Saturday, 29 August 2015
By Ajai Shukla
Business Standard, 29th Aug 15
The Khemka’s of the Sun Group will be key arbiters in the billion-dollar decision on whether Russian Helicopters would partner Hindustan Aeronautics Ltd (HAL), or Anil Ambani’s Reliance Group, in building 197 Kamov-226T reconnaissance and observation helicopters in India.
Nand Khemka, whose Sun Group has done successful business in Russia for decades is close to Moscow’s power centres, including President Vladimir Putin. He is a member of the Russian prime minister’s “Foreign Investment Advisory Council”. His son, Shiv Khemka, is on the board of Russian Helicopters.
Business Standard learns that Shiv Khemka, who is advising Russian Helicopters on this proposal, has assembled a team of experienced Indian experts in helicopter manufacture. They are evaluating whether it would be better to go with HAL’s tried and tested record of working with Russia, or with Ambani’s new company, Reliance Defence and Aerospace (RDA), which has no experience, but enjoys the advantages of the private sector.
Contacted for comments about the role played by Sun Group, Russian Helicopters declined to comment, but did not deny its involvement.
Recent media reports in the Economic Times and Times of India have reported that Russian Helicopters --- an umbrella corporation that includes all Russian helicopter building companies --- has chosen Anil Ambani’s Reliance Group as its partner. In fact, no such decision has been taken.
Russian Helicopters has valid memoranda of understanding (MoUs) with both Indian entities. The MoU with HAL undertakes to partner the Indian aerospace monopoly in an earlier Indian enquiry for vendors to build 197 light helicopters in the “Buy & Make (Indian)” category. This required Indian vendors to bid, supported by a foreign technology partner.
Simultaneously, Russian Helicopters signed a generic MoU with Anil Ambani’s Reliance Defence and Aerospace, under which the Reliance Group is pursuing most of its defence ventures. This MoU is not directed towards any specific contract, but speaks of broad-ranging cooperation in helicopter building.
The Reliance MoU with Russian Helicopters is much like the shipbuilding MoUs that Anil Ambani’s newly acquired Pipavav Shipyard has signed with Russian shipbuilders. Defence industry experts point out that, while such MoUs are useful in generating a speculative media buzz, there is no certainty they would culminate in actual defence contracts.
Even as Russian Helicopters evaluates its options, advised by Sun Group experts, decision-makers in Moscow say New Delhi will have the final word on the Indian partner. Says Sergey Chemezov, Rostec CEO, who oversees Russia’s high-technology industry and is a close associate of President Putin: “We expressed our commitment to work with either of two companies – Reliance of Mr Ambani and HAL, and it is up to the Indian government to decide who to grant this project, who they feel is better suited for this. For us this is no different, we could work with either.”
Vadim Ligay, the deputy chief of Russian Helicopters says, while the contract is still being negotiated, “On behalf of Rostec, Russian Helicopters and Russia I believe we are ready to work with any company that will be chosen by the Indian side.”
Individuals close to the Russian evaluation indicate they are inclined towards HAL. They visualise the Bangalore-based company responsible only for assembly and final integration of the Kamov-226T, while a range of carefully chosen private sector Indian companies, identified as Tier-1 and Tier-2 suppliers, would build key components like the transmission, rotors, and cockpit. HAL would assemble these into a helicopter.
This would ease the path for HAL, which is already awash with Indian military orders for more than 200 indigenous helicopters, including the Dhruv, the Light Combat Helicopter and the Indian rival to the Kamov-226T, the Light Utility Helicopter.
Ligay of Russian Helicopters confirms that the Kamov-226T contract would include a provision for offsets, in addition to the “Make in India” aspect.
For now, the Reliance Group is powering ahead with its defence initiative. On Friday, the Maharashtra government handed over 290 acres for a facility that RDA intends to build near Nagpur.
The procurement of 197 light helicopters dates back to the late-2000s and was cancelled after Eurocopter was selected as winner in circumstances that were later deemed suspicious. It was re-tendered as a competitive contract, but then, in December 2014, at an Indo-Russian summit meeting in Delhi, President Putin asked Prime Minister Narendra Modi, and was granted the contract on an inter-governmental basis.
In May 2015, the apex Defence Acquisition Council approved the purchase on nomination of the Kamov-226T.
The Kamov-226T is a 3.5 tonne, two-pilot, light helicopter that is specially modified with a new engine for Indian requirements, primarily high-altitude operations along the Himalayan borders. Like all Kamov helicopters, the Kamov-226T has contra-rotating rotors --- or two main rotors that rotate in opposite directions. This does away with the need for a tail rotor, making the helicopter lighter, and improving manoeuvrability in the mountains.
Even as 197 Kamov-226T helicopters are built, HAL will build 187 Light Utility Helicopters. The IAF will, thereafter, be managing a two-type fleet of light helicopters, in addition to the existing Cheetah/Cheetal helicopters until they are phased out of service.
Friday, 28 August 2015
The T-50 is silhouetted against the sun while performing at MAKS 2015 in Moscow
By Ajai Shukla
Business Standard, 28th Aug 2015
The on-going MAKS 2015 air show in Moscow features an impressive flying display by the Sukhoi T-50, the fifth-generation prototype fighter’s first public outing in two years. But even the rousing applause fails to mask the disappointment of Russian officials at the Indian Air Force’s (IAF’s) foot-dragging in co-developing the T-50 into a “fifth generation fighter aircraft” (FGFA) that the IAF will buy.
Well-informed sources in Moscow say the IAF vice chief has written a letter that effectively blocks the FGFA project. It criticises 27 different aspects of the FGFA, raising questions that must be answered before New Delhi and Moscow put $2.5 billion each into jointly developing the advanced fighter.
Business Standard also learns the IAF has vetoed a Russian offer to co-develop a fifth-generation engine for the FGFA. This is baffling to the Russians, given the Defence R&D Organisation (DRDO) long-standing attempts at joint engine development in order to end India’s expensive dependency on foreign vendors for aero engines. An internal DRDO estimation reckons that India will import aero engines worth Rs 3,50,000 crore over the next decade.
