Opportunities Galore

With shrinking global markets, India is the partner of choice for Finmeccanica

A FORCE Report

Rome/Livorno/Caselle/Vergiate, Italy: If things move according to the script written by the Finmeccanica company Selex Galileo, then the Indian Navy will be the first service to get Advanced Electronically Scanned Array (AESA) radar ahead of the Indian Air Force. Selex Galileo has put forward its best foot to win the Indian Navy contract for the mid-life upgrade (MLU) programme of its primary anti-submarine warfare (ASW) helicopter, Kamov-28.

Oto Melara's 127-64 main gun for the new Indian frigates
Oto Melara’s 127-64 main gun for the new Indian frigates

In collaboration with Rosoboronexport and Kamov company, the principals of the helicopter, Selex Galileo has offered the navy a hard to refuse MLU package comprising its renowned Airborne Tactical Observation and Surveillance Systems (ATOS) currently in service with several navies and Sea Spray 7300E multimode AESA radar. Currently, under field evaluation trials (FET) by the navy, the Selex Galileo package also offers data linking, tactical management system and state of the art acoustic and sonic system among others. To convince the Indian Navy of the superiority of its offer and ATOS, Selex Galileo recently hosted an Indian naval delegation at its site in Turin. How pleased the delegation was with what it saw is difficult to say, but chief executive officer, Selex Galileo, Fabrizio Giulianini is confident enough to say, “We will turn Ka-28 into a potent and modern ASW platform.”

Perhaps, buoyed by what the Finmeccanica Group sees as the growing confidence of the Indian buyers in its products and technologies, the company invited select Indian journalists (FORCE was part of the team) to visit its facilities in northern Italy, which is where most of the company’s defence businesses are based, in late November. Winter had just set in Italy with sporadic rains preceding the snow. Through a cross-country drive across picturesque northern Italy, with a ride in C-27J thrown in for good measure, Finmeccanica packed in fair amount of its activities across the three military services and police in five days. However, given that this issue of FORCE is dedicated to the Indian Navy, FORCE is focussing only on Finmeccanica’s maritime activities for now.

Coming back to Ka-28, the FET is likely to be completely early next year and contract-signing will take another six to eight months after that. Though it is still early days to say which way the contract will swing, Giulianini has a few sweeteners up his sleeve. “If the Indian Navy wants, we will be happy to put the same Sea Spray radar on the Sea King helicopters as well whenever its comes up for upgradation.” In this Selex Galileo will collaborate with its sister company AgustaWestland, another member of the vast Finmeccanica family.

However, Sea King upgradation may well be a shot in the dark. Despite Indian Navy’s periodic and forceful assertions about upgrading the Sea King helicopters, doubts persist on the viability of extending the life of this erstwhile Westland-built platform which has been nearly phased out of most navies. Even as AgustaWestland reiterates its commitment towards the upgrade of the entire fleet of 23 helicopters (seven of which are already under upgradation and will be handed over to the navy by the end of this year), it is also pushing NH90 for navy’s multi-role helicopter (MRH) requirement (RFP for 16 platforms has been issued by the navy), ostensibly to ease out Sea Kings. AgustaWestland has also responded to the RFI for 56 naval utility helicopters (NUH) with its AW109LUH. While the NUH programme may take a while, AgustaWestland is hopeful that the MRH contract may be concluded earlier. In addition to the naval requirement, AW is pitching its various platforms like AW109, AW139 and NH90 for several RFIs/RFPs issued by the Indian Coast Guard.

Fabrizio Giulianini, Selex Galileo CEO Fabrizio; Giovanni Soccodato, Finmeccanica Senior Vice President; Renzo Lunardi, WASS CEO
(L to R) Fabrizio Giulianini, Selex Galileo CEO Fabrizio; Giovanni Soccodato, Finmeccanica Senior Vice President; Renzo Lunardi, WASS CEO

A joint venture between AgustaWestland, Eurocopter and Fokker Aerostructures, the 10-ton NH90 is claimed to be the best naval helicopter in its category. According to an AW representative, “The naval variant will remain the most potent anti-submarine and anti-surface warfare helicopter with search and rescue capabilities.” Among its other capabilities are maritime surveillance and control, limited airborne early warning, logistic transport and utility support, casualty evacuation and special operations including counter terrorism and anti-piracy. Built according to NATO specifications, NH90 is already in service with several navies worldwide and packs enough punch to make the AW officials confident about its prospects in India.

