Thursday, 29 April 2010

INS Shivalik commissioned today, a year after Broadsword first published a detailed account of the frigate

After a year of sea trials, the INS Shivalik, the first of three Project 17 frigates being built for the Indian Navy, was commissioned into service today. Broadsword had already visited the INS Shivalik in March 2009 and published a detailed description of the Shivalik, along with exclusive photos on this blog. You can go back to the March 2009 archives for that account.

The MoD press release on the commissioning of the INS Shivalik is reproduced below.


The Defence Minister Shri AK Antony today called upon the Indian Industry to give their best in developing the country’s ship building programmes. Commissioning INS Shivalik, the first of three new stealth frigates for the Indian Navy in Mumbai, he said, over the years there has been a distinct shift in our policy from a “Buyer’s Navy’ to a ‘Builder’s Navy”.

He said the ship building industry has to modernize itself through indigenous efforts and minimize its dependence on imports. “We must continue with our efforts to transform and modernize our shipyards, so that they can not only meet the domestic demands but also achieve latest international standards in quality construction. We must be able to produce quality ships in a shorter time frame at competitive costs. I strongly urge all the participants of the Indian industry to give their best in developing our ship building programmes”.

He said time and again history has taught us to maintain a strong and vigilant navy. “Our maritime heritage dates back to the ancient times. Though we have come a long way in re-establishing our capabilities on the high seas since our independence, we still have a lot to achieve before we can consider ourselves a really potent naval force. History has time and again held out lessons in maintaining a strong and an eternally vigilant Navy”, the Defence Minister said.

Shri Antony said the security situation in and around our immediate neighbourhood poses several security related challenges. He reiterated that we have to maintain high levels of operational readiness at all times.

Shri Antony described the commissioning as a red letter day for the Indian Navy, our Armed Forces, the ship building industry and the entire nation. He said India’s long coastline and ever expanding exclusive economic zone make it imperative to defend our main land as well as maintain the sea lanes of communication. With the commissioning of the stealth frigate, he expressed confidence that the maritime interest will further secure.

INS Shivalik and the follow-on-ships of the Shivalik class (namely, Satpura and Sahyadiri) have been conceived and designed by Indian Navy design teams. The Shivalik class will be the mainstay frigates of the Indian Navy in the first half of the 21st century.

The incorporation of numerous new design features aboard INS Shivalik effectively reduces the probability of her being detected at sea. The in-built structural, thermal and acoustic stealth features augment the potent capability of the ship to address threats in all dimensions of maritime warfare.

The weapon-sensor fit of the Shivalik is controlled through a Combat Management System called ‘CMS-17’, designed and developed by the Indian Navy and manufactured by Bharat Electronics (Ghaziabad). The system allows the seamless integration of the ship’s systems as well as with the weapons and sensors of other Fleet ships, thus enabling the concept of ‘Co-operative Engagement Capability’ (CES). With her ability to detect and engage surface, air and sub-surface assets of the enemy at extended ranges, this ship represents very significant combat-potential.

With modern LM 2500 Gas Turbine propelling her to speeds in excess of 30 knots (or over 55 kmph), the ship is a true greyhound upon the seas. The ship’s electric power is provided by four Diesel Alternators, which together produce 4 Mega-Watts of power – enough to light-up a small town. The power generation and distribution on board is controlled through an ‘Automated Power Management System’ (APMS), which enables the optimal use of electricity at all times. The two Multi-Role helicopters that would be embarked on Shivalik will provide for enhanced surveillance and attack capability.

The Shivalik is also equipped with a proven defense against Nuclear, Biological and Chemical attack. The state-of-the art ‘Total Atmospheric Control System’ (TACS) ensures filtration of the air going into the ship at all times. In addition, it ensures the complete removal of radioactive, chemical or biological impurities, thereby protecting the crew and shipborne systems even when operating in areas contaminated by nuclear, biological or chemical agents.

The ship’s domestic requirements of fresh water are met through two Reverse Osmosis plants, while a fully automated galley, ensures that the crew can be fed Indian, Continental and Asian meals, including freshly baked bread and home-made ice cream.

The accommodation arrangements for the 35 officers and over 250 crew members of the Shivalik has been provided by M/s Godrej, whose advance ergonomic design ensures crew comfort and space management.

Among those present at today’s ceremony included the Chief of Naval Staff Admiral Nirmal Verma, the Defence Secretary Shri Pradeep Kumar, the Secretary Defence Production Shri RK Singh, the Chairman and Managing Director of Mazagon Dock Limited Rear Admiral (Retd) HS Malhi, Defence Attaches and Consul Generals of different Countries.

Friday, 23 April 2010

Tejas LSP-3 makes a successful first flight: DRDO says Initial Operational Clearance on track for Dec 2010

A press release from the DRDO is attached below:


Limited Series Production (LSP) # 3 aircraft is the ninth test vehicle to join the flight line to undertake development flight trials of the Light Combat Aircraft Tejas towards operational clearance for induction in the IAF by the end of the year. Successful, copy book maiden test flight of LSP-3 is significant on many counts.

The LSP-3 is a quantum jump in terms of the equipment fit on the aircraft. It is almost the final configuration including the new air-data computers, Multi Mode Radar, new communication and navigation equipment and radar warning receiver. With this successful flight, the LCA (Tejas) programme is very close to the Initial Operations Clearance, which is to be completed by December 2010. The remaining effort is mostly the flight testing and demonstration of sensors and weapon performance.

The test aircraft was flown by Wg Cdr G Thomas, VM of the National Flight Test Centre (NFTC) at ADA. As per procedure the first flight was accompanied by a chase aircraft which was a Tejas Trainer flown by Gp Capt RR Tyagi, the Chief Test Pilot and Wg Cdr (Retd) PK Raveendran SC, the Group Director (Flight Test). The test flight was conducted from the Telemetry station by the Test Director, Wg Cdr S Toffeen, under the supervision of Air Cmde Rohit Varma VM, the Project Director (Flight Test). The flight took off from HAL airport in Bangalore and all the objectives of the flight were met within the duration of 52 minutes.