After the DRDO failed to develop the Kaveri engine to the level where it could power the indigenous Tejas Light Combat Aircraft (LCA), it strived to persuade French engine-maker, Snecma, to co-develop an engine. But Snecma declined to share key technologies, especially those relating to materials that can withstand the hellish temperatures created in the engine’s combustion chamber.
Nor has Washington agreed to share these technologies, even after President Barack Obama agreed during his January visit to New Delhi that a “joint working group” would explore US-India cooperation in engine technology.
DRDO and Hindustan Aeronautics Ltd (HAL) officials say the Russian offer of engine co-development fits well with the FGFA project itself, since the engine will power the same fighter. Currently, the Sukhoi T-50 is powered by the NPO Saturn AL-41F1, which only is a souped-up version of the AL-31FP engine that powers the Sukhoi-30MKI. A brand new, more powerful, engine is needed to let the FGFA supercruise, or fly at supersonic speeds while cruising without an afterburner. This is considered essential for a fifth-generation fighter.
Military aerospace experts worldwide believe that, given Moscow’s economic distress, the T-50 project badly needs India’s financial partnership to move forward. So far, the Russian Air Force has ordered only one squadron of T-50s (about 20 fighters).
Sergey Chemezov, who heads Rostec, the powerful Russian high-technology agency, downplays India’s delay. “As for the involvement with India, there is a certain delay, though this is not something that we (Russia) can be responsible for. On our end we can fully continue the development of the project as per our commitments,” Chemezov told Business Standard.
But even the defence ministry is questioning why the IAF is delaying a project it has earlier championed, and to which India has committed itself with an Indo-Russian inter-governmental agreement (IGA) and the expenditure of about $300 million in a “preliminary design phase”.
Critics of the IAF allege it is scuttling the long-term benefits of co-developing the FGFA in order to quickly buy the Rafale, preferably in numbers larger than the 36 fighters that the prime minister requested in Paris in April. A defence ministry official says that, in its eagerness to obtain the Rafale, the IAF has deliberately placed holds on every other aircraft procurement, including the FGFA, the Tejas and the plan to extend the Jaguar’s service life by fitting it with a new engine.
According to this official, the IAF aims to create the impression of a dangerous shortage of fighters, so that the government buys the Rafale quickly.
In another volte-face, the IAF has proposed that the FGFA not be co-developed, but limited numbers of the T-50 fighter be built in India.
If implemented, this would take India back to the 1970s and 1980s procurement model, which involved license-producing fighters like the MiG-21 and Jaguar in HAL without Indian involvement in designing or developing the aircraft.
In the 1990s and 2000s this was superseded by another procurement model that was first implemented in the Sukhoi-30MKI. In this, India specified modifications to the baseline Russian fighter, improving the Sukhoi-30 into the Sukhoi-30MKI through advanced avionics and a thrust-vectoring engine. The much-improved fighter continues to be licence-built in HAL Nashik.
However, by accepting the Sukhoi T-50 without improvements, the IAF would be reverting to the 1990s.
This would be a volte-face by the IAF. Three years ago, the IAF has specified 40-45 improvements that it deemed essential for the T-50, listing these out in a so-called “Tactical Technical Assignment”. This wish list included: 360-degree radar coverage by adding two sideward-looking radars; and more powerful engines;
The design and development needed for meeting the IAF’s requirements would constitute India’s work share of 25-30 per cent. If the IAF now demands the same fighter as the Russian Air Force, HAL’s work share would fall to zero. And the IAF would get a fighter designed for the Russian Air Force.
Wednesday, 26 August 2015
The Kamov-226 helicopter on display at the Moscow Air Show, MAKS 2015
By Ajai Shukla
(Truncated version in Business Standard, 26th Aug 15)
We drive out of Moscow along the Kutuzovskiy Prospekt, the city’s grandest avenue, named after the legendary marshal who halted Napoleon in 1812. Marshal Kutuzov burned down Moscow in a scorched earth campaign, and then destroyed the formidable French Grande Armee (Grand Army) through a frozen, 2,000 kilometre retreat back to France. As President Vladimir Putin drives to work every day from his dacha (country retreat) in Novo-Ogaryovo, 30 kilometres outside Moscow, he passes a Triumphal Arch commemorating Kutuzov’s victory.
We also pass the Park Pobedy (Park of Victory) commemorating the Great Patriotic War against Hitler from 1941-45, in which 27 million Russians died --- the heaviest price any country paid in World War II. This blood-soaked history, a part of Russia’s school curriculum, engenders the stubborn patriotism that has boosted Putin’s foreign policy approval ratings to 85 per cent after he annexed the Crimea last year, and continues to back ethnic-Russian separatists in Ukraine’s Donetsk and Luhansk regions.
However, Putin’s assertiveness has also invited damaging economic sanctions from the United States and the European Union, supported by allies like Australia. These have squeezed the important sectors that earn most of Russia’s money --- oil, banking services and defence exports. Battering the Russian economy further are plummeting oil prices, which are blocking Putin’s 2010 pledge to spend some 20 trillion roubles --- about $650 billion then --- to revamp his ageing arsenal.
After years of defence spending increases, Russia’s 2015 budget has hit a roadwall. Moscow has scaled back plans for buying 500 new warplanes in the five-year period from 2011-2016, as well as the new Armata tank and a host of warships. Earlier this year, authoritative Russian think tank, Centre for Analysis of Strategy and Technologies (CAST), forecast a Russian military spending crisis. “The modern Russian economy just does not generate enough resources to finance the current 2011-2020 rearmament program,” said the report.
That is why Russia --- traditionally secretive on matters relating to defence --- has unprecedentedly invited over 30 journalists (half from China, Vietnam, Thailand and India; and a similar number from Brazil, Argentina, Chile and Mexico) to tour its defence facilities. This includes your correspondent and another from one other Indian newspaper.
Leaving behind the Kuznetsovskiy Prospekt, we wend our way through scenic clumps of forest to the Park Patriot, a vast training-cum-exhibition ground outside Moscow. This is being extensively revamped to hold equipment demonstrations, exhibitions, and exercises with foreign militaries. With fewer orders from Moscow, the Russian arms industry must aggressively pursue more foreign orders.
“We plan to hold an annual military exposition here once the facilities are completed by 2017,” Lieutenant General Rafael M Timoshev, the Park Patriot deputy director tells the throng of journalists.