Adding to this confidence is the sale of 12 AW101 VIP helicopter to the Indian Air Force after a long delayed process which had several ‘almost there’ moments and the fact that in the last five years, of all the commercial helicopters bought in India, 50 per cent have been AgustaWestland’s. Giovanni Soccodato, senior vice president, strategy department, Finmeccanica, admits as much when he says, “Though we have been working in India through the Indian government-owned companies for several decades, AW101 is first big contract that we have won. Our biggest challenge in India is to win big contracts and be seen as a reliable provider of technology and systems.” Talking to the media team in Rome at Finmeccanica’s corporate office, Soccodato was acutely conscious of the importance of the Indian market and the pressure of delivering in the face of fierce global competition. “We face huge competition and pressure from the US,” he says, which is why it is important to develop and nurture partnership with local industry in India.

Partner, and not customer, was the refrain one heard frequently. However, over the next few days, several Finmeccanica officials from various companies admitted to the constraints of partnership in India, albeit off the record. The biggest limitation is the restriction on foreign direct investment (FDI). As one official said, “If I make an investment, whatever be the amount, and I bring my technology to the venture, I would want some control over the future of that technology. With a mere 26 per cent, I will not have that control. After all, technology is not just a system or a platform. It represents years of research and development. If I have at least 50 per cent equity, I can make a real investment in India. I can then invest in R&D and transfer serious technology.” But for the moment, the company is not letting this come in the way of its work in India. Perhaps, this is the reason that its chosen strategy is to work closely with public sector undertakings and the Defence Research and Development Organisation (DRDO) instead of Indian private sector.

WASS
The oldest Finmeccanica country working in India is WASS, which has been supplying torpedoes to the Indian Navy through a transfer of technology agreement with Bharat Dynamic Ltd (BDL) since 1974. According to CEO, WASS, Renzo Lunardi, “The collaboration started with A244/5 light weight torpedo. We have now won the contract for upgrading these torpedoes and increasing their lives by another 20 years by bringing them to A244/5 Mod.3 level.” WASS is also exploring the possibility of fitting them on Il-38SD. In addition to that, it has also been contracted by BDL to provide torpedo countermeasures and submarine applications. Once again, BDL will produce these under license-production.

However, it is the future opportunities that have prompted WASS to open a subsidiary office in Delhi, called WIN (see box). There are several openings at the moment where WASS is participating, either independently or through an Indian partner. The Indian Navy has issued an RFP for heavy weight torpedo (HWT) for the Scorpene submarine to which WASS has responded with its new generation Black Shark, developed in collaboration with the Italian Navy. The Indian Navy is looking at 98 HWT torpedo and WASS’ competition in this category is the German company Atlas Elektronik. Trials of the torpedo have already been concluded and WASS is hopeful of getting the contract. It helps that Black Shark is already deployed on other Scorpene submarines. Another contract that WASS has been eyeing is torpedo counter-measure system for surface ships. It has already responded to the RFI and is in discussion with BDL over work share.

The biggest WASS project in India, however, is yet to be realised. That is, joint development of a light weight torpedo along with DRDO’s Naval Science and Technological Laboratory (NSTL). WASS (50 per cent), along with DCNS and Thales (50 per cent) of France have formed a consortium called Eurotorp which is currently in talks with NSTL to jointly develop National Future Light Weight Torpedo which would be comparable in capabilities to the current top-ranker Mu90. There are a few hiccups, though. NSTL wants only certain technologies from WASS (Eurotorp), whereas WASS is reluctant to lend its name to a project where it cannot stand guarantee to the end-product. The NSTL team is scheduled to visit WASS shortly and it is hopeful that these creases would be ironed out. Playing its part, the Indian Navy has expressed an interest in acquiring 300 of these, if WASS is the partner in the project.

Yet another project that has been hanging fire for a while is harbour protection system. Along with its sister company, Selex Sistemi Integrati, WASS had proposed this integrated surface, air, acoustic and optic surveillance system to the Indian Navy before the November 26 attacks in Mumbai. However, at that time the government of India did not show much interest. Subsequently, the interest was aroused following the attacks but the government has been trying to restructure maritime security since then. “Now we don’t know who should we interface with, the Indian Navy, Indian Coast Guard, ministry of defence or ministry of home affairs. Certain aspects of the surveillance system stride different government departments,” Lunardi says with a smile. “But this is not peculiar to India,” he hastens to add. “This is the situation everywhere.”

Selex Sistemi Integrati
Like WASS, Selex Sistemi Integrati also has a long history of association with the Indian services. However, its starting point of contact was Hindustan Aeronautics Ltd (HAL) to whom it sold radar systems for the India Air Force in 1971. The naval association started more than a decade later with the sale of IPNS 10 Command and Control systems for Godavari class of frigates in 1984. This contract was also executed through HAL. Its relationship with Bharat Electronics Ltd (BEL) dates back to 2003 with sale of 12 Surface Radar Elements (SRE) for the IAF through ToT. Since then, SSI has worked with both PSUs for various SREs and command and control systems both in the defence as well as civil aviation sector.

Currently, the biggest project that SSI is looking forward to is Network Centric Operations System (NCOS) for the Indian Navy. The project will be executed by BEL, to whom the navy has given the order. BEL, in turn, has issued a global tender, to which SSI is one of the respondents. According to the SSI executives, this is a very big and important project which initially involves integrating 42 Ground Control Approach systems. As part of the trials vendors would be required to integrate all systems on board one platform, followed by integration of four naval units including an aircraft carrier, Tu-142 LRMR, Dornier SRMR and command and control centre. Subsequently, the fighter aircraft would also be data-linked. SSI is confident that it can do much more. “We have the capability of integrating this with the army and the IAF,” says one official briefing the press team.

In addition to this, SSI has also offered its RAN 40L radar to the navy through Cochin Shipyard Ltd (CSL) which is under evaluation now. It is also offering combat management system (CMS) for the Indigenous Aircraft Carrier (IAC). BEL is the prime contractor for this project and preliminary evaluation is currently underway. With BEL, SSI is also in talks to develop harbour protection optronic system for four naval bases in Mumbai, Cochin, Karvar and Visakhapatnam. Another opportunity that it has been eyeing is the Vessel Traffic Management System (VTMS) for Sethuradram Straits between India and Sri Lanka. Since the earlier tender was cancelled, SSI has been asked for a re-tender to be submitted in 2011. Aware of the sensitivity involved in the project, a senior SSI official shrugs wryly, “Since it has such religious significance, this may not happen in a hurry.”

Oto Melara
Working closely with Bharat Heavy Electricals Ltd (BHEL) through an open agreement, Oto Melara has been exporting naval guns since the mid-Nineties to the Indian Navy. The staple has been the 76/62 calibre Super Rapid (SR) light-weight gun with anti-surface and air defence capability which are currently deployed on board 22 Indian Navy and Coast Guard ships. BHEL has been license-producing these guns since 1995. According to Oto Melara officials, the agreement with BHEL entails even exports of these guns, if BHEL gets the opportunity. Among the future opportunities, Oto Melara is confident of its 127/64 Light-weight naval gun mount, which it has offered to the navy for its new class of stealth frigates along with its precision guided munition Vulcano. Currently in the development phase, Vulcano guided by GPS will have an extended range of over 100km. Oto Melara is confident that it will start production in five years.

(L to R) WIN Director Giuliano Enea, Italian Ambassador to India Dr Giacomo Sanfelice di Monteforte, Antonio Budroni, Cdr Sunit Bhatia
(L to R) WIN Director Giuliano Enea, Italian Ambassador to India Dr Giacomo Sanfelice di Monteforte, Antonio Budroni, Cdr Sunit Bhatia

Made in India
On 8 November 2010, WASS inaugurated its Indian subsidiary, WIN Blue Water Services Pvt Ltd in Delhi. An acronym for WASS India, WIN was inaugurated by the Italian Ambassador to India, Dr Giacomo Sanfelice di Monteforte. The new subsidiary will provide service and support to various industrial projects that WASS is involved in India. To reinforce its commitment to India, WIN has two directors at the moment, one Italian, Giuliano Enea and one Indian, Cdr Sunil Bhatia. The idea is to take advantage of the growing Indian demands for blue water capabilities and to align itself to its aspirations. Little wonder, India has been the first country that WASS has chosen to open a subsidiary in.

Talking at the inauguration, Enea said, “Indian market has immense potential. We, at WIN, with our expertise, would provide our assistance and advice to the parent and other foreign companies on how to approach the Indian market.” Bhatia was more forthright. According to him, one of the primary aims of WIN would be to implement WASS’ innovative logistics support line to India. “WIN will support WASS in its offset obligations,” he said. Hence, one of WIN’s main responsibilities is to find programme-specific partners in India. Once WIN finds its feet in India, it will spread its wings. Based in Delhi, it will also cater to the Middle Eastern and Far Eastern markets. As Paolo Girasole, Finmeccanica’s representative in India said during the inauguration, “We cannot recover our investment from India alone. We will have to cater to other customers in the region.”