Sunday, 30 November 2014

Purchase of Pilatus trainer aircraft deferred, future in limbo

Pilatus tells HAL to negotiate directly with sub-vendors for licences to use and maintain equipment

By Ajai Shukla
Business Standard, 30th Nov 2014

Last Saturday, the ministry of defence (MoD) postponed a decision on buying 106 PC-7 Mark II basic trainer aircraft from Swiss vendor, Pilatus, to supplement the fleet of 75 trainers already contracted for Swiss Francs 577 million (Rs 3,727 crore).

The defence ministry was not convinced by the IAF’s reasons for abandoning a 2009 decision to buy 75 trainers from the international market in the “Buy Global” category; while Hindustan Aeronautics Ltd (HAL) built 106 in the “Make Indian” category.

Now more reasons are emerging for being cautious about buying additional Pilatus trainers. It is unclear whether the IAF has informed the MoD of these.

With 53 PC-7 Mark II trainers already delivered and more on the way, Business Standard has learnt that Pilatus is shrugging off direct responsibility for their maintenance, repair and overhaul (MRO).

This after Pilatus charged the MoD 80.25 million Swiss Francs (Rs 515 crore) for maintenance knowhow to HAL in the contract signed on May 24, 2012. This so-called “Maintenance Transfer of Technology” (MToT) was to be formalised in a separate contract within three years.

With just six months left for that deadline, there is no contract in sight, only uncertainty about how the PC-7 Mark II trainers will operate over decades.

Pilatus has told HAL --- which will eventually maintain the PC-7 Mark II fleet through its service life after receiving maintenance technology --- to negotiate directly with sub-vendors for licenses to use and maintain their equipment.

Pilatus only assembles and integrates the trainer, using sub-systems bought from global vendors. That means HAL will now have to seek licenses from sub-vendors that include Pratt & Whitney; Honeywell Aerospace; Rockwell Collins; Claverham and Ontic.

Pilatus has flatly refused to be even a signatory to those licensing agreements.

According to Pilatus, the PC-7 Mark II has 159 sub-assemblies, which are called “line replaceable units” or LRUs (e.g. the engine supplied by Pratt & Whitney). The MToT contract drafted by Pilatus covers just 65 LRUs. Pilatus says 72 LRUs are non-repairable, which should just be thrown away when they go bad. Seven more LRUs are the responsibility of the IAF; while the remaining 15 items are on various countries’ “export control lists” and would have to be stocked in advance.

Pilatus wants HAL to negotiate individually with 29 global vendors that provide the 65 replaceable items. There is no telling what price they will demand. When Pilatus charged Swiss Francs 80.25 million for MToT, it did nothing to bind the sub-vendors to conform to this price.

With foreign vendors confident that the IAF has nowhere else to go, they are negotiating for fees much higher than had been budgeted.

Contacted for comments, Pilatus cited a confidentiality agreement with the MoD, but stated that, “suffice it to say that we are working on this diligently to achieve an acceptable outcome for the GOI and IAF. As Pilatus does not hold authority over the individual companies regarding licensing of other vendor IP rights, it is using its best endeavors to mediate between each company and HAL to reach an acceptable position.”

A key vendor, Honeywell, admits it is in “active discussion with HAL on this program” for a “licensing arrangement”. Another vendor, Rockwell Collins, declined to comment.

When the main contract was being negotiated, HAL had alerted the IAF to clearly list Pilatus’ maintenance responsibilities. However, with the IAF eager to seal the contract, Pilatus’s obligations remained vague.

Now the IAF itself is passing the buck to HAL. In emailed comments, the IAF stated, “The MToT of Pilatus was negotiated at contract negotiation stage by a team of HAL specialists headed by a GM level officer…  It will be a prudent to ask HAL as to why they have not signed the MToT contract with Pilatus.”

Within six months of the contract, Pilatus made it clear it would assume minimal responsibilities. On November 30, 2012, a draft contract from Pilatus proposed to confine MToT to facilities set up by HAL.

Pilatus repudiated responsibility for renewing original equipment manufacturer (OEM) licences, updating technical documents, software upgrades and maintenance of special tools and test equipment --- which are standard MToT components. For these India would require separate contracts at extra cost, over and above the 80.25 million Swiss Francs the main contract specified for MToT.