Yet, increasing exports will not be easy for Moscow. The Stockholm International Peace Research Institute’s 2015 Yearbook, which has studied defence sales trends in the five-year period from 2010-2014, finds that Russia is already the world’s second-biggest arms exporter, with 27 per cent of the export market. Only the United States is ahead with 31 per cent of the market. At third place is China, with 5 per cent of the market, edging out German and France, which also have the same figure, followed by the United Kingdom with 4 per cent.
Delegations from prospective buyer countries are evident at the MAKS 2015 air show, which President Putin inaugurated on Tuesday at Zhukovsky, a Moscow suburb. This year’s version of the biennial aerospace exhibition features 156 global and 584 Russian companies, with the host nation’s aerospace design strength on full display.
Tearing through the skies is the Sukhoi T-50, the Russian prototype of the Fifth Generation Fighter Aircraft (FGFA) that Hindustan Aeronautics Ltd (HAL) will co-develop with Sukhoi when protracted negotiations over the design partnership are finally concluded. But the T-50 appears to be in growing trouble. Today was the first public flight of the aircraft since the last MAKS show two years ago. And both the Russian and Indian air forces are reducing the numbers of aircraft they are committing to build.
The Indian Air Force was initially looking to build close to 220 FGFAs. That was reduced to 144, and uncorroborated media reports have recently indicated that this number could go down to about 75. That is why Russia needs more foreign buy-in.
Also on display is the giant Mi-26T2 helicopter, the world’s largest rotary wing machine. This was developed for the Indian heavy-lift helicopter tender but, after 2012, when New Delhi chose the American CH-47F Chinook, Russia is seeking alternative buyers.
Russia’s traditional reliance on India as a buyer is also evident with the spotlight on its new, light, multi-role helicopter --- the Kamov-226T --- which has been developed for the Indian tender for 197 light utility helicopters, first announced in 2003. Since New Delhi demands that it have the power to operate up to 6,100 metres, the Kamov-226 features a new, more powerful engine. A pair of Turbomeca Arrius 2G1 engines, each producing 580 BHP of power, have replaced the earlier Rolls-Royce Allison 250-C20R/2 engines, which produced only 450 BHP.
So keen is Moscow that India buy this helicopter that President Putin personally took up the issue with Prime Minister Narendra Modi during their summit meeting last year. Russia has proclaimed its willingness for a “Make in India” contract for this helicopter, but the jury in New Delhi is still out.
[Disclosure: The correspondent is visiting Russia at the invitation of Rostec, a Russian state body that promotes the development, manufacture and export of high-tech industrial products.]
Friday, 21 August 2015
By Ajai Shukla
Business Standard, 21st Aug 15
The mourners at the August 16 burial of former Inter-Services Intelligence (ISI) chief, Lt Gen Hamid Gul, included Pakistan’s current army chief General Raheel Sharif, and his predecessor, General Ashfaq Parvez Kayani.
Gul has always been influential within Pakistan’s security establishment. If National Security Advisor (NSA) Sartaj Aziz appears to hold the trump cards going into his Sunday meeting with his Indian counterpart, Ajit Doval; Gul and his contemporaries can legitimately claim credit. As ISI chief from 1987-89, and a member of Pakistan’s “deep state” for years thereafter, Gul was a pioneer and advocate of developing jihadi fighters as proxies to create Pakistani leverage in Afghanistan and India.
Even as western and Indian analysts highlighted the damage to Pakistan’s security fabric caused by “blowback” from a plethora of jihadi groups, Gul and his ilk --- many of them still in key positions of power --- continued to manipulate these groups as “strategic assets”, canalising their violence outwards through judicious “asset management”.
Pakistani analyst, Ayesha Siddiqa, points out that Gul, like numerous Pakistani generals after him, believed that “religious militancy could be used, but kept out of cantonments and other strategic areas”. This school of thought remains alive today.
Sartaj Aziz brings to New Delhi a newfound Pakistani confidence, stemming from its leverage in Afghanistan. This extends to the Taliban, other armed radical groups like the Haqqani Network and is also acknowledged by Afghan president, Ashraf Ghani.
“Both Washington and President Ghani have ceded a role to the Pakistan Army. But now, even Indian allies like Russia and Iran seem reconciled to Pakistan’s growing hold over Afghanistan’s future”, laments a senior Indian foreign ministry official.
This hold is increasingly evident. On July 30, the Taliban announced the death of Mullah Omar, its independent-minded former chief. Mullah Akhtar Mansour, who the ISI is believed to have influence with, succeeded Omar next day. Appointed Mansour’s deputy was Sirajuddin Haqqani, a key leader of the Haqqani Network, which was described in 2011, in Congressional testimony by Admiral Mike Mullen, then America’s top military commander, as “a veritable arm of the ISI”.
Pakistan’s growing influence in Afghanistan reflects Washington’s dependence on Islamabad. Indian foreign ministry officials see a new Pakistani confidence that makes it indifferent to dialogue with India. Since last August, when New Delhi cancelled talks after Pakistani High Commissioner Abdul Basit met separatist leaders from the Hurriyat Conference, Islamabad has shown no keenness to resume talks.
In fact, New Delhi is going ahead with the Aziz-Doval meeting, even though Basit says a Hurriyat meeting remains on the cards. Nor has New Delhi allowed the release by a Pakistani court of a key accused in the 26/11 Mumbai terror strikes, Zaki-ur-Rehman Lakhvi, derail the dialogue. Nor have a spate of cease-fire violations on the Line of Control and the international boundary been allowed to scupper talks.
In February, New Delhi abandoned its hard line, with Foreign Secretary S Jaishankar visiting Pakistan as part of a “regional familiarisation” tour, and effectively resuming contacts. In June, on Ramzan, Prime Minister Narendra Modi called up to greet his counterpart, Nawaz Sharif, setting the stage for a meeting in July in Ufa, Russia, where the two were attending a Shanghai Cooperation Organisation summit.
At Ufa, Mr Modi accepted his counterpart’s invitation to visit Pakistan in 2016 for the summit meeting of the South Asian Association for Regional Cooperation. The two prime ministers also agreed to talks on terrorism between their respective NSAs, which will take place on Sunday.