With this flight the total number of test flights accumulated across nine test vehicles of the Tejas programme has reached one thousand three hundred and fifty and has logged about 800 hrs of flight.

On the successful flight of the LSP-3 Director – ADA, Mr PS Subramanyam has said that this is the “culmination of the efforts of the Tejas Team comprising of members from HAL, IAF, CEMILAC, DG-AQA, DRDO labs, PSUs, coordinated by ADA”.

Thursday, 22 April 2010

MoD blames BAE Systems in parliament for the Hawk production delay

Seven and a half months after Broadsword reported (on 2nd Sept 09) that HAL squarely blamed BAE Systems for the delays in producing the "raw" (i.e. built from ground up, as opposed to built from CKD or SKD kits) Hawk trainers in India, the MoD today corroborated what HAL Chairman, Ashok Nayak, told me in August. The statement made by the MoD in parliament today is appended below.

When that article was going to press BAE Systems called me up and vociferously denied anything to do with the delays. They also denied it in writing; my article carried in my article. Go back to 2nd Sept for another look.




New Delhi: Vaisakha 02, 1932

April 22, 2010

Delivery of 42 (Hawk-AJT) aircraft was scheduled from 2007-2008 to 2010 – 2011 in a phased manner. Three aircraft were to be built from semi-knocked down (SKD) kits, three from completely knocked down (CKD) kits and 36 from raw material phase. The CKD and SKD kits were assembled on schedule. When production in raw material phase was taken up, it was found that the equipment supplied by the OEM had various shortcomings. The assembly jigs that were supplied did not meet the requirements, there was mismatch in the kits/components supplied, there were defects in major assemblies like the wing spar etc. These problems took time to overcome and hence affected the production schedule at HAL.

HAL has manufactured 12 aircraft till now, three in the year 2008-2009 and nine in the year 2009-2010, including the first aircraft from raw material phase. The Air Force is not facing any acute shortage of trained pilots and the delay in delivery schedule of AJTs by HAL is not affecting the Air Force. Indian Air Force is meeting its requirement by utilizing the existing resources for training of pilots

This information was given by Minister of State for Defence Shri MM Pallam Raju in written reply to Smt Mohsina Kidwai in Rajya Sabha today.

Tuesday, 20 April 2010

India’s next big scam…

by Ajai Shukla
Business Standard, 20th Apr 10

Move over artillery gun deals… stamp paper… fodder and other scams! India’s pinnacle of subterfuge will soon belong to a new hustle called offsets through which pliant Indian defence manufacturers are set to ride to riches. Setting the stage for this shakedown is a disinterested Ministry of Defence, which has artlessly authored a scamster’s delight called the Defence Offset Procedure.

To recapitulate, the MoD’s procurement regulations (currently the Defence Procurement Procedure of 2008, or DPP-2008) impose a minimum offset of 30% in all contracts worth Rs 300 crores or more. Foreign arms vendors must discharge this liability through the purchase of products or services from Indian defence companies; or through investments into the infrastructure of JVs they set up in India; or through investment into Indian R&D organisations. In all cases, the essential first step is for foreign vendors to identify an Indian partner through which offset obligations will be discharged.

Viewing this through a more cynical and realistic prism, unscrupulous foreign vendors (most of whom regard offsets as state-legitimised extortion) are starting by identifying pliable Indian partners that will happily partner them in neutering the offset requirement. The DIPP confirms that rafts of small companies, many without a track record in defence, are applying for licenses.

To get an idea of the money at stake here, a recently released CII-KPMG report estimates that India will buy foreign weaponry worth some US $100 billion (Rs 4,50,000 crores) over the next 12 years. Going by this extremely conservative estimate (actual figures could be 50% higher), Indian defence companies will have to anchor at least US $30 billion (Rs 1,35,000 crores) in offsets business by 2022. That averages out to about Rs 11,000 crores every year.

So how will the skulduggery be structured? Let’s look at a hypothetical offsets tie-up between a hypothetical foreign company --- let’s call it Shipping, Communications and Munitions International, or SCAM International --- and an equally hypothetical small Indian company called 15% Partners. Each year, SCAM International will hand the MoD an offsets compliance certificate, along with a copy of an invoice from 15% Partners, as proof that goods worth US $100 million were manufactured and shipped by the Indian company. Actually, the goods were worth only US $35 million, but both companies had quietly agreed that 15% Partners would hold the excess amount on behalf of SCAM International. The Indian company is entitled to a fee of --- you guessed it --- 15% for its services. That means 15% Partners now has effective custody of US $50 million on behalf of SCAM International.

“The implications of this are frightening”, a senior defence ministry official apprehends. “A few years down the line, all defence kickbacks will be coming through the route of offsets. Currently, there is tight control over the money that foreign companies can bring in. Now Indian offset partners will become the agents that pay out bribes. That is why so many offset deals are being tied up with small and medium companies.”

Other ingenious stings are being fashioned out of offset partnerships. One foreign company has already asked its Indian offsets partner to start paying all the expenses for its executives visiting India. The costs of tickets, hotels, meals and entertainment will all be adjusted through over-invoicing offset supplies.

Making all this feasible is the MoD’s inertia in setting up the systems needed for tightly monitoring offset transactions. Currently a small, undermanned section --- the Defence Offsets Facilitation Agency (DOFA) --- handles everything relating to offsets. A section of the MoD argues for setting up an expanded, high-power, multi-agency Defence Offsets Management Agency (DOMA) that is equipped to minutely evaluate the impending flood of offsets proposals; keep a running account of banked offsets; and interpret and clarify offsets policy. But South Block continues to shy away from framing a holistic offsets policy.