Under Pilatus’ draft contract, India will have to pay for establishing maintenance facilities like the Engine Test Bed. Pilatus would only provide the design.

According to established norms, aircraft acquisition contracts include aspects of maintenance, including details of initial repair kits, base spares, and licensing and escalation mechanisms for 30 years.

(This is the concluding part of a two-part series on the Pilatus trainer)

Saturday, 29 November 2014

DRDO gets continuity, as chief gets 18-month extension

Interviewing Dr Avinash Chander when he took over as DRDO chief last year

By Ajai Shukla
Business Standard, 29th Nov 14

Giving the lie to sustained media speculation about sweeping change in the Defence R&D Organisation (DRDO), Prime Minister Narendra Modi has endorsed the current leadership. On Friday, DRDO chief, Dr Avinash Chander was given an 18-month extension that lets him head the organization till May 31, 2016.

The United Progressive Alliance (UPA) government had appointed Chander for a 3-year term, starting from June 1, 2013, even though he had already been given two extensions of service. When the National Democratic Alliance (NDA) government took charge, rumour had swirled that Chander would not continue beyond November 31, 2014, when he would reach the age of superannuation, i.e. 65 years.

Expectation of change was further fuelled on Modi’s first visit to the DRDO on August 20, when he publicly criticised the DRDO’s “chalta hai” (anything goes) attitude, and suggested that the DRDO should empower younger scientists. The PM specifically suggested manning 5 of the DRDO’s 52 laboratories with scientists who were all under 35 years of age.

That speculation was put to rest today. Announcing that Dr Avinash Chander would indeed retire from government service when he superannuated on November 30, he was retained for another 18 months on contract.

“The appointment of Dr. Avinash Chander beyond his date of retirement i.e. 30.11.2014 for 18 months would be on contract basis, with the same terms and conditions as he would be entitled to Secretary (Defence R&D) before the date of retirement. His contractual term will end on 31 May 2016”, said a defence ministry announcement.

Besides the post of Secretary (Defence R&D), Chander is also Director General of the DRDO (possibly being upgraded to Chairman, DRDO); and Scientific Advisor to the Raksha Mantri (SA to RM).

Chander is a missile specialist who had, as Director of the Advanced Systems Laboratory, Hyderabad, developed the Agni from a 1,500-kilometre missile that was of practical use only against Pakistan (targets in China are all beyond this range) to a 3,500 kilometre range missile that was India’s first viable deterrent against China.

Last year, as the chief controller of the DRDO’s missile programme, Chander oversaw the development of the 5,000-kilometre Agni-5 missile and the K-15 submarine launched ballistic missile.

One Dornier aircraft sale to Mauritius boosts India's defence exports by 60 per cent!

Mauritius and HAL sign a contract for an HAL-built Dornier at Port Louis on November 27, 2014.

In a Rs 100-crore boost to India’s defence exports, Hindustan Aeronautics Ltd (HAL) have signed a contract in Mauritius for the supply of a Dornier-228 maritime surveillance aircraft, which is manufactured in HAL’s Kanpur facility. The aircraft will boost Mauritius’ ability to monitor its waters.

On November 28, the defence minister told parliament that India's total defence exports this year were Rs 166 crore. The sale of the Dornier boosts that figure by more than 60 per cent to Rs 266 crore.

HAL has earlier supplied Mauritius with Cheetah, Chetak and Dhruv helicopters, and with two maritime-version Dorniers.

The Dornier-228 is a 19-seater, lightweight, twin turboprop aircraft that can take off in 700 metres and land within 575 metres --- essential requirements for operating from short and semi-prepared airfields. HAL has equipped the aircraft with customer-specified sensors like 360-degree radar, Forward Looking Infra-Red (FLIR), traffic collision and avoidance system (TCAS) and weather radar.

India seeks to retain close links with Mauritius as an Indian Ocean partner country. Meanwhile, China is offering huge financial incentives to Indian Ocean island states, seeking to build its own relationships in India's backyard. According to various media reports, China has financed almost 50 development projects in Mauritius, including a low-interest loan of $260 million for an airport terminal at Port Louis.