New Delhi has put a brave face on its back-pedalling. Diplomats argue that the joint statement at Ufa was an Indian triumph, with no mention of Kashmir, and with Pakistan accepting talks on terrorism, a subject it would be defensive on.
Islamabad, however, has taken the offensive, accusing New Delhi of fomenting terrorism in Baluchistan and, in cahoots with Afghan intelligence agencies, in the tribal areas of Khyber-Pakhtunkhwa, along the Pakistan-Afghanistan border.
The Bharatiya Janata Party (BJP), which had been expected to take a firm line with Pakistan, finds itself defensive. India’s equities in Afghanistan --- a decade of generous humanitarian aid and a deep pool of goodwill amongst Afghans --- will be manifest only over the long term. In the short term, this is overshadowed by Pakistan’s hard power leverage through armed groups.
President Ghani’s administration has begun protesting Pakistani violations of the Pak-Afghan border, but he remains for now in thrall of the Pakistan Army. General Raheel Sharif has already made at least four visits to Kabul.
Even so, analysts who know Afghanistan well say that Ghani’s reliance on Pakistan cannot be sustained in the face of the deep-rooted distrust that most Afghans have of their larger, more powerful and historically meddlesome neighbour. According to this perspective, Ghani, like his predecessor, Hamid Karzai, will have only a short-lived honeymoon with the Pakistan Army, after which its influence will wind down fast.
New Delhi’s diplomats also hope that Washington’s stance will change. The US Congress’ disenchantment with Pakistani duplicity has grown as the Taliban has killed hundreds of Americans, but the US State Department has condoned Pakistan’s actions to “keep channels open with Islamabad”. This however could change as campaigning gets under way for the US presidential election in November, and American public opinion pushes candidates to take a hard line against Pakistan.
Tuesday, 18 August 2015
By Ajai Shukla
Business Standard, 18th Aug 15
Last week, a navy delegation led by senior Indian admirals visited the United States (US) on a three-day mission that could eventually bind together the two navies for decades to come. A newly-formed “Joint Working Group (JWG) on Aircraft Carrier Cooperation” held its inaugural meeting in Washington after President Barack Obama and Prime Minister Narendra Modi agreed to cooperate in this field during the former’s Republic Day visit to India earlier this year. The JWG discussed how the US Navy --- the world’s most experienced and technologically advanced aircraft carrier power --- could assist India in building its own fleet of aircraft carriers. With India looking to build a “blue water navy”, i.e. one that can project power across thousands of miles of Indian Ocean, the first indigenous aircraft carrier, INS Vikrant, is already at an advanced stage of construction.
Indian naval planners have long argued the need to have three aircraft carriers in service. This would allow two aircraft carrier battle groups (CBGs) --- each a self-contained flotilla with air, surface and sub-surface capabilities --- to cover the Arabian Ocean and Bay of Bengal simultaneously, even whilst the third carrier is undergoing maintenance or overhaul. Each CBG, which includes a aircraft carrier, escort vessels (multi-role destroyers and frigates), anti-submarine corvettes, missile boats, logistics support vessels and submarines, is designed to engage in intense combat even without support from fighters operating from shore-based airfields.
The three-carrier dream remains elusive, even with two carriers in operational service today --- INS Viraat and INS Vikramaditya --- and a third, the INS Vikrant, likely to be completed in Cochin Shipyard Ltd (CSL) by 2018. INS Viraat, launched in 1953, is already the world’s oldest serving aircraft carrier and will retire when the Vikrant enters service. India’s third aircraft carrier, therefore, would only be the Vikrant’s successor, whenever that is built. Currently on the drawing board and referred to as INS Vishal (a name the navy has not confirmed) this could be the vessel that sees US-India high-tech naval cooperation bearing fruit.
Why does India need the US Navy’s help to build the Vishal, even after designing and building INS Vikrant in CSL? Because, India has only operated small aircraft carriers that displace less than 45,000 tonnes. The size of a carrier determines how many aircraft it embarks, the ballpark calculation being one aircraft for every 1,000 tonnes. The 45,000-tonne Vikramaditya embarks 36 aircraft --- thirty MiG-29K fighters and six Kamov helicopters. Yet this is not enough. Ideally, a CBG would like to field at least 50-55 aircraft when operating far from shore-based air support. That calls for at least a 65,000-tonne carrier, something that Indian shipyards have never built.
As important as numbers is the type of aircraft a carrier embarks. A crucial element of air battle is “airborne early warning”, delivered by AEW aircraft --- radar-equipped, airborne command posts that scan airspace for enemy aircraft, and direct friendly fighters towards developing threats. For this job, US Navy aircraft carriers embark the E-2D Hawkeye, a large, twin turbo-prop aircraft that could never get airborne from small carriers like the Vikramaditya or Vikrant. For this, the US Navy has long operated 100,000-tonne “supercarriers”, which launch aircraft with steam catapults --- a steam-driven piston that hooks onto the belly of an aircraft and accelerates it to take-off speed in just 2-3 seconds. The newest American supercarriers, starting with USS Gerald R Ford, which will join the fleet next year, feature an “electromagnetic aircraft launch system” (EMALS) that replace the steam catapult with an electromagnetic system that accelerates aircraft precisely to take-off speed. EMALS is smaller, lighter, quicker, and more powerful, and allows the take-off speed to be carefully calibrated for different types of aircraft, reducing stress and wear on their airframes. The electric power requirements of an EMALS system are too large for conventional generators to deliver; so nuclear propulsion is essential for a carrier fitted with EMALS.
This sums up the Indian Navy’s dilemma for its third aircraft carrier. It must choose between what it already has --- small, conventionally powered vessels that embark 30-35 combat aircraft that can be launched only slowly; or, alternatively, a large, nuclear-propelled vessel with EMALS that embarks 50-55 aircraft of varying types including force multipliers like AEW aircraft. The benefits of this are attractive, since this greatly enhances the power that a CBG can project. Even so, some strategists believe India would be unwise in investing so much money, capability and symbolism into a single vessel that might be sunk in war. Opponents of the “big carrier school” argue for greater numbers of smaller vessels like destroyers and frigates, covered by land-based aircraft (including those operating from archipelagic bases like the Andaman & Nicobar Islands) with their ranges extended by air-to-air refuelling.
