IAF Offers To Spend $12B To Break Monopoly

[SQ8]

Finally, the IAF does exactly what I have been predicting as the best move possible for the Indian aviation industry(and as benefit to the IAF).

 

[Trawllu]

HAl came up with 3500 crore from internal accruals like wat ? Yo its govt sponsored Agency u dumbo . Thats why u r on a false flag

well its a govt co but a seperate co fully owned by govt

which means it has its own balance sheet own managemnt

Board of directors chairman Md etc

now the earn money take loans from banks and make profits

these profits are shared with the GOI thru dividends

internal accuruals means a part of those profits, bank loans etc

it essentially means the GOI did not provide those funds from General budget of the country

Hope i am clear

 

[45'22']

Same news in idrw.org

They are talking about giving advance 150 mk2 orders to private firms while Hal will concentrate on rafale and fgfa as it's production line is full for next 10 years

It says iaf will order a total of 14 Tejas squadrons with 296 tejas ,mk2 being 250

Sounds gud

IAF looking for