Thursday, 27 November 2014

News analysis: Ajit Doval becomes China negotiator with stars in alignment

This map incorrectly shows Sikkim as disputed. The Central Sector is actually in Uttarakhand

By Ajai Shukla
Business Standard, 27th Nov 14

Since 2003, in 17 rounds of talks, India and China have relied on quiet diplomacy between a top official from either side to resolve their thorny territorial dispute. Termed “Special Representatives” or SRs, these negotiators --- who must enjoy the confidence of their national leaders --- are mandated to bypass the endless technical wrangling of diplomats, bureaucrats and soldiers.

On November 24, Prime Minister Narendra Modi announced that National Security Advisor (NSA) Ajit Doval would "conduct boundary negotiations and strategic consultations with China".

Doval will be India’s fifth SR; after Brajesh Mishra (2003-04); JN Dixit (2004-05); MK Narayanan (2005-10); and Shivshankar Menon (2010-14).  For a decade, China’s SR was the redoubtable Dai Bingguo, who has been lauded by Henry Kissinger and Zbigniew Brzezinsky. Dai retired last year to be succeeded by Yang Jiechi.

Modi had first offered the job of SR to former foreign secretary and respected Sinologist, Shyam Saran, who declined. The rank of “principal secretary” that Saran was offered was two ranks below his Chinese interlocutor, Yang Jiechi, who holds the rank of State Councillor --- one rung above a minister.

Doval has accepted the challenge at his current rank of “principal secretary”. He will now negotiate with Yang Jiechi to decide ownership of some 1,30,000 square kilometres (sq km) of territory that both countries claim. This is spread across three areas --- (a) The uninhabited Western Sector in Ladakh, where the dispute involves 38,000 sq km; (b) The small Central Sector in Uttarakhand, which is just 2,000 sq km; and (c) The large and contentious Eastern Sector, which measures some 90,000 sq km, practically the whole of Arunachal Pradesh.

Sources close to the negotiations say that New Delhi has been prepared to accept Beijing’s claims in the Western Sector, provided China accepted India’s claims in the Eastern Sector with the relatively inconsequential Central Sector resolved through minor give-and-take. Beijing, however, demands “substantive concessions” in the Eastern Sector --- specifically ceding to China ownership of the strategic Tawang district. This is unacceptable to New Delhi.

Notwithstanding this deadlock, previous SRs negotiated an “Agreement on Political Parameters and Guiding Principles for the Settlement of the China–India Boundary Question”, which was signed during Premier Wen Jiabao’s visit to India in April 2005.

Doval will have to translate this into a “Framework Agreement” for a final settlement, after which a new border will be delineated and demarcated.

The “Political Parameters” of 2005 are viewed as a triumph in New Delhi because they include two points that favour India’s case. These are (a) Article VI: “The boundary should be along well-defined and easily identifiable natural geographical features to be mutually agreed upon between the two sides”; and (b) Article VII: “In reaching a boundary settlement, the two sides shall safeguard due interests of their settled populations in the border areas.”

Indian diplomats see China’s acceptance of the watershed principle as tacit acceptance of the McMahon Line, drawn along the watershed in 1914, which India claims is the border between Arunachal Pradesh and Tibet. The clause about protecting the settled populations is seen in New Delhi as Chinese acceptance that populous Tawang remains with India.

China downplays these assumptions. Beijing signed the “Political Parameters” under pressure, at a time when New Delhi’s international profile was growing. In 2005, a burgeoning growth rate had made India the darling of global investors. New Delhi was edging closer to Prime Minister Junichiro Koizumi’s Japan. With the US-India strategic partnership flowering, and Prime Minister Manmohan Singh due to visit Washington, Beijing clearly folded under the pressure.

Says a senior diplomat of that era: “China apparently resolved to make Wen’s visit to India a grand success, hoping to take some of the shine off Dr Manmohan Singh’s forthcoming US visit. New Delhi successfully leveraged Beijing’s concerns and pushed through a favourable “Political Parameters” agreement that the Chinese premier signed in India on April 11, 2005.

Even so, New Delhi failed to maintain the momentum. The global economic crisis, India’s growth slump, and political paralysis in New Delhi gave Beijing little incentive to continue purposeful negotiations.