It will be interesting to see in which direction the Indian Navy goes --- whether it chooses a conservative, tactical approach, like the army and the air force, or a bolder doctrine based on sea control and extended reach, of the kind that the US Navy imbibed from strategist Alfred Thayer Mahan. Henry L Stimson, US Secretary of War all through World War II, memorably described “the peculiar psychology of the [US] Navy Department, which frequently seemed to retire from the realm of logic into a dim religious world in which Neptune was God, Mahan his prophet and the United States Navy the only true church.”
Regardless of how doctrine evolves in the Indian Navy, their American counterparts already regard them as inevitable long-term allies. Last week, the Indian delegation was taken to the Virginia shipyard where the USS Gerald Ford is being completed, and introduced to EMALS. With the Defence Technology and Trade Initiative (DTTI) touted as the vehicle for easing US restrictions on technology, Defence Secretary Ashton Carter sees US assistance in aircraft carrier building as the lynchpin, and the two navies as torchbearers, of a close defence relationship. Strategist Ashley Tellis has argued that Washington might well assist India with developing a nuclear reactor for powering INS Vishal and future Indian aircraft carriers. But for that, a top-level request would be essential (i.e. PM-to-President) along with firmer assurances of strategic alignment. In the US system, every grant of assistance must be sponsored by the military service it relates to; and the US Navy will enthusiastically support the provision of cutting-edge technology to the Indian Navy if it believes that would bring it clear operational benefits.
Despite New Delhi’s ambivalence on strategic partnership with America, US vendors are delivering an increasing share of India’s arms imports, inexorably eating into Russia’s share (see chart). India has already spent close to $10 billion in outright US purchases; most of them government-to-government, while co-developing platforms like aircraft carriers have not gotten off the ground. Last week, America’s ambassador to India, Richard Verma, told a Delhi audience “I see no reason why the United States and India cannot build fighter aircraft together, right here in India.” While that may be a distant dream, New Delhi must work with the world’s premier aircraft carrier power to retain crucial control over our regional waters.
Monday, 17 August 2015
By Ajai Shukla
17th Aug 15
(Truncated version of this article is in Business Standard)
Political pundits and the media focused keenly on Independence Day on whether Prime Minister Narendra Modi would grant “One Rank, One Pension”, or OROP, to retired soldiers, sailors and airmen. The defence ministry’s Department of Ex-Servicemen’s Welfare says India has 22,50,000 military pensioners (hereafter referred to as veterans), and there are another 6,00,000 widows of veterans who are entitled to lifetime pensions. Assuming conservatively that each pensioner has a family of four, over a crore voters would directly benefit from OROP. This is a significant political constituency, especially in Punjab, Haryana, Himachal Pradesh and Uttarakhand.
The money involved is significant too. This year’s budget allocated Rs 54,500 crore for defence pensions; this would rise by about 40 per cent with the additional Rs 18-20,000 crore needed to meet all the veterans’ demands. India does not count military pensions in the defence budget; even though pensions, like salaries, are a component of manpower costs. The full grant of OROP would raise military pensions to Rs 75,000 crore, only slightly less than the salary bill of Rs 93,216 crore.
What exactly does OROP involve? In essence, it means that all veterans who retired at the same rank should get equal pension, irrespective of when they retired, because they performed the same functions whilst in service and must make ends meet in the same economic conditions today. Currently, each veteran gets a pension that is half the salary he drew on the date he retired. Since military salaries have steadily risen, as determined by six successive “pay commissions” (the Seventh Pay Commission is currently deliberating another increase), veterans who retired earlier get significantly lower pensions than those who retire today.
The demand for OROP goes back to the Third Pay Commission in 1973. However, this is the first time the veteran community has organised itself so publicly. Occupying the emotional high ground --- not difficult in a country where the military is loved and respected --- veterans have signed letters in blood, returned gallantry and service medals and staged public dharnas (sit-ins), including a few hundred metres from Parliament in New Delhi. Largely siding with the veterans, the media has lambasted the government for tarrying in making good its promises. Criticism continues even after Mr Modi assured veterans on Independence Day that discussions were in their final stages and OROP would be paid out shortly.
These unprecedented public protests have their roots in late 2013, when the Bharatiya Janata Party (BJP), and its chief election strategist, Amit Shah, targeted the veteran constituency as a vote bank. Addressing ex-servicemen at a September 2013 rally in Rewari, Mr Modi promised his government would implement OROP. With the veteran community naturally biased towards the BJP’s right-wing politics and tough talk on Pakistan and terrorism, ex-servicemen rallied strongly behind Mr Modi, believing that OROP would be quickly implemented.
Meanwhile, the United Progressive Alliance (UPA) government --- staring at electoral defeat --- also promised early implementation of OROP, even allocating Rs 500 crore in its “vote-on-account” in February 2014. This, it turns out, was a token sum, as was the Rs 1,000 crore the National Democratic Alliance (NDA) government allocated in its first budget in July 2014.
The dimensions of the problem became evident to the NDA government once the defence and finance ministries began doing their sums. A key question related to when OROP should be implemented from. Implemented prospectively the payout would be Rs 10,000 crore; implemented from early 2014, when it was announced, twice that amount would be needed.
Given the fiscal buffer provided to the government by low oil prices, the financial blow could be absorbed. However, given the bitter inter-service rivalry between the military and the Indian Administrative Service (IAS) officials who man key positions in the defence and finance ministries, officials have raised alarmist questions about the spill-over effects of OROP, and the prospect of other services, especially “central armed police forces” (CAPF) like the Border Security Force and the Central Reserve Policy Force also demanding OROP.
For many veterans, the delay in OROP reflects a more serious and longer-standing conspiracy between civil servants and politicians to whittle away the relative status of the armed forces. This is evident from a letter written by four well-respected former chiefs --- General SF Rodrigues, Admiral L Ramdas, Admiral Arun Prakash and Admiral Sureesh Mehta --- who wrote to President Pranab Mukherjee that the scuttling of OROP is “the culmination of a process by which successive Pay Commissions have been used to whittle down the financial and protocol status of the military over the years vis-à-vis their civilian counterparts”.