“Are you surprised that they are leaving open loopholes?” asks a senior executive from a global arms corporation. “Who do you think will benefit from the kickbacks when they pick up momentum?”

Keeping a track of offsets is even more difficult when they are executed in Information Technology and services. But the MoD has not set up any specialist organisation, or even obtained specialist advice, for monitoring these fields.

Four years after offsets were announced their purpose remains a matter of speculation. The MoD has never declared whether offsets are meant to generate employment in the defence sector through mass manufacture; or to encourage high-tech R&D through collaborative ventures; or to bring in foreign direct investment (FDI) into the defence sector. South Block will probably avow that it wants all three. In this policy vacuum, vendors will naturally structure offsets to suit themselves rather than Indian defence industry.

Within the MoD there is disquiet; many bureaucrats fear that offset scams will have the potential to end promising careers. But there is little expectation that Defence Minister Antony, with his unblemished record of policy paralysis, will allow clarity to creep in unnoticed. And so bureaucrats are passing the buck. The Department of Defence and the Department of Defence Production are each trying to make the other responsible for offsets, hoping that, when the music stops, they will not be holding the parcel.

Monday, 19 April 2010

INS Kamorta, the first Project 28 Anti-submarine Corvette, launched at Garden Reach Shipbuilders and Engineers (GRSE) today

Ms Mamatha M, the wife of Minister of State for Defence, Dr MM Pallam Raju, unveils the plaque for INS Kamorta

INS Kamorta, the first Project 28 anti-submarine corvette in the water after its launch at GRSE today

INS Kamorta, just before its launch at GRSE

Defence Press Release

Mrs Mamatha M, wife of Shri MM Pallam Raju, Hon’ble Raksha Rajya Mantri, today launched first of its kind Anti Submarine Warfare(ASW) Corevette at GRSE shipyard in Kolkata. Shri MM Pallam Raju, Mr Asim Kr Dasgupta, Hon’ble Minister of Finance & Excise, Govt of West Bengal, Shri RK Singh, Secretary of Defence Productions and Vice Admiral Anup Singh were present on this occasion.

The ASW Corvette belongs to the Kamorta Class of Warships with Anti Submarine Warfare capability and very low signature of radiated under water noise. This Corvette is designated to be a frontline warship for the Indian Navy. This ship is equipped with Sophisticated arrangement for mounting Ships machinery. The weapon Systems and sensor suits of this ship are fully indigenous. The ‘X’ form of hull and superstructure gives her a low radar cross section. The Ship’s hull form has overall length of 109 mtrs and can cut through the sea at a very high speed of 25 knots. She is built with special grade high tensile steel.

The propulsion system of the ship typifies power combined with flexibility and consists of two controllable pitch propellers. It has four indigenously made Diesel engines each of 3800 kw. The ASW Corvette is 13.7 mtrs wide. Four ASW Corvettes are presently under construction at GRSE.

The launching of this ship marked the completion of 50 years of GRSE’s glorious existence. Though it was set up in year 1884 as a private enterprise named Garden Reach Workshop Ltd, it was taken over by the Govt of India and placed under administrative control of Min of Defence in 1960. Since then the company has come a long way with steady expansion of infrastructure, keeping pace with time and catering to defence preparedness of the country.

Today the ship yard has six manufacturing units in and around Kolkata and one at Ranchi. GRSE is committed to building warships of highest standards for Indian Navy and Coast Guard. The Company is modernizing its infrastructure at an estimated cost of over 530 crores rupees. This includes building a large Dry Dock and an inclined berth, a 250 tonnes Goliath Crane and modular halls with allied workship facilities.

Singapore gun arrives today; stage set for artillery trials

The Singapore Technologies Kinetics (STK) 155mm, 52 calibre gun in action. This gun is facing off against the BAE Systems FH77B 05 for the Indian towed howitzer contract

The IFH-2000 being loaded onto an aircraft. The gun will be landing in Delhi today, from where it will be taken to the Punj Lloyd engineering facilities in Gwalior

The IFH-2000 being fired by a gun crew from Punj Lloyd, the Indian partner of STK. Punj Lloyd will get a significant share of the manufacture if the IFH-2000 is selected by India

by Ajai Shukla
Business Standard, 19th Apr 10

With artillery having killed more soldiers during the last century than any other battlefield weapon, the decade-plus delay in equipping the Indian Army with modern artillery guns is widely considered a major procurement lapse. The stop-start-stop process of buying 1580 towed guns for the Indian Army will effectively restart today when a C-130 Hercules aircraft lands in New Delhi, carrying a 155 millimetre artillery gun for trials this summer.

This gun, the Indian Field Howitzer – 2000 (IFH-2000), developed by Singapore Technologies Kinetics, or STK, is competing for the Indian tender with British company BAE Systems’ FH-77B-05, a derivative of the controversial and respected Bofors gun. The lower-profile IFH-2000 is the world’s first 155mm 52-calibre howitzer, which the Singapore Armed Forces have used for over a decade.

A 52-calibre howitzer fires heavier shells than older, 39-calibre and 45-calibre guns, inflicting greater punishment on the target. The Indian tender for towed guns specifies that only 52-calibre guns will be evaluated.

Trials for procuring 155 mm, 52-calibre towed guns began in summer 2002, when the MoD began evaluating three guns from BAE Systems; Israeli firm, Soltam; and South African company, Denel. Five rounds of trials, conducted in 2002; 2003; 2004; and 2006; reached no conclusion. Denel was blacklisted for corruption in Sep 05; the other two guns did not meet the army’s standards.

The trials remain dogged by controversy even after a fresh tender was issued in 2008. Last year, one of the two contenders, STK, was unofficially blacklisted for corruption after the arrest of former Ordnance Factory Board (OFB) chief, Sudipta Ghosh. But CBI investigations have made no apparent headway in the past year; not even a charge-sheet has been filed against Sudipta Ghosh. Now, STK has been asked to field its gun for trials.