With India’s political wheel turning full circle this year, Doval will negotiate from an expanding diplomatic space. Prime Minister Modi’s powerful domestic mandate, revitalised ties with Japan and Vietnam, and a burgeoning US-India relationship --- evident from President Barack Obama’s forthcoming visit to New Delhi as Republic Day chief guest --- could induce Beijing to resume serious negotiations.

Over time, the SR dialogue has grown in scope. Besides the boundary question, it has become a standing forum for strategic discussions between New Delhi and Beijing. The two SRs discuss sensitive issues when they meet one-on-one; while the visit agenda occasionally includes a “retreat” outside the capital, where they have ample opportunity to exchange ideas, views and to float trial balloons.

The SR talks are complemented by two other simultaneous dialogue tracks. One is between India’s foreign secretary and China’s equivalent vice-minister for foreign affairs. The second track is a Technical Group, which includes the dealing foreign ministry officials from both sides. This resolves the nuts and bolts issues of border management, such as confidence building measures (CBMs).

The SR Dialogue was instituted during Prime Minister Atal Behari Vajpayee’s visit to China in 2003. There had been little progress in 8 rounds of talks between officials from 1981-88; and in 14 meetings of a Joint Working Group (JWG) from 1988-2003. Both sides agreed that a political solution to the boundary question, negotiated between empowered, top-level officials, would allow the pursuit of broader strategic goals.

The first challenge for Doval would be to obtain a clear negotiating mandate. So far, there has been little clarity on India’s bottom lines. While both sides would accept a border settlement on their own terms; reconciling those might involve concessions. It remains for the prime minister to gauge what concessions he can sell to parliament and the people. 

Tuesday, 25 November 2014

Defence (procurement) minister

An ill-informed public narrative centres on expensive weapons platforms instead of the little things that would improve capability

By Ajai Shukla
25th November 2014

Going by the public statements made so far by Defence Minister Manohar Parrikar, one could be forgiven for mistaking him as minister for defence procurement. In practically every statement he promises “transparency and speed in defence procurement”. To be fair, he admits it will take him time to grasp issues relating to national defence. Even so, if he continues promising only faster procurement, it might well become a self-fulfilling prophecy. It would be worrying to have a defence minister who measures his success in capital rupees spent. Instead, Mr Parrikar must focus on adding capability. This can be done at relatively nominal cost.

A striking example has been reported in Broadsword (See article below, “Advanced Towed Array Sonar contract provides major boost to navy). Over the last two decades, the navy has built up a powerful and enormously expensive fleet of capital warships --- the aircraft carriers, destroyers, frigates and corvettes that control the seas in war. Yet these warships, each costing several thousand crore rupees and crewed by a couple of hundred sailors, have remained desperately vulnerable to enemy submarines. This is simply because they lack “advanced towed array sonar”, or ATAS, which the Defence R&D Organisation (DRDO) had promised to deliver but did not. By now procuring ATAS from the global market --- each worth a piffling Rs 50 crore --- tens of thousands of crores worth of naval warships have become combat capable.

Such examples abound within the military. Yet the ill-informed public narrative on defence procurement centres on enormously expensive weapons platforms that, in many cases, are operationally ineffective even after lavishing billions because smaller systemic or structural drawbacks restrict their full employment. In militaries like that of Pakistan, where money is short even after unfairly burdening the national exchequer, there is awareness of the need to obtain bang for the buck. India’s relative wealth has not nearly been translated into commensurate capability.

Remaining with the navy (ironically the most cost conscious service), there is constant breast-beating over the submarine shortfall and China’s growing lead in submarine numbers. The media constantly harps on how India has just 13 submarines compared to China’s 53 conventional and 5 nuclear attack submarines, though that lead could increase this afternoon, giving how fast China is building more. Everyone’s solution, predictably, is to throw more money at the problem, by quickly sanctioning (quickly and transparently, as Parrikar would say!) Project 75I, which envisages building six new submarines for a mind-numbing Rs 50,000 crore.

Yet if one were to scrutinise the on-going Project 75, under which Mazagon Dock Ltd, Mumbai is building six Scorpene submarines, a sane planner would be aghast to discover that these submarines --- which have been in the works for more than a decade --- will be operationally hamstrung when they finally roll off the line. The submarine’s key weapon is the heavyweight torpedo and, incredibly, the MoD has omitted to buy any for the Scorpene. In 2011, Finmeccanica subsidiary WASS had been selected to supply 98 torpedoes for some Rs 1,850 crore. Since that contract remains unsigned, the Scorpenes will join the fleet without their key weapon.

