Wednesday, 23 August 2017

Indian F-16 line will build at least three Block 70 fighters every month, claims Lockheed Martin

Fort Worth line moving to Greenville for now. But early decision would let India build F-16s for future international customers

Ajai Shukla
Business Standard
August 22, 2017

Lockheed Martin, the world’s biggest defence vendor, which is pitching strongly to sell the Indian Air Force (IAF) its new F-16 Block 70 fighter, told Business Standard on Tuesday that, if India chose its fighter, an Indian production line would churn out three-to-four F-16s every month.

“We want to create the capacity to build three or more aircraft per month; we could do four. It depends upon how many aircraft India needs and when it will buy those”, said Randy Howard, who markets the F-16 globally for Lockheed Martin.

For the IAF, which is making do with just 32-33 fighter squadrons instead of the 42 squadrons it wants to defend two borders with China and Pakistan, inducting 36-48 fighters per year would correct the shortfall quickly.

The Tejas production line in Bengaluru will build just eight fighters this year. It will take another two years to scale up to 16 Tejas annually.

Last year, even before the IAF solicited interest from multiple global aerospace vendors in building single-engine medium fighter aircraft in India, with transfer of technology to an Indian partner, Lockheed Martin announced a partnership with Tata Advanced Systems Ltd (TASL) to manufacture the F-16 in India by shifting its production line from Fort Worth, Texas.

That mammoth, one-mile-long manufacturing line was once regarded as an industrial marvel on which 13,500 workers churned out one new F-16 every day. But after the US Air Force bought its last F-16 in 1999, production tapered off to just 12 fighters per year. Next month, after having built 4,588 F-16 fighters, the Fort Worth line will transition to building the fifth-generation F-35 Lightening II fighter that America and its allies have ordered in the thousands.

But with India undecided about buying the F-16, and uncertainty over the proposed India line, Lockheed Martin is re-establishing F-16 production in Greenville, South Caroline. Countries like Bahrain and Indonesia are evaluating the acquisition of 19 F-16s and Lockheed Martin needs to keep the line alive.

On Tuesday, Howard indicated to Business Standard that, if India decided quickly to buy the F-16 Block 70, the Indian line could begin building fighters not just for the IAF, but also for other global F-16 orders.

Lockheed Martin has aggressively marketed the F-16 in India against its key rival, Saab’s new Gripen E fighter. The Swedish company is believed to be formalizing a partnership with the Adani Group.

There is another dark horse contender amongst Indian companies: Hindustan Aeronautics Ltd (HAL). With HAL no longer establishing a production line for licence producing Rafale fighters in India, the public sector aerospace giant has pitched for building whichever single-engine medium fighter the IAF chooses.

The defence ministry has reserved the production of the single-engine fighter for the private sector under the “strategic partner” policy, which aims to build private defence industry. Even so, it is not inconceivable that the government rules in favour of HAL, given the lack of experience in the private sector.

The “Make in India” programme demands indigenization of over 50 per cent of the production of defence equipment. Lockheed Martin executives claim they are ready to meet that target, having developed over 60 Indian suppliers in the Bengaluru-Hyderabad-Chennai area that will feed into F-16 manufacture.

Both Saab and Lockheed Martin claim they are offering India the better aircraft. Saab points to the brand new technology on its Gripen E fighter, which is still being flight tested, while Lockheed Martin claims it is offering the world’s most battle-tested combat aircraft.


With both aircraft likely to meet the IAF’s performance requirements, the winning bid could be the one that offers the lowest cost and the best industrial proposal.

Monday, 21 August 2017

As Sukhoi-30MKI production nears end, HAL worries about future orders

The Sukhoi-30MKI line at Nashik, which will complete delivery of its last 35 fighters by early 2020

By Ajai Shukla
HAL Bengaluru
Business Standard, 21st Aug 17

Hindustan Aeronautics Ltd’s (HAL’s) most lucrative cash cow, the Sukhoi-30MKI, is running dry. With only 35 Su-30MKI fighters left to deliver to the Indian Air Force (IAF) out of the 222 that HAL has been contracted to build, its Nashik production line, which builds 12 Su-30MKIs per year, would fall idle by March 31, 2020.

In better days, HAL has enjoyed order book backlogs of Rs 150,000 – 200,000 crore ($23.4 – 31.2 billion), with assured orders for Jaguar fighters, Hawk advanced jet trainers, Dhruv advanced light helicopters (ALHs), Tejas light combat aircraft and, most profitably, the Su-30MKI. Today, the company stares at a bleaker order book.