STK plans to start preparing for the impending trials by practicing firing at the Pokhran ranges using Indian ammunition and a crack gun crew of seven former Indian Army artillerymen, recruited by STK’s Indian partner, Punj Lloyd Ltd.

The BAE Systems gun, too, is in India, having been brought for the Defence Expo in February and for trials scheduled immediately after that. But those trials were postponed when the IFH-2000 was damaged in Singapore while being loaded into an aircraft for despatch to India.

“Punj Lloyd is STK’s Indian partner for the 155 mm gun”, explains Patrick Choy, STK’s international marketing chief. “STK will rely on them for logistics and engineering support during the trials; and if STK is awarded the contract, we will manufacture a substantial part of the gun at Punj Lloyd’s facilities near Gwalior.”

STK’s rival in this tender, BAE Systems, has a similar arrangement with its Indian partner, Mahindra & Mahindra. These two companies have formed an Indian joint venture, Defence Land Systems, with Rs 100 crores equity held on a 74%-26% basis between Mahindra & Mahindra and BAE Systems.

At stake in the forthcoming trials is an order, worth US $1.8 billion (Rs 8000 crores), for the outright supply of 400 towed guns; and the licensed production in India of another 1180 guns. If the MoD imposes even the minimum offset requirement of 30%, that would translate into US $540 million (Rs 2400 crores) worth of manufacture within India.

STK and BAE Systems are also vying for a US $700 million (Rs 3100 crores) contract for 140 ultralight howitzers (ULHs) for Indian mountain divisions.

Two more artillery purchases are simultaneously in the works: a US $800 million (Rs 3500 crores) order for 100 medium guns, mounted in tracked vehicles, for self-propelled (SP) medium regiments that go into battle with India’s strike corps. Another US $900 million (Rs 4000 crores) will buy 180 vehicle-mounted guns for more SP regiments.

The stakes are high for everyone involved. For BAE Systems, this is an opportunity to bury the stigma of the Bofors scandal; for STK, this is a golden opening into the lucrative Indian market; and for the Indian Army, desperately short of artillery firepower, this is a chance to fill a gaping operational void.

Wednesday, 14 April 2010

Army to order more Arjun tanks

New Arjuns will fire LAHAT anti-tank missiles and be fitted out with two tonnes of slap-on extra armour protection

by Ajai Shukla
Business Standard, 14th Apr 10

The success of the indigenous Arjun main battle tank (MBT) in desert trials last month is generating additional army orders for a tank that is emerging as a notable R&D success. Meanwhile, the Arjun is becoming more capable; the Defence R&D Organisation (DRDO), which designed the Arjun, says that all future Arjuns will incorporate major improvements, including the ability to fire missiles.

Business Standard had reported (Arjun tank outruns, outguns T-90, 25th Mar 10) that the Arjun tank had conclusively outperformed the Russian T-90 --- the army’s current frontline MBT --- in trials conducted in early March by the Bikaner-based 180 Armoured Brigade. 

The army is still evaluating that trial report to decide how many additional Arjuns it should order, over and above the existing order of 124 tanks. But the question before the army is no longer whether to order more Arjuns; rather, it is how many to order? Highly placed Ministry of Defence sources confirm that the army is moving away from its staunch opposition to the Arjun. 

The DRDO, meanwhile, is working overtime to sweeten the deal. Dr S Sundaresh, the DRDO’s Chief Controller for Armaments and Combat Engineering, has told Business Standard, that all Arjuns now ordered will fire anti-tank guided missiles (ATGMs) through the tank’s main gun; provide extra protection for the tank’s crew through explosive reactive armour, or ERA; be fitted with thermal imaging panoramic sights that allow the Arjun’s commander to scan his surroundings even by night; and incorporate at least seven other improvements over the current Arjuns. 

“We had test-fired the Israeli LAHAT missile through the Arjun gun as far back as in 2005”, pointed out Sundaresh. “It will take us about six months to integrate the LAHAT’s designator into the Arjun’s fire control system.”

The addition of two tonnes of ERA will increase the weight of the Arjun to just over 60 tonnes, making it one of the world’s heaviest tanks. But the DRDO claims that its powerful 1500 Horse Power engine easily handles the extra weight.

“The ERA will protect the Arjun’s crews from enemy missiles. Initially we will fit the same Russian ERA that protects the T-90 and the T-72. But we will also develop our own indigenous ERA.

An early order from the army would be crucial, says the DRDO, for continuity in the Arjun production line at the Heavy Vehicles Factory (HVF) near Chennai. The current order of 124 Arjuns will occupy the production line until end-2011. For the next order of Arjuns to hit the production line then, the order would have to be placed now. That would allow 18 months for provisioning of components, such as armour sheets and sub-systems that are manufactured by ancillary suppliers. That period also caters for the purchase of foreign systems, e.g. the engine from MTU, Germany.

“Continuity is vital for quality control”, explain officials from HAV Avadi. “We have instituted systems for quality control in the current order of Arjuns, which is why they performed so reliably during trials. These systems will wither away if the production line shuts down for lack of orders.”

Since the Arjun’s assembly takes 12-18 months, a fresh order of Arjuns will start being delivered 30-36 months after the order is placed. Thereafter, HVF will deliver 30 Arjuns per year if it operates with just one shift of workers; 50 tanks per year with two shifts.

Monday, 12 April 2010

MoD will block 100% FDI in defence

by Ajai Shukla
Business Standard, 12th Apr 10

The Ministry of Defence (MoD) plans to oppose the Ministry of Commerce and Industry (MoCI) proposal to allow foreign defence corporations to establish fully owned defence units in India. The MoD apprehends that raising the FDI cap significantly would seriously damage India’s nascent defence industry, particularly the 8 MoD-owned defence public sector undertakings (DPSUs).