This grudge will remain even after the full grant of OROP, which now seems a matter of time. What must be addressed, however, is the key issue highlighted: the military’s growing manpower costs. It has been earlier recommended that, instead of recruiting soldiers, sailors and airmen for 15 years and then paying them pensions for life, recruitment should be for just 5-7 years, after which trained personnel are laterally absorbed into CAPFs, where easier service conditions allow them to serve till the age of 55-60 years. This would make for a younger army, and also reduce the growing pension liability.
Thursday, 13 August 2015
DRDO's aero chief says private sector will build components of Tejas Mark II
By Ajai Shukla
Business Standard, 13th Aug 15
Hindustan Aeronautics Ltd (HAL) has aimed a serious blow at the Tejas Mark II Light Combat Aircraft (LCA), with a letter telling the Indian Air Force (IAF) that it does not have the manpower to work on developing an improved version of the current Tejas Mark I.
The Bengaluru-based public sector aviation monolith says its engineers are already stretched with existing projects, including the Tejas production line, design and prototype manufacture of a basic trainer aircraft, the Hindustan Turbo Trainer – 40 (HTT-40); and the testing and production of the Sitara Intermediate Jet Trainer (IJT).
HAL has suggested that, instead of waiting for the Tejas Mark II the IAF should buy 80 Tejas Mark I-A, an interim fighter that would be more capable then the Mark I, but less than the Mark II will be.
Business Standard has learned of a heated debate under way between the user of the Tejas, the IAF; its designer, the Aeronautical Development Agency (ADA); and its manufacturer, HAL.
The IAF has already committed to buying 40 Tejas Mark I. In addition, the air force has indicated it will buy four-to-five squadrons (80-100 fighters) of the Tejas Mark II when it is ready.
HAL worries about the future of its production line after it delivers 40 Mark I fighters by end-2019. It plans to build four Tejas Mark I by March 2016; another eight by March 2017; and crank up production to 16 fighters annually by March 2018. After 2019, the production line would idle till the Tejas Mark II enters production.
Senior HAL and ADA officials agree the Tejas Mark II is unlikely to enter production till 2023-24. Developing the Mark II involves fitting in a more powerful engine --- the General Electric F-414INS6 replacing the current F-404IN --- and upgrading avionics and weaponry. With prototype development likely to take till 2019, another three to four years would go in flight-testing the Tejas Mark II and preparing production drawings.
HAL, therefore, wants the IAF to buy 80 Tejas Mark I-A to keep the production line occupied from 2020 to 2023-24.
The Mark 1-A would be faster and more agile than the current Mark I. Developing it would involve shaving off 800 kilogrammes from the current fighter, especially from systems like the landing gear, which are currently “over-engineered”, or built heavy, for safety. HAL also proposes to remove 300 kg of dead weight distributed across the Mark I to balance it evenly.
HAL argues that the Mark I’s GE F-404IN engine, which generates 84 kiloNewtons (kN) of peak thrust, would meet the IAF’s performance requirements, if one tonne is shaved off the Tejas Mark I’s empty weight of 6,500 kg. In that case, the GE F-414INS6 engine’s 98 kN of thrust would be needed only for the naval Tejas, which must take off from the short runway of an aircraft carrier deck.
The IAF and ADA are taken aback by HAL’s reluctance to participate in developing the Mark II. Even though the Tejas project is managed by ADA --- a branch of the Defence R&D Organisation (DRDO) --- HAL has developed important components. Besides many smaller systems, HAL designed the Tejas structure, its undercarriage and electrical supply system. It would have to upgrade these for the Mark II.
“We have completed the preliminary design of the Tejas Mark II, but now the detailed design will be done. HAL would have to refine and upgrade the systems it developed for the Tejas”, points out a senior ADA official.
HAL’s withdrawal stems from its deep-rooted concern over the Tejas assembly line, which was established at a cost of Rs 1,556 crore, with HAL paying half and the remaining shared between the IAF and navy. Keeping the line running is essential, so that skilled manpower does not have to be redistributed; and a steady flow of orders can be placed on sub-vendors.
HAL sees a four-year gap between the last Tejas Mark I and the first Tejas Mark II as seriously disruptive. Building 80 Tejas Mark I-A is a way of bridging that gap.
However, the IAF and ADA point to HAL’s poor record of adhering to manufacturing schedules. They say HAL, which is more than a year late in building the Tejas Mark I, is unlikely to build and deliver 40 Tejas Mark I by 2019. So far, the Tejas line has built just one fighter.
“We can assure HAL that, if it accelerates the delivery of fighters to the point where it seems likely to deliver 40 Tejas Mark I before the Mark II is ready, we will certainly place orders for more Mark I fighters. The assembly line will not be kept idle. That is our assurance,” says a senior IAF officer.
To overcome HAL’s difficulties with building and assembling the Tejas Mark I, ADA proposes to adopt a new production model for the Mark II. The DRDO’s aerospace chief, K Tamilmani, tells Business Standard that seven private sector companies will be chosen to manufacture the fighter’s modules (systems and sub-systems). HAL will be responsible for integrating them and testing and delivering them to the IAF.
“If we have to accelerate production and build the Tejas Mark II to the requisite quality and quantity, HAL cannot be saddled with responsibility for everything. Instead, private companies will build modules, while HAL will be lead integrator,” says Tamilmani.
Wednesday, 5 August 2015
By Ajai Shukla
Business Standard, 5th Aug 15
On Thursday, July 30, the Afghan government and the Taliban announced the death of Mullah Mohammed Omar Akhund, the shadowy, fundamentalist cleric who had led the grouping since it was founded in 1994. Omar’s leadership had seen the Taliban through six years of power in Kabul and more than a decade of unyielding insurgency against a powerful US-led international coalition that backed what he called the “puppet regime” in Kabul.
It remains unclear how and when the government of Afghanistan became aware of Mullah Omar’s death. For the past five years, Kabul had repeatedly tried to initiate a “reconciliation dialogue” with him. Nor did the Taliban explain why it kept the death of its former leader secret for two years, or why it issued a statement in Omar’s name before Eid last month, endorsing the peace dialogue that Pakistan and China brokered between the Taliban and the Kabul government of President Ashraf Ghani.
Even more curious is the silence that the government of Pakistan has maintained on Mullah Omar’s death. This is especially odd, given that the Taliban leader has lived in Pakistan since 2001, virtually a prisoner of the Inter-Services Intelligence (ISI). If Mullah Omar had indeed died in hospital in Karachi two years ago, Islamabad should have known it before anyone else.
Those who are suspicious of Pakistan’s role in these events believe that Mullah Omar’s longstanding opposition to reconciliation with the ill-equipped and shaky Kabul regime may have outlived its use. Mullah Omar now needed to be replaced by a more pragmatic (read pliant) leader. This ruled out his 26-year-old son, Mullah Mohammad Yaqoub, who is as hard line as his father.
Instead, Mullah Akhtar Mansour was declared the Taliban’s new leader on July 30. This was followed by some surprising developments. Mansour’s first message was a 30-minute audio recording that called for unity within the Taliban. Mansour distanced himself from the on-going peace talks in Pakistan, terming them “propaganda campaigns by the enemy”. He declared the Taliban would “continue our jihad until we bring an Islamic rule in the country”. At the Taliban’s request, talks scheduled with President Ashraf Ghani’s representatives were postponed until further notice.
A possible explanation for Mullah Mansour’s tough position, which replicates that of Mullah Omar, is that it is mere posturing to win points with hardline Taliban elements that are not inclined to dialogue. This could give way to Mansour eventually “coming around” at Islamabad’s persuasion, and officially endorsing the peace talks.
In an indicator of the ISI’s hand in the succession, the new Taliban leadership includes a deputy from the Haqqani network, Sirajuddin Haqqani, son of the legendary Jalaluddin Haqqani, who reportedly died in April 2013. In 2011, Admiral Mike Mullen, then America’s top military commander, deposed before the US senate that the Haqqani Network was a “veritable arm” of the ISI. The Haqqanis, who operate from North Waziristan, have held themselves aloof from Mullah Omar’s so-called “Quetta Shura”, which is based in Southern Afghanistan. Yet, now, in a move that suits the ISI design, Jalaluddin Haqqani has apparently risen from the dead to post a statement on the Taliban website, urging factions to unite under Mullah Mansour.
A split house
Even so, divisions are fast appearing within the once-monolithic Taliban. On Sunday, Mullah Omar’s brother, Mullah Abdul Manan, issued a statement saying that Mullah Mansour’s appointment had been carried out in haste and was not acceptable to many Taliban factions. The fragility of Taliban unity is also evident from reports that Mullah Omar’s son, Mullah Yaqub had been killed by a rival faction.
While Mullah Omar’s custodianship of Afghanistan from 1996 to 2001 is remembered for fundamentalist oppression, the Taliban leader never kowtowed to Pakistan, even though Islamabad remained a steadfast supporter. Mullah Zaeef, the Taliban’s trusted ambassador to Pakistan, recounts how Mullah Omar rebuffed Islamabad when it conveyed Washington’s message to hand over Al Qaeda leader, Osama bin Laden. Zaeef revealingly describes the Taliban’s fraught relationship with the ISI, and the nationalist Omar’s determination to act in Afghanistan’s best interests, not those of the ISI and of Pakistan.
The Taliban regime’s fate was sealed after the 9/11 strikes on the US. According to legend, Mullah Omar left Afghanistan in November 2001, travelling on the pillion of a motorcycle from Kandahar to Quetta. Since that day, when he became a guest of the ISI, there has been no forensically verifiable evidence of his being alive. Yet either he, or someone acting on his behalf, directed Taliban fighters operating from safe havens in Pakistan, bloodying an international coalition of more than 100,000 soldiers enough to cause it to leave Afghanistan to the Afghans.
At this point, the stakes could not be higher for Pakistan, which is translating its influence with the Taliban into the neutralisation of India’s presence in Afghanistan. For this, it has struck a deal with President Ashraf Ghani, a political lightweight who believes that Pakistan’s goodwill is essential for his political survival. In exchange for bringing the Taliban to the dialogue table, Ghani has promised Pakistan’s army chief, General Raheel Sharif, that Indian influence would be minimised in Afghanistan.
Ghani’s outreach to Pakistan is troubling most Afghans, who regard Pakistani meddling and ISI’s support to various militias (the Taliban is just one) as the root cause of security problems in their country. The Afghan public was outraged when President Ghani, on his visit to Pakistan last November, drove straight from the airport to the army’s Rawalpindi headquarters and met with General Raheel Sharif, even before meeting his counterpart, Nawaz Sharif, in Islamabad.
Afghan sentiment was doubly outraged by the signing, in May, of an agreement between Afghanistan’s National Directorate of Security (NDS) and ISI to cooperate in fighting terror.
Even so, most Afghans recognise there can be no peace without the Taliban. And the hope for peace through talks continues. With the death of Mullah Omar causing the Taliban to start splintering, there is less certainty than ever about Pakistan’s grand scheme to gain influence in Kabul.
Tuesday, 4 August 2015
By Ajai Shukla
Business Standard, 4th Aug 15
Incompetence dogs the defence ministry’s plan to harness Indian defence companies to develop a “future infantry combat vehicle” (FICV) --- an armoured battle-taxi for the infantry to keep pace with tanks. The ministry started out well by deciding to buy the FICV in the “Make” category of the defence procurement procedure, under which Indian companies are funded to develop “high technology, complex systems”. In this case, two vendors were to design and develop separate FICVs, with the defence ministry reimbursing 80 per cent of their costs. The better one would be mass-produced to replace the army’s 2,600 BMP-2 vehicles that are now obsolescent.
A fine plan, but the ministry has failed twice in evolving a model for selecting the two “development agencies” (DAs), the vendor consortia who will compete to build the FICV. In 2012, the defence ministry cancelled the Expression of Interest (EoI) it had issued two years earlier to four vendors --- Larsen & Toubro, Tata, Mahindra and the Ordnance Factory Board (OFB). The reason: after the companies submitted their strategies and plans, a defence ministry official observed that the EoI had omitted to specify the methodology for deciding the two winners. Anticipating that the losing vendors might approach the courts, the ministry scuppered the EoI and started afresh.
It took another three years to formulate selection criteria and issue a fresh EoI, but the ministry finally managed it on July 16. As this newspaper reported (July 17, “After 5-year delay, tender issued in Rs 50,000-cr Future Infantry Combat Vehicle project”) EoIs were issued to ten Indian companies --- Mahindra; Bharat Forge; L&T; Punj Lloyd; Tata Power; Tata Motors; Pipavav Defence; Rolta India; Titagarh Wagons, and the OFB. They have been asked to build a tracked vehicle that would carry a crew of three and also eight combat-kitted infantrymen. While the FICV’s weight is not specified, it must be amphibious and so can be no heavier than 18-20 tonnes. It must be air-portable in the air force’s IL-76 and C-17 aircraft. Finally, it must fire anti-tank guided missiles out to ranges beyond 4,000 metres.
While this is not an insurmountable technological challenge, there remain lacunae in the evaluation methodology that the EoI lays out for selecting the two DAs. There is insufficient incentive to indigenise, which should be the primary objective in a “Make” project. And the ministry’s unfailing urge to support the OFB has resulted in skewing the evaluation criteria to favour large companies with enormous installed capacities, rather than lean organisations oriented towards high-tech innovation.
The EoI specifies that vendor responses will be graded in four categories, each having a certain weightage. These four criteria are: commercial assessment (26.08 per cent); technical capability assessment (34.24 per cent); critical technology assessment (31.37 per cent), and technical specification assessment (08.31 per cent). To answer the perfectly legitimate question of how each criterion was allocated such pinpoint weightage, the ministry declares that these were “arrived at by using a complex method called the Analytical Hierarchical Process (AHP) model.”
Beyond the jargon, we learn the best vendor response in each category will be allocated full marks, with the rest scoring lower in proportion to the merit of their bids. A Business Standard analysis, however, finds problems in the grading process.
Take the first parameter, the “commercial assessment”, with a weightage of 26.08 per cent. In this, the defence ministry has asked for four parameters: the company’s/consortium’s annual turnover, profit after tax, net worth and fixed assets. There seems little reason to set so much store by company size, especially since the defence ministry gave this zero weightage in the “Make” category EoI for the Tactical Communications System (TCS); and only 10 per cent weightage in the EoI for the Battlefield Management System (BMS). In the FICV EoI, it might seem as if L&T would score highest in this segment, but the defence ministry has shielded its wayward child, the OFB, by mandating that the ministry would mark the OFB in this segment at its own discretion. Meanwhile, Tata Motors, which should logically be a strong candidate for building an FICV, will score poorly here due to its large loss last year. This might make other companies --- including group company, Tata Power --- reluctant to join a Tata Motors consortium.
The second evaluation criterion is “technical capability assessment” with 34.24 per cent weightage. This evaluates the R&D capability of a company/consortium across its entire spectrum of activity. In the TCS and BMS evaluations, credit was given only for R&D capabilities in areas directly related to the project. Now, broad-based credit would allow Tata Motors and Mahindra to benefit from R&D in their small car projects, even if that has little “carry-over” to building an FICV. Similarly, L&T would benefit from R&D expenditure in L&T Infotech. Meanwhile smaller companies with higher R&D spends in percentage terms might lose out because their absolute R&D spends are lower.
In this same category, the EoI favours vendors with large fixed capacities in brick-and-mortar manufacturing. It asks for minute details of bending and cutting machines installed, while no credit is given for electronics and system integration capabilities. Here again, the OFB stands to benefit as a vertically integrated organisation with large capacities installed at taxpayer’s expense. Says a private sector chief executive: “I may wish to outsource a range of machining activities, while retaining high-tech design and electronics for myself. Why should an EoI discriminate against such a business model? In a project that is going into a development phase, why is the defence ministry looking for production facilities?”
The third evaluation criterion is “critical technology assessment”, with a weightage of 31.37 per cent. It requires companies/consortia to offer as many “core technologies” and “critical technologies” as possible, specifying some 40 technologies, of which almost half relate to engines and transmissions. Vendors need not develop technology. Credit can be obtained simply by signing a Memorandum of Understanding (MoU) with a foreign technology partner, who undertakes to provide the rights and licences for manufacturing a specified product in India. Since a foreign vendor can provide MoUs to multiple Indian companies, theoretically all ten FICV bidders could submit an MoU from the same foreign vendor.
The fourth and last criterion of “technical specification assessment” carries a tiny weightage of 8.31 per cent. This involves proposing specifications for the FICV. With the ministry specifying some capabilities and demanding certain technologies, this assessment largely writes itself.
A betting man could make good money on the outcome of this EoI. It is structured to ensure that the OFB emerges as one DA. The second will most likely be L&T, with its size, installed capacities and engineering capability. The gamble really centres on what consortia these two will assemble. The OFB would probably tie up with Russia’s Kurganmashzavod, which it has earlier partnered in building the BMP-2 in Medak. Its other likely partner would be Bharat Forge, which has a tie-up with Israeli electronics firm, Rafael, which would supply the FICVs missile, night vision and sighting systems and active protection systems. This consortium’s offer will essentially be another Russian vehicle with Israeli electronics.
The other likely DA, L&T, could partner Tata Power (Strategic Engineering Division); a tried and tested consortium that has emerged tops in the first two “Make” projects. This consortium might also suck in BAE Systems, which had earlier tied up with Mahindra, a partnership that came unravelled.
But, first, to make a good choice, the defence ministry needs to get its evaluation criteria in order.
Graphic: Criteria for comparing vendors in TCS, BMS and FICV projects:
Commercial assessment: vendors’ turnover, profit, net worth, fixed assets. OFB to be arbitrarily assessed by MoD
Technical capability assessment: vendors’ R&D record and infrastructure, patents filed, manpower. In TCS and BMS projects, R&D abilities were assessed only in relevant technology areas. In FICV project, marks obtainable for R&D capability in irrelevant areas.
Relevant project experience. In the FICV, Mthey also demand production infrastructure. No space for business models that include outsourcing of production/machining.
Critical technology assessment. Vendor's approach to meeting the technical requirements (No marks for this in FICV because specifications given)
Access to critical technologies (including through MoUs)
Indigenous content, through ownership of IP (provides control over crucial technology)
Technical specification assessment criteria
Source: Defence ministry Expression of Interest (EoI) to vendors