Yet, nobody in the military, the ministry, the government or the media is called to account for allowing a Rs 1,850 crore procurement to stall the battle-readiness of Rs 24,000 crore worth of submarines. One can forgive the ministry, manned as it is by generalists for whom torpedo sounds like a variety of libido. The Prime Minister’s Office, with so many ministries to meddle in, can only focus on big bang procurements --- and that means those that are regularly reported on, or those that the military is pressing for. The media, especially top editors, choose not to waste mind space on the nitty-gritty of defence economics, and instead focus their collective gaze on high-voltage procurement contracts that can be easily remembered by the billions they cost.

Take the media fanfare over the selection of the medium multi-role combat aircraft (MMRCA), an apparently fixed match that was won by the French Rafale fighter, the least expensive of the two most expensive fighters on offer, which were predictably ushered into the final selection. Currently, this $20 billion tender remains the single most reported defence story, with uncounted column inches speculating on the imminent signature of the Rafale contract. This newspaper has been practically alone in carrying cost-benefit analyses on the Rafale proposal, and in debating whether the opportunity cost of buying this fighter is too high.

In contrast, there is little mind space for the little things that would improve operational capability at little cost. Maintenance, that boring process that can put a hundred additional Sukhoi-30MKIs into the sky just by better inventory control and technician training. Light fighters, especially the Tejas Light Combat Aircraft (LCA), which should be the pride of India but is sadly the bastard child of the laughably named Indian Air Force. Force multipliers, like airborne refuelling aircraft and airborne early warning and control systems, can be wisely procured and deployed to make each squadron as effective as two. But this is humdrum stuff. So are issues like night-blindness that dramatically reduces combat capability across the three services, especially the army.

It is these mundane essentials that Mr Parrikar must focus on. Appointing a tri-service chief would spare him the confusion of having to navigate the tri-service jockeying for funds and resources. He must institute a detailed capability audit, in which each service presents a plan for optimising their existing weapons and platforms rather than just stretching out their palms for newer, better and, of course, more expensive toys. It is militarily prudent to get our existing kit working optimally --- the military equivalent of fixing the Indian Railways before building fancy new bullet train lines.

Advanced Towed Array Sonar contract provides major boost to navy

Atlas Elektronik wins ATAS contract, poised for more gains in the massive Indian sonar market

By Ajai Shukla
Business Standard, 25th Nov 14

On November 12, without announcement or fanfare, the ministry of defence (MoD) signed a small contract with enormous implications for itself and the Indian Navy. This formalized the purchase of six advanced towed array sonar (ATAS) systems from Atlas Elektronik, the German naval systems giant, for just under Euro 40 million (Rs 306 crore).

These ATAS systems will equip three Talwar-class frigates (INS Talwar, Trishul and Tabar) and three Delhi-class destroyers (INS Delhi, Mumbai and Mysore), allowing them to detect enemy submarines in the Arabian Sea, where the warm, shallow waters confound conventional hull-mounted sonars.

Without ATAS, all the warships the navy has built and bought since the 1990s --- each costing a few thousand crore and crewed by a couple of hundred sailors --- would be sitting ducks in war. Enemy submarines, lurking unseen 50-80 kilometres away, could leisurely torpedo Indian warships.

So vulnerable has been India’s fleet that, when INS Vikramaditya, the navy’s new aircraft carrier, was sailing home from Russia, it was escorted through the Arabian Sea by several Indian warships. There was no certainty that Pakistan’s Agosta 90B submarines could be detected by sonar systems other than ATAS.

All that protects India’s 25 latest frontline warships from enemy submarines is a relatively ineffective Passive Towed Array Sonar (PTAS), and an indigenous hull-mounted sonar called HUMSA.

So important is the ATAS contract that the MoD abandoned even the pretence of indigenisation. Atlas Elektronik will build all six ATAS systems in Germany, and has been exempted from offsets.