“The Commerce Ministry cannot raise the FDI cap without first consulting us, and we will definitely not allow 100% FDI anytime soon”, a senior MoD official told Business Standard on condition of anonymity. “We have already rejected two applications for setting up Joint Venture companies with 49% FDI. Where is the question of allowing 100% FDI?”

The first application the MoD rejected was that of a proposed JV involving Mahindra Defence Systems (74%) and UK-based BAE Systems (26%); the second rejection involved L&T (74%) and Franco-German corporation, EADS (26%).

The new Consolidated FDI Policy, effective from 1st Apr 10, enunciates the current FDI limit of 26%. But the MoCI’s Department of Industrial Policy & Promotion (DIPP) is lobbying actively for raising this limit.

The DIPP Secretary, RP Singh, explained the MoCI’s rationale to Business Standard on Saturday. “We are very focused on the defence sector. As an industry department we realise that if the defence sector is opened to FDI, its impact upon the manufacturing sector in India will be very great. Foreign defence majors will be more likely to bring in sensitive technology if you allow them higher FDI. Defence production requires technology, and also huge capital investments. If we can address security concerns, there is a chance of opening it up to 100%.”

Mr Singh revealed that the DIPP had already sent a written proposal to the MoD after preliminary discussions. The DIPP letter proposes greater foreign equity in defence JVs, but does not suggest a specific FDI level.

“Things are still at a discussion stage. Our stance will get crystallised after we discuss and only then will the Government of India change the policy”, pointed out the DIPP Secretary. “My personal view is that 100% FDI should be allowed; but all stakeholders will contribute to the final decision.”

The MoCI claims that Indian private defence manufacturers, such as L&T and the Tata Group, support the raising of FDI caps in order to allow a larger share to foreign companies. But Business Standard has learned that R&D-oriented private sector companies are apprehensive that global majors will use their Indian subsidiaries to get the MoD to fund the development of weapons systems under the “Make” category of the Defence Procurement Policy of 2008 (DPP-2008).

The DPP-2008 allows any Indian company --- and a 100% Indian subsidiary of a global major would be eligible for this --- to receive funding from the MoD for developing defence platforms under the “Make” category. The MoD has undertaken to fund up to 80% of the development cost, with the private vendor paying just 20% of the development cost.

“With defence budgets coming under severe pressure in the west, what better way of obtaining funding than setting up a 100% subsidiary in India that can draw from the Indian MoD”, asks the CEO of a prominent private sector defence company. “It would be entirely legitimate, and it would wipe out the Indian defence manufacturers entirely”.

For smaller, less R&D-oriented Indian defence manufacturers, however, a raise in FDI caps would come as a blessing. This would allow them to benefit from borrowed technology and also reduce capital costs in setting up new manufacturing units.

The MoD’s opposition, however, to increasing FDI caps stems from the fear that the entry of large private manufacturers will lead to job losses with DPSUs and Ordnance Factories. The DIPP counters that foreign vendors are likely to partner the defence public sector in setting up manufacture.

Speaking to a CII gathering on 1st April, the DIPP Secretary said, “If full investment comes here, [the foreign vendors] are not going to manufacture everything themselves. Lot of it will be outsourced from the Ordnance Factories. The kind of infrastructure that they have got… they have the best CNC machines; huge land; a good work force; only thing is that they are not in a position to source technologies from outside.”

Since 2001, when the private sector was allowed into defence manufacture, there has been a cap of 26% on Foreign Direct Investment (FDI) in defence. The government’s Economic Survey for 2008-09 had flagged the possibility of raising this to 49%. The US government and industry bodies like the US-India Business Council (USIBC) have also lobbied for raising the cap to at least 49%.

Friday, 9 April 2010

Lessons from the Dantewada debacle: training, not threats

Brigadier BK Ponwar, who established and still heads the Jungle Warfare College in Kanker, Chhattisgarh. This photo is from his days at the army's Counter Insurgency and Jungle Warfare School

by Ajai Shukla
Business Standard, 9th Apr 10

It has been 44 years since that forgettable incident when New Delhi --- for the first and only time --- used its air force against its own citizens. With the Mizo National Front rampaging through Mizoram in 1966, the government warned that any Mizo who did not relocate to designated safe villages would be treated as a rebel. On the heels of that announcement came the Indian Air Force, bombing and machine-gunning stretches of jungle. Resentment against that indiscriminate killing, in which innocent Mizos died, sustained the insurgency for years thereafter.

Home Minister P Chidambaram’s warning, after the killing of 75 men of the 62nd Battalion of the Central Reserve Police Force (CRPF) in a Naxal ambush on Tuesday was put into context by an alarmed IAF chief, who clarified quickly that air power was a blunt weapon ill-suited for discriminating between insurgent and innocent. Mr Chidambaram’s words, however, linger as a reminder that the Home Ministry still considers --- as it did after the terror strike on Parliament in 2001, and the Mumbai attack of 26/11 --- that bluster and threat are convenient tools for masking abysmal security failures.

The CRPF’s operational debacle has transformed Operation Green Hunt: the hunter now seems the hunted. In the first three months of this year, 42 naxal rebels had been killed in Bastar at the cost of 4 policemen’s lives. In innumerable small operations, the state police and central police organisations (CPOs) had engaged and bested Naxal dalams; after this disaster, Naxal morale will be revitalised.

The Naxals’ dwindling strength before this week was also evident from the statistics of Improvised Explosive Device (IED) attacks mounted by them over the last three years. In 2007, Chhatisgarh experienced 76 IED attacks; the next year, it was down to just 58; in 2009, the Naxals could successfully detonate only 29 IEDs. But Tuesday’s fiasco has made this depleted organisation look powerful enough to have the Prime Minister threaten that all options remain on the table.

