Slow to Deliver

As delays in the acquisition process pile up, more needs to be done to maintain the pace of modernisation of aviation assets

Atul Chandra

As 2013 ends, the Indian Air Force (IAF) and the Indian Navy (IN) can look back at a year that saw a number of new aircraft being inducted; bringing both services closer to their modernisation goals. For the IAF, large scale exercises such as ‘Iron Fist’ and ‘Live Wire’ were ideal platforms to test new tactics and plans. Rescue operations mounted as part of ‘Operation Rahat’ showcased some of the IAF’s latest platforms in what was a lifesaving performance during the Uttarakhand calamity. The IN has also seen a resurgence in the capabilities of its air arm and the service itself was involved in a number of exercises with international navies.

As delays in the acquisition process pile up, more needs to be done to maintain the pace of modernisation of aviation assets

Every silver lining has a cloud, however! And a number of deals remain in limbo, creating bottlenecks and affecting the modernisation process. Among India’s many delayed projects, the ones involving helicopters seem to attract the ‘evil eye’! Vitally important to all three services, helicopters are significant cogs in operations across India’s diverse geography; ranging from the Himalayas, the mountainous north-east region and our large coast-line. For the Indian Army and IAF, the delay in acquisition of the 197 Reconnaissance and Surveillance Helicopters (RSH) means the Cheetah and Chetak will need to continue flying high-altitude operations around the Siachen and other areas. For the IN, modern Anti-Submarine Warfare (ASW) helicopters are necessary to safeguard its sea-going ships from marauding submarines and surface threats. Unfortunately, circumstances point to unavoidable and lengthy delays for all these projects.

The fallout of the AgustaWestland AW 101 VVIP helicopter contract has also impacted the RSH contract worth approximately Rs 3,500 crore. No decision has been made on either of the competing helicopters, Eurocopter’s AS 550 C3 Fennec and the Kamov Ka-226T, a decade after the Request for Proposal (RFP) was released. Apart from these, it now appears that the government is moving towards cancellation of the contract for 12 VVIP AgustaWestland AW 101 helicopters. This will cause problems for the IAF’s Air HQ Communication Squadron that operates VIP flights. This is because its fleet of eight medium lift Mi-8 helicopters have already seen their Total Technical Life (TTL) extended until next year, after which they will have to stop flying. With regards to the IN, it issued the RFP for procurement of 56 Naval Utility Helicopters (NUH) in August last year; this was followed three months later by the Indian Coast Guard RFP for 14 Twin Engine Helicopters. AgustaWestland’s AW 109 and Eurocopter’s AS AS565 Naval Panther are competing for this 56 helicopter contract. For the Coast Guard contract, AgustaWestland is taking on Sikorsky and Eurocopter. Also, pending is the USD 1 billion contract for 16 Naval Multi-Role Helicopters (NMRH) which has the NH Industries NH-90 competing with Sikorsky’s S-70B Sea Hawk.

Another programme to be further delayed is the replacement programme for the IAF’s 56 strong HS-748 ‘Avro’ transport aircraft. The AVRO replacement programme was to have been handled by the private sector along with the selected Original Equipment Manufacturer (OEM) and was to have completely bypassed HAL. However, a letter last month by the minister of heavy industries and public enterprises, Praful Patel, addressed to defence minister A.K. Antony questioned as to why Public Sector Undertakings like Hindustan Aeronautics Limited (HAL) were being kept out of the contract. With Ministry of Defence (MoD) officials now being asked to examine the issues raised by Patel, the replacement of these ageing transports is likely to take much longer. Responses to the RFP issued in 2013 are said to have been extended until March next year, according to media reports. Clearance for the deal had earlier been accorded by the Defence Acquisition Council (DAC), which is chaired by the defence minister himself.

The AVRO replacement programme placed stringent selection criteria on the companies vying for the deal. The pre-qualification criteria for selecting an Indian Production Agency (IPA), called for a public limited Indian company that has been registered for at least 10 years with foreign holding not exceeding 26 per cent excluding Foreign Institutional Investments (FII). The companies had to show capital assets not less than Rs 100 crores in India, with a minimum turnover of Rs 1,000 crores for each of the past three years. To be selected as the IPA, it must be an engineering company with an established track record in manufacturing. The transfer of technology (ToT) called for two phases: Semi Knocked Down kits (SKD) and Completely Knocked Down kits. The IPA would have had to produce 16 aircraft with a minimum Value Addition (VA) of 30 per cent that had to be achieved in India in the first phase. This would have been followed by the second phase in which 24 aircraft needed to be produced with a VA of 60 per cent. The IPA is also required to have Maintenance Transfer of Technology (MToT) to be provided by the OEM. This will enable ‘D’ level servicing to be carried out by the IPA.

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