ATAS is especially vital in the Arabian Sea. Warships detect underwater objects (like submarines) with sonar --- a “ping” of sound emitted into the water that reflects from submarines, just as radar bounces back from aircraft. In our warm, shallow waters, the returning signal often gets lost. Since the water is warm on the surface and cools rapidly as one goes deeper, the sharp “temperature gradient” refracts sonar waves, bending them away from the warship’s sensors. Unable to receive the returning signal, the warship cannot detect the submarine.

ATAS overcomes the “temperature gradient”, since it is towed by a cable that extends deep below the surface, into the cooler layers where submarines lurk. With the sensors themselves in the colder water layers, there is no “temperature differential”. Even the faintest return signal from a submarine is detected.

The navy will fit ATAS externally onto the rear of its warships, which have been built for this reason with an empty compartment at the rear.

With this contract, Atlas Elektronik has taken pole position for supplying the navy a range of high-end sonars. Bharat Electronics Ltd (BEL), which is required to build ten ATAS with foreign partnership, has been encouraged by the navy to tie up with Atlas so that sonar equipment is standardised across warships.

BEL is learnt to be in discussions with Atlas for building ten ATAS for three Shivalik-class frigates (INS Shivalik, Satpura and Sahyadri), three Kolkata-class destroyers (Kolkata, Kochi and Chennai), and four Kamorta-class anti-submarine corvettes (INS Kamorta, Kadmatt, Kiltan and Kavaratti).

That leaves 20 warships that will remain in naval service for some years. These include: three aircraft carriers (INS Vikramaditya, Vikrant and Vishal); three Brahmaputra class frigates (INS Brahmaputra, Betwa and Beas); three Talwar-class follow-on frigates (INS Teg, Tarkash and Trikand); four Project 15-B destroyers (unnamed, under construction); and seven Project 17-A frigates (unnamed, contract being negotiated).

Given its first-mover advantage, the infrastructure and partnerships it will build and its already demonstrated price advantage, Atlas hopes to supply sonar systems for these and for other smaller surface warships and submarines. In April, the MoD tendered for 16 Anti Submarine Warfare Shallow Water Craft (ASWC), which need sophisticated sonar with electronically controlled beams.

Atlas Elektronik sources say they are eager to establish a joint venture company with either BEL or an Indian private sector company to build sonars in India. That would grant majority ownership of 51 per cent to the Indian entity.

ATAS import has been blocked since the mid-1990s because the Defence R&D Organisation (DRDO) was developing an indigenous ATAS called Nagan. In 2012, the Nagan project was officially shut down and work began on another system called ALTAS. With this making slow progress, the DRDO finally okayed import.

In November 2012, two years ago, Atlas was declared the lowest bidder. That was followed by a string of complaints to the MoD against Atlas, apparently motivated, since the MoD found no wrongdoing. Even so, with the ministry painstakingly investigating every complaint, each caused a 3-4 month delay. Earlier this year, with the elections impending, the United Progressive Alliance decided to leave the signing to the next government.

Atlas Elektronik is owned 51 per cent by Krauss-Maffei Wegmann GmbH (KMW) and 49 per cent by Airbus Defence & Space. 

Sunday, 23 November 2014

Parrikar starts artillery procurement; no sanction for buying more Pilatus trainers

Indian vendors, like Tata Power, are geared up for the mounted gun project with products like this

By Ajai Shukla
Business Standard, 23rd Nov 14

At an apex meeting of the Defence Acquisition Council (DAC) on Saturday, the Ministry of Defence (MoD) has tried to revive the flagging purchase of artillery for an army that has bought no modern guns since 1987, when the procurement environment was deeply scarred by the Bofors scandal.

Defence Minister Manohar Parrikar, chairing his first DAC meeting, sanctioned the start of what could be another tortuous, multi-year procurement of 814 mounted gun systems (MGS) for an estimated Rs 15,750 crore ($3 billion).

These 155 millimetre/52 calibre guns are being bought in the “Buy & Make (Indian)” category of the Defence Procurement Procedure (DPP). In this, Indian companies will establish joint ventures with foreign gun-makers; which will build the guns in India. The DAC ruled that the first 100 MGS can be imported ready-built, while the remaining 714 must be fabricated in India.

Indian vendors have long awaited this tender, with technology partnerships tied up and ready. The frontrunners are: L&T, with French company, Nexter; Bharat Forge with Israeli company, Elbit; Tata Power SED with South African company, Denel; and BEML or Punj Lloyd with a Slovakian gun company.

Over the last two decades, artillery procurement has seen many false starts. Numerous tenders have been floated in five categories of 155 millimetre guns. These include the purchase of (a) 1,580 towed guns; (b) 100 tracked (self-propelled) guns; (c) 180 wheeled (self-propelled) guns; and 145 ultralight howitzers.

This variety caters for diverse operating scenarios. Towed guns are for regular use in plains and mountains; tracked (self-propelled) guns are mounted in armoured vehicles to support tank formations; wheeled (self-propelled) guns are for fast-moving, non-armoured formations; while the ultralight howitzers, which can be lifted by helicopters to remote locations are for mountain divisions. The MGS is a regular 155-millimetre gun fitted onto a high mobility vehicle. This allows it to move and come into action quicker than a conventional towed gun.

Yet these guns have one thing in common: the MoD has not bought a single one. Several gun trials are still continuing.

Separately, the MoD has ordered several indigenous gun programmes. The Ordnance Factory Board (OFB) is supplying 114 Dhanush 155-millimetre/45-calibre guns. These are based on the technology transferred by Swedish gun maker, Bofors AG as part of the controversial procurement of 410 Bofors guns in the late 1980s. If these guns perform well, this order could rise to 414 guns.

Meanwhile, the Defence R&D Organisation is spearheading the Advanced Towed Artillery Gun (ATAG) project, to build a more powerful 155-millimetre/52-calibre gun, with an ambitious range of 60 kilometres, and a weight of just 12 tonnes. This all-Indian project includes private sector players like L&T, Bharat Forge and Tata Power SED.

The DAC meeting also reviewed, but postponed decision on, the Indian Air Force (IAF) proposal to order 38 additional PC-7 Mark II basic trainer aircraft from Swiss company, Pilatus, which has already won a contract to supply 75 aircraft for Swiss Francs 577 million (Rs 3,727 crore).

While the IAF has pressed hard for exercising the “options clause” on the Pilatus contract, Hindustan Aeronautics Ltd (HAL) told the DAC today that its indigenous project to build the Hindustan Turbo Trainer – 40 (HTT-40) is well along, and the home-grown trainer would make its first flight next year.

The DAC also heard that IAF training is continuing on the Pilatus trainers already ordered; the HTT-40 would be maintained cheaply by HAL; the Indian trainer could be armed and sold to buyers like Afghanistan, which cannot be done with foreign aircraft due to “end user restrictions”; and the HTT-40 is in line with Prime Minister Narendra Modi’s “Make in India” philosophy.

Furthermore, in 2009, the DAC had itself cleared the purchase of 181 basic trainers in two separate categories --- 75 trainers in the “Buy Global” category; and 106 built by HAL in the “Make Indian” category. The DAC asked why the IAF was now proposing a new “Buy & Make” category procurement to build the Pilatus in India.

The defence minister ordered the IAF to explain this change, which would be reviewed at a future DAC meeting. Parrikar said the DAC’s tradition of monthly meetings did not preclude more frequent meetings for urgent matters.

On November 26, HAL will conduct its first detailed briefing of the new defence minister, where Parrikar will be brought up-to-date with the progress on the HTT-40. HAL sources say the development is complete, the construction of the first trainer is well under way and it will make its first flight by mid-2015. 

Friday, 21 November 2014

Pilatus or HAL’s trainer: Parrikar’s first “Make” decision

A design graphic of the HTT-40, which HAL says will make its first flight next year

By Ajai Shukla
Business Standard, 21 Nov 14

In his first television interview as defence minister, aired on November 14, Manohar Parrikar regretted the military’s “craze for importing everything”, including relatively low-tech weaponry that could be designed and built in India.

“First priority has to be to identify (equipment) for “Indian Make” and then only for the imports, wherever required”, stated Parrikar.

On Saturday, Parrikar’s resolve will be tested at his first Defence Acquisition Council (DAC) meeting, which clears high-value military procurements. The DAC will decide on the Indian Air Force (IAF) proposal for importing 38 Pilatus PC-7 Mark II basic trainer aircraft, even as Hindustan Aeronautics Ltd (HAL) designs an Indian equivalent, the Hindustan Turbo Trainer – 40 (HTT-40).

HAL credibly claims it can build the HTT-40 basic trainer, having demonstrated design skills on the far more sophisticated Tejas Light Combat Aircraft. The first HTT-40 will fly next year, says HAL.

HAL presents the HTT-40 as a cheaper, better trainer than the PC-7 Mark II. It is built to Indian specifications, can be upgraded over its 30-year service life as technology advances, and maintained and overhauled more cheaply than a foreign trainer.

HAL also points out it can fit sensors and weapons on the HTT-40 to make it a “light attack aircraft”, prohibited by the “end-use conditions” on foreign trainers like the Pilatus.

Arming the HTT-40 would facilitate export to countries like Afghanistan, which desperately wants light attack aircraft to support Afghan soldiers combating the Taliban. Currently, Brazil is building twenty light trainers --- the A-29 Super Tucano --- for the Afghan Air Force, at American cost.

The MoD acknowledges HAL’s logic. On September 29, 2009 the ministry decided to procure the IAF’s requirement of 181 basic trainers from two sources --- 75 bought off-the-shelf from the global market so that IAF training could continue; while HAL would develop and build 106 HTT-40s under the “Make” procedure.

The IAF, however, has consistently undermined this arrangement since May 24, 2012, when it signed a Swiss Francs 577 million (Rs 3,727 crore) contract with Pilatus for 75 trainers. As Business Standard reported (July 29, 2013, “Indian Air Force at war with Hindustan Aeronautics; wants to import, not build, a trainer”) former IAF chief, Air Chief Marshal NAK Browne, wrote to then defence minister, AK Antony, asking him to exercise an “Option Clause” in the contract with Pilatus to procure 38 more PC-7 Mk IIs; and then also buy the remaining 68 trainers from Pilatus as a “Repeat Procurement”, which requires no trials.

For Pilatus, that would have amounted to a windfall of some Swiss Francs 700-800 million (Rs 4,500-5,150 crore). For HAL, and for India, it would mean the doors being slammed on the indigenous HTT-40 project.

Browne told Antony the HTT-40 was too expensive, claiming it would cost Rs 43.59 crore at 2011 prices. In contrast, said the IAF chief, the PC-7 Mark II cost just Rs 30 crore.

Incredibly, the air chief deliberately understated the rupee cost of the PC-7 Mark II. In fact, its price of Swiss Francs 6.09 million amounted to Rs 40 crore, because of the depreciating rupee.

With the MoD refusing to oblige Pilatus with an order for more trainers, the IAF then approached HAL to build the PC-7 Mark II with technology from Pilatus. HAL, which was making headway on the HTT-40, flatly rejected the IAF proposal.

A rattled IAF then decided to go it alone. On October 8, 2013, Browne bizarrely stated that the IAF’s base repair depots (BRDs) --- which are meant to overhaul aircraft and engines --- would build the PC-7 Mark II in partnership with Pilatus. The MoD simply ignored that proposal.

Rebuffed, the IAF then looked towards the private sector. In March, with elections impending, the IAF floated a “Request for Information” --- a pre-tender enquiry --- inviting Indian companies to partner Pilatus and submit preliminary bids to supply the IAF with 106 PC-7 Mk II trainers. In the MoD’s procurement rulebook, this is termed a “Buy & Make (Indian)” acquisition.

In all this, the IAF apparently lost sight of the fact that the DAC had cleared two procurements in two separate categories --- 75 trainers in “Buy Global” and 106 in “Make Indian”.

Defence Minister Parrikar will make a far-reaching decision in Saturday’s DAC meeting. Sanctioning the purchase of 38 more PC-7 Mark IIs from Pilatus would whittle down HAL’s “Make” project from 106 HTT-40s to just 68, undermining the business case for an Indian production line.

“Pilatus is waiting. If India exercises the option for 38 more PC-7 Mark II, the remaining 68 trainers will probably also be built in Switzerland. The HTT-40 project will suffer a mortal blow,” says respected aviation expert, Pushpindar Singh.

(Tomorrow: IAF's Pilatus fleet faces maintenance crunch)