A key reason for the CRPF’s dismal response to the Naxal attack has been their lack of training. As CPO units poured into Chhattisgarh for Operation Green Hunt, 5 battalions of the Border Security Force (BSF), 5 battalions of the Indo-Tibet Border Police (ITBP) and 2 battalions of the Sashastra Seema Bal (SSB) were all put through jungle warfare orientation courses at Chhattisgarh’s well-reputed Jungle Warfare College in Kanker. The CRPF, inexplicably, refused to undergo this training. Neither did CRPF HQ in New Delhi order them to do so; nor did the Home Ministry.

Training at the Jungle Warfare College, as every organisation except the CRPF seems to have known, has underpinned anti-naxal operations in Chhattisgarh since 2005, when the college was set up with the help of the Indian Army. Over the last five years, Chhattisgarh has trained 12,700 policemen (including 3700 from other states) at this institution. The college’s credo: fight the guerrilla like a guerrilla.

A senior official of the Chhattisgarh Police has pointed out to Business Standard that the CRPF has the worst record of all the police organisations that are conducting counter-Naxal operations in that state. “CRPF columns have often got caught in Naxal ambushes; many of the Naxals’ recent successes are against the CRPF.”

Instead of providing adequate training to each battalion that is sent into counter-insurgency operations, the CRPF has relied heavily for success on “elite” units, like its feared “Naga Battalion” which was based in Bastar for several years before being pulled out. In 2008, the Home Ministry authorised the CRPF to raise 10 COBRA (Commando Battalions for Resolute Action) units, for counter-naxal operations. But the regular battalions remain largely untrained, pushed at will from election duty, to counter-insurgency, to patrolling riot-affected areas, to anti-Naxal operations. The Home Ministry’s approach has always centred on getting the CRPF to the trouble-spot. After that, it is left to the harried battalion or company commander to deliver the goods.

The answer clearly lies in carefully training CPOs, especially before they go into counter-insurgency operations. The advantages are evident of stiffening the CPOs by laterally inducting retiring military jawans. Even without that boost forces like the CRPF are better equipped and armed than the Naxals that they confront. It is the Home Ministry’s job to ensure adequate training and then holding the force accountable for debacles like the recent one that sets back a campaign by years.

Tuesday, 6 April 2010

Soldier, heal thyself

India's new Chief of the Army Staff (COAS), General VK Singh, has promised to focus on the "internal health" of the Indian Army. He has his task cut out for him.

by Ajai Shukla
Business Standard, 6th Apr 10

Figuring out the state of an army’s morale is easy. All it takes is a couple of drinks with two groups of people: the officers and the enlisted men. If the chatter is mainly about sports and professional competitions; ongoing training; and about how much tougher and smarter they are than their rival units, morale is high. On the other hand, if talk centres on pay and allowances; promotions and postings; and on the world outside the army, you can bet money that morale is low. Applying this yardstick to the Indian Army I believe the morale of officers is low, while that of the jawans is high.

In this gloomy assessment I have illustrious company. The new Chief of Army Staff, General VK Singh, on assuming office on the 1st of April, has wisely identified the army’s “internal health” as his key focus. Pointing out that an internally vibrant army would easily swat aside external threats, the army chief has promised to revitalize traditions, core values and the army’s ethos.

Earlier chiefs, some as well-intentioned as General VK Singh, have embarked on similar paths. General K Sundarji, on taking over as chief in 1986, wrote to army officers individually, urging them to follow their professional convictions and promising to tolerate dissent. But that led nowhere as actions failed to follow words. Today, as the new chief implicitly accepts, the army has become a personality cult where officers either conform to the inclinations of the boss or get weeded out. Originality and eccentricity, those priceless attributes of a successful military leader, have been rendered extinct by a dull, humourless routine that is set --- Congress Party fashion --- by what the boss thinks his boss wants.

Keeping the officers in line is a terrible God called the Annual Confidential Report before which even the brightest and most capable officer must kneel or be scythed down. While annual reports are an evaluation tool in many professions, the army has accorded the ACR absolute control of an officer’s career. Considering that this primacy is born of the army’s laudable quest for an impartial, empirical evaluation system, it is ironic that the ACR has turned into a monster of subjectivity. If the boss is unhappy with an officer --- for any reason whatsoever --- a single lukewarm ACR can sink a brilliant career.

Dismantling this tyranny, and unlocking the potential of his officer corps, is the task ahead for General VK Singh. This is easier said than done. Blocking any radical change is the tribal ethos of the Indian Army. An officer belongs first to his regiment or battalion; only after that is he an Indian Army officer. An army chief’s first duty is towards the regiment and battalion that nurtured him; reforming the army conflicts with the role of regimental patriarch.

When General JJ Singh, an infantry officer from the Maratha Light Infantry, took over as chief, the honour guard that welcomed him to South Block was from the Marathas. So was his aide-de-camp and most of his personal staff. During his term Army Headquarters strengthened the infantry-friendly promotion policies of his infantry predecessors. The tenure of his artillery successor, General Deepak Kapoor, saw the Corps of Artillery quickly muscling out the infantry as the flavour of the month. Promotion policy tilted in favour of the artillery. Upwardly mobile artillery officers were quickly posted into friendly environments, under “friendly” superiors, to ease their paths towards higher rank.

These are only the most recent examples of the army’s longstanding patriarchal tradition that General VK Singh can now embrace or dismantle. A key step would be the creation of a clearly enunciated promotion policy, printed as a manual and sanctioned by the government, to ensure that each successive chief cannot tinker with the policy to suit his constituency. Today, 63 years after independence, the military has no promotion manual; policy exists only in a constantly revised torrent of letters from the Military Secretary’s branch.

The other major change that General VK Singh could implement is the reversing of promotion quotas to higher rank: the “Mandalisation” of the army as it is evocatively referred to. From the institution of the Prussian General Staff in the early eighteenth century, professional militaries have employed the criterion of merit alone to select their senior command. For over half a century, so did the Indian Army; but recently, in a burst of patrimonial fervour, quotas were instituted to ensure that each combat arm got its share of the senior ranks. Initiated by artillery and infantry chiefs to safeguard the interests of their officers, the quotas are now favouring less talented officers of other arms.