“I have just Rs 61,000 crore ($9.5 billion) of orders, including 35 Su-30MKIs and 73 Dhruv ALHs. That is just three years work, at our current turnover of Rs 20,000 crore ($3.1 billion per year). What lies ahead for HAL’s 20 manufacturing divisions built on 12,000 acres of land, and 30,000 skilled employees? Over the years, the government has invested Rs 50,000 crore ($7.8 billion) in HAL”, says T Suvarna Raju, the company’s chairman and managing director.

This uncertainty is an operational concern for a company that needs to plan its production years in advance, including placing orders for “long lead items” on ancillary suppliers.

While there are prospects in the defence ministry pipeline, few concrete orders are at hand. HAL once expected that the Nashik manufacturing division could, after delivering the last Su-30MKI, be used for building the Indo-Russian Fifth Generation Fighter Aircraft (FGFA). But New Delhi is dragging its feet in concluding a contract with Moscow, even after an okay from a defence ministry expert committee. The FGFA’s future and timelines are uncertain.

To keep the Nashik facility occupied, HAL hopes to overhaul the entire Su-30MKI fleet there. The fighter must be overhauled after completing 1,500 flying hours or 14 years in service, whichever comes first. The IAF calculates that its fleet of 272 Su-30MKIs would, at its peak, require 30 fighters to be overhauled each year.

It was planned that HAL Nashik would overhaul 20 fighters per year, while the IAF’s 11 Base Repair Depot, also located at Nashik, would overhaul the other ten.

“Now we are thinking differently. Rather than have HAL Nashik lying idle – with its 7,000 employees and 4,000 acres of real estate -- we should enhance our capacity and overhaul all 30 Sukhois ourselves”, says Raju.

Overhauling a fighter involves stripping it to its bare bones, checking each system and sub-system, replacing worn-out components, and then reassembling the rejuvenated fighter.

Over each fighter’s total service life of 6,000 flying hours or 30-40 years, it would be overhauled thrice – adding up to 816 overhauls for the 272-strong Su-30MKI fleet. Doing this in India is significantly cheaper than flying each fighter to Russia.

Meanwhile, in Bengaluru, HAL is ramping up the production line for building the Tejas Mark-1 fighter, but has orders in hand for only 20 aircraft. The defence ministry has cleared the purchase of another 83 Tejas Mark 1A, but an actual contract would most likely be years away.

Consequently, HAL is staking a claim to manufacture a “single-engine fighter”, for which the IAF has sent out “requests for information” (RFIs) to global vendors. It is proposed that the selected fighter be built in India by a private Indian firm that the defence ministry nominates as a “strategic partner” for fighter aircraft. Lockheed Martin’s F-16 Block 70 and Saab’s Gripen E are considered frontrunners in this contest.

HAL’s Raju says: “It is hard to understand the logic of giving the ‘single engine fighter’ contract to a private sector ‘strategic partner’, when so much of HAL’s capacity will soon be lying idle.”

Raju points out that the new policy on Strategic Partners (SP) requires the defence ministry to satisfy itself that the capacities of defence public sector undertakings are being adequately utilised before allocating production to a private sector strategic partner.

Both Lockheed Martin and Saab have tied up with private Indian firms to build their fighters in India, if it is chosen by the IAF. In June, Lockheed Martin and Tata Advanced Systems Ltd (TASL) announced a partnership to build the F-16 in India; while Saab has an unannounced agreement with the Adani Group to build the Gripen E. Yet, sources confirm that both foreign vendors would much rather work with HAL, which has decades of experience in building combat aircraft.

In contrast the Adani Group has no experience in building even an aerospace grade component. TASL has recent experience in building aerospace assemblies under licence, but has never assembled an aircraft or designed a significant component or assembly. 

Sunday, 20 August 2017

Border Roads granted boosted financial powers to improve border connectivity


Concern at tardy road building on northern border, while China races on

By Ajai Shukla
Business Standard, 21st Aug 17

With the Border Roads Organisation (BRO) far behind schedule in constructing 73 approved “Indo-China Border Roads” along the northern borders, the defence ministry on Sunday empowered BRO officials with enhanced financial powers.

The Chief Engineers, key officials who head BRO projects spread across the border states – with project names like Himank (Ladakh), Vartak (Arunachal Pradesh) and Beacon (Kashmir) – will now enjoy enhanced financial powers that are 5-10 times more than their earlier financial limits.

The defence ministry states this will “avoid delays on account of references between the Chief Engineer and HQ DGBR (Headquarters, Director General Border Roads) and also between HQ DGBR and the Ministry.”

BRO’s road building has lagged, while China has constructed a wide-spread network of roads that allow their troops to reach the border quickly on vehicles. In contrast, Indian foot patrols must march long distances to reach the same areas.

With only 27 roads completed of the 73 “strategic roads” approved for the Sino-Indian border, the defence minister assured Parliament on July 28 that the balance roads would be completed by December 2022.

The earlier financial powers permitted a Chief Engineer to approval “departmental works” up to Rs 10 crore, and the ADGBR (Assistant Director General Border Roads) up to Rs 20 crore. All “contractual works” had to be referred to the DGBR, who could sanction expenditure only up to Rs 50 crore.

Enhancing financial powers at all levels, the defence ministry “has now approved that for both departmental and contractual mode of execution, a Chief Engineer of BRO can accord administrative approval up to Rs 50 crore, ADGBR upto Rs 75 crore and DGBR up to Rs 100 crore.

For regular contracting, a Chief Engineer’s powers have been enhanced tenfold from Rs 10 crore to Rs 100 crore; the ADGBR’s powers fifteen-fold from Rs 20 crore to Rs 300 crore; and the DGBR’s powers for contracts above Rs 300 crore.

Decentralised financial powers for Border Roads

(all figures in Rupees)

Chief Engineer
ADG Border Roads
DG Border Roads

Earlier
Now
Earlier
Now
Earlier
Now







Administrative approval of works
10 crore*
50 crore^
20 crore*
75 crore^
50 crore^
100 crore^







Execution of contracts
10 crore
100 crore
20 crore
300 crore
Above 20 crore
Above 300 crore







Outsourcing of consultancy
10 lakhs
2 crore
50 lakhs
5 crore
2 crore
Above 5 crore







Procurement of indigenous    construction equipment
-
-
-
-
7.5 crore
100 crore







Procurement of imported construction equipment
-
-
-
-
3 crore
100 crore

*          Only for Departmental Works
^          For Departmental and Contractual Works

“With this delegation, the entire tendering process including acceptance of bids would be completed at the level of Chief Engineer/ADGBR for a majority of the contracts”, stated the defence ministry.

In a useful departure from the earlier policy, the DGBR has been granted full powers to determine the usage norms and life span of construction equipment, which was hitherto done by the defence ministry. For example, if the DGBR assesses that a bulldozer operating at 16,000 feet altitude in the Daulat Beg Oldi sector would have a reduced life span compared to one operating at 11,000 feet near Leh, he is now empowered to introduce the new norm.

In 2015, the BRO was transferred from the Ministry of Road Transport and Highways to the defence ministry to improve functioning. On May 6, 2013, the defence minister told parliament that the Cabinet had approved raising the BRO’s manpower strength to 42,646 personnel.

Despite attempts at reform, the BRO remains a divided organisation, with friction between BRO cadre officers, and army officers posted on deputation. The BRO cadre resents a large number of top executive and command positions going to the army.

Friday, 18 August 2017

First violent clash between Indian and Chinese troops in Ladakh, where China has the advantage



By Ajai Shukla
Business Standard, 18th Aug 17

The two-month-long confrontation between Chinese and Indian troops in Doklam, on the Sikkim-Bhutan border, is raising tempers elsewhere on the Sino-Indian border, most notably Ladakh, where China enjoys an operational and logistic advantage over India, unlike large sections of Sikkim and Arunachal Pradesh.

For decades, Indian and Chinese patrols have confronted each other with relative restraint. At worst, words would be exchanged and some pushing and jostling carried out before both sides disengaged and returned to their camps. Even during longer intrusions, like at Depsang in 2012 and Chumar in 2013, both sides scrupulously avoided physical violence.

This absence of bloodshed has been instrumental in ensuring a peaceful Line of Actual Control (LAC), as visualised by the Sino-Indian “Peace and Tranquillity Agreement” of 1993.

On Independence Day, however, mounting Chinese frustration boiled over at the scenic Pangong Lake. At about 7 a.m., a couple of hours before the two sides exchanged traditional gifts of sweets at nearby Chushul, a Chinese patrol consisting of “border defence” troops from their post at Khurnak Fort began pelting stones at an Indian patrol that had come to the same location – the hotly disputed “Finger 5” area.

The Indian patrol consisted of a mix of personnel from the Indo-Tibet Border Police (ITBP) and army soldiers from the local infantry battalion. They apparently retaliated before their commanders reined them in and defused the situation.

Participants in that clash say the Chinese were carrying iron rods, in addition to their personal weapons. This was apparently because an Indian patrol to the same area, the previous day, had carried wooden sticks (lathis).

No injuries were caused by firearms or the sticks, but there were minor bruises and cuts caused by the stone-pelting.

“We were restrained all through, but the Chinese border guards were very aggressive. There were a lot of abuses shouted at one another, but that was a waste in the absence of interpreters”, says an Indian officer, tongue-in-cheek.

“The code of conduct that has held since 1993 is now under stress. We are aware that Doklam is a factor on the Chinese side. But we are trying to ensure that the situation is not complicated by an incident where soldiers from either side are hurt. That would complicate Doklam even further”, he said.