Boeing is looking beyond the supply of 57 Super Hornets to the navy, at the supply of “Made in India” fighters to the Indian Air Force (IAF) too. The IAF, which is down to 32 squadrons of fighters against its requirement of 42 squadrons, had hoped to procure six-to-nine squadrons of medium multi-role combat aircraft (MMRCA) over the last decade. The Rafale was eventually selected, but then only two squadrons were procured, leaving a void that Boeing hopes to fill by establishing a Super Hornet manufacturing line in India.