Few chiefs would voluntarily divest themselves of power but, paradoxically, the institution of the COAS would be greatly strengthened by transparency and the absence of discretion in promotions and postings. It would also free army chiefs from accusations of prejudice; a lever that MoD officials --- and in one well-known case, a defence minister --- have successfully employed to demand favours for their own candidates.

Monday, 5 April 2010

IAF training crisis: scrabbling for solutions

The German Grob 120 trainer, in use with several air forces worldwide, including the RAF

The Embraer Tucano, a more powerful aircraft than the Grob 120. A version of this, called the Short Tucano, is in service with the RAF as a Stage-2 trainer

Two Pilatus PC-21 trainers flying in formation over the Swiss alps

by Ajai Shukla
Business Standard, 5th Apr 10

The Indian Air Force’s crisis in training its pilots saw a farcical twist recently when an Egyptian diplomat posted in India helpfully offered Cairo’s assistance. The Egyptian Air Force, he suggested to a senior IAF officer, could send a training team to Hyderabad, along with several of its trainer aircraft, the K-8 Karakorum. Was the Egyptian aware that the Karakorum trainer has been jointly developed by Pakistan and China? Nobody is certain but, since the offer was not followed up in writing, the IAF was spared the embarrassment of having to reply.

Even as the IAF spends billions of dollars in a global shopping spree for fighters, helicopters and transport aircraft, the training of pilots to fly them has been practically stalled since last July. That was when the IAF’s notoriously unreliable basic trainer, the HPT-32 Deepak, was grounded after a horrific crash that killed two experienced pilots. In 17 Deepak crashes so far, 19 pilots have died.

The Deepak, as the IAF has long known, has two major design flaws. When it flies upside-down the flow of fuel gets blocked, shutting down the engine; and, since the Deepak cannot glide without engine power for even a short distance, a serious crash in inevitable.

The IAF’s concern is evident from the radical methods it is exploring. It now proposes to fit each Deepak with an enormous parachute that opens when the engine shuts off, bringing down the aircraft slowly with the crew still in their seats. Hindustan Aeronautics Limited (HAL), which manufactures the Deepak, is being asked to fit a number of trainers with this Ballistic Recovery System (BRS). It remains unclear whether the Deepak has the structural strength to support a BRS.

Meanwhile, improvisation governs training. After evaluating and ruling out several options --- including training IAF flight cadets in civilian flying clubs; or handing over training to foreign contractors on a “Power by the Hour” payment basis --- the IAF is now putting absolute rookies into the relatively complex, jet-engined Kiran Mark-1 aircraft for their very first taste of flying. The Kiran, too, has a dubious safety record with 13 serious crashes over this last decade.

Before the Deepak was grounded, it took 80 hours of basic training on that aircraft before selected cadets --- only those found fit to become fighter pilots --- graduated to the Kiran Mark 1. The third stage of training was on the Kiran Mark-2; which the Hawk Advanced Jet Trainer (AJT) is gradually replacing. After those three stages of training, IAF pilots graduated to the frontline fighters that they would fly into battle.

“Conducting basic training on a jet aircraft is risky”, admitted a senior IAF decision-maker to Business Standard. “But what choice do we have? The air force must have pilots to fly its planes.”

In fact, the IAF has several good choices, but all of them are some time away. To replace the “Stage-1” Deepak trainer, the MoD has approved the fast-track purchase of 75 aircraft from the global market. Requests for Proposals (RfPs) have gone out to ten aircraft manufacturers. The hot contenders include the Pilatus PC-21 (Switzerland); Embraer Tucano (Brazil); and the Grob (Germany). Bids are due before 14th April, but the aircraft will be delivered only by 2013-14.

For “Stage-2” training, i.e. to replace the Kiran Mark-1, HAL is developing an Intermediate Jet Trainer (IJT), the Sitara. The IAF is pleased with the prototype, and has ordered a limited series production of 12 aircraft. Eventually, the air force plans to buy 73 Sitaras, but it will take at least 3-4 years before it is available in the numbers needed for organised training.

Finally, for the “Stage-3” training, the Hawk should have been available in large enough numbers by now. But production delays at HAL, accompanied by a blame-game between HAL and the Hawk’s vendor, BAE Systems, has meant that just 29 Hawks have entered service against the scheduled induction of 44 Hawks by now.

A much needed strategy for training IAF pilots has now become clear. Before the trainers to implement this plan are obtained, several years of makeshift training lie ahead for the air force.

Saturday, 3 April 2010

Air Force gives Gripen fighter a second chance

by Ajai Shukla
Business Standard
3rd April 2010

Sweden’s futuristic medium fighter, the Gripen NG, has been given a second chance in the US $11 billion contest to select a Medium Multi-Role Combat Aircraft (MMRCA) for the Indian Air Force. The MoD has asked Gripen International, which last month failed to send the Gripen NG fighter for trials in India on the dates allotted by the IAF, to send the fighter for trials in the middle of May.

Business Standard had reported, on 9th March, that Gripen International had sent older Gripen-D fighters for trials because the Gripen NG was held back in Sweden for improvements for the Swedish Air Force. Technically, that was a violation of the terms of the competition.

But senior IAF officers have told Business Standard that they would not allow a legalistic interpretation of rules to narrow their options. Explains a senior air marshal who is involved in the decision-making, “We have a time window until the middle of this year, during which each of the six fighters in the tender are undergoing three stages of trials and inspections. As long as the Gripen NG is ready for trials within that period, we will evaluate the aircraft. All six vendors will have a level-playing field.”

Besides the Gripen NG, the other fighters being evaluated by the IAF are: the F/A-18 Super Hornet; the F-16IN Super Viper; the Dassault Rafale; the Eurofighter Typhoon; and the MiG-35. While all but the MiG-35 are already in service, the Gripen NG is still under development. Just a single “demonstrator” aircraft has been built to prove its capabilities. Next year, Gripen will build the first Gripen NG prototype.

Gripen International has welcomed the MoD’s decision. Gripen’s India campaign head, Eddy de la Motte, told Business Standard, “Our plan was always to bring the (Gripen NG) demonstrator to India. The Swedish government’s sudden tasking is being completed right now. We will soon be ready to go to India and we will provide the IAF with maximum opportunity to evaluate the fighter.”

The first of these opportunities will come next week, when an IAF team travels to Sweden to evaluate the Gripen’s firing of a “Beyond Visual Range” air-to-air missile. It is learned that Gripen International will make the Gripen NG demonstrator available to IAF pilots, should they wish to fly it in Sweden next week. If the IAF accepts the offer, it will be the first time an Indian pilot flies the Gripen NG, albeit with a Swedish “safety pilot” in the rear cockpit.

While Gripen International expresses confidence in their fighter, it now faces trials in conditions hotter (and, therefore, more unfavourable) than all the other contenders. IAF sources reveal that the Gripen-D performed well in last month’s trials; despite that, the Gripen NG will be put through the full battery of tests, including high altitude testing in Ladakh.

The Gripen NG is significantly more capable than the Gripen D. It has a more powerful GE-414 engine; it carries more fuel and, therefore, has greater range; and, with 10 hard points for weaponry, the Gripen NG has extra teeth. It will also come with a new AESA radar, electronic warfare equipment, and upgraded avionics.

Senior IAF officers, while happy with these features, also highlight the Gripen NG’s downside: a high level of US electronics, weaponry, and the GE-414 engine. And the F-16IN and the Gripen NG are the only two single-engine aircraft in the contest, which places them at a disadvantage in terms of reliability.

Friday, 2 April 2010

L&T expands nuclear footprint with Rolls-Royce JV

by Ajai Shukla
Powai and Hazira
Business Standard, 2nd Apr 10

L&T’s heavy engineering skills have already made it the partner of choice for the nuclear power reactor manufacturers that are eyeing the Indian market. Industry leaders Westinghouse-Toshiba and GE-Hitachi of the US, AEC of Canada, and Rosatom of Russia have already signed MoUs to partner L&T in building reactors in India.

Today, L&T expanded that potential role, signing a MoU with UK company, Rolls-Royce to collaborate in nuclear instrumentation and controls, reactor components, in-service reactor support and waste management. L&T will obtain these capabilities for light water reactors, which currently comprise 60% of the world’s installed nuclear capacity.

Rolls-Royce already has a nuclear certified supply chain of more than 260 companies. The company provides advice and technical engineering support to governments and reactor operators in Europe and the US, including all 58 operating nuclear reactors in France.

“Rolls-Royce is a global major in instrumentation and controls for nuclear power generation plants and this dovetails perfectly with our core business of engineering [nuclear reactors]”, L&T’s heavy engineering chief, MV Kotwal, told Business Standard. “Typically, 9% by value of a nuclear plant consists of instrumentation and controls. The L&T-Rolls-Royce JV will start by fabricating these for nuclear utilities abroad, such as EDS in France; and for nuclear plants in India when the business opens up, perhaps 12-18 months from now.”

Before L&T is eligible to participate in overseas business, India would have to first enact the enabling legislation, including the contentious nuclear liability bill.

L&T is currently the only Indian company that is globally certified for manufacturing nuclear power generation equipment, having obtained the American Society of Mechanical Engineers (ASME) Nuclear-stamp. Rolls-Royce’s existing presence in the international nuclear industry would offer L&T the marketing partnership for supplying nuclear plants outside India.

Business Standard has just visited L&T’s heavy engineering facilities at Powai (Mumbai) and Hazira (Gujarat), which were inspected by the world’s four big reactor companies before they signed production MoUs with L&T. These sophisticated facilities have manufactured nuclear reactor components for years, in partnership with the Nuclear Power Corporation of India (NPCIL) for India’s indigenous nuclear power plants. Alongside rocket motor casings for India’s space programme, an L&T engineer points out work in progress on India’s most advanced reactor, the Fast Breeder Reactor.

“We have a quality rating of more than 95% on tube-to-tube sheet welding for Fast Breeder Reactors”, claims the engineer. “Going by the available information, this is the highest quality in the world.”

That rating means that 95% of all welded joints pass the mandatory X-ray inspection. Only 5 joints in a hundred need to undergo repair.

A heavy forging plant that is coming up in L&T’s Hazira facilities will soon supplement its engineering skills. Capable of producing individual forgings as large as 600 tonnes, this forge is a 74-26% JV with NPCIL, with L&T holding the majority share.

“Nuclear reactors require very clean forgings, since any contamination causes problems while handling radioactive materials”, explains an L&T engineer. “These are made of advanced Vanadium and Molybdenum steels, which very few suppliers can provide. That is why we have set up one in Hazira.”

L&T believes that the current installation of Russian VVER 1000 MWe light water reactors at Kudankulam will be the last foreign built reactors that will generate power in India. Hereafter, it would be far more economical for foreign suppliers to build major reactor components in India and save on labour, material and transportation costs.

“I can only guess at the volume of business that will be generated in India”, says MV Kotwal of L&T. “But my estimation would be that by about 2013-15, we would be looking at about Rs 6000 crores of available business potential.”

Thursday, 1 April 2010

INS Chennai launched at Mazagon Dock today...

INS CHENNAI, the 3rd Project-15A destroyer, was launched by Elizabeth Antony, wife of Defence Minister Antony.

(Above) Vice Admiral Malhi, Chairman and MD of Mazagon Dock, presents a memento to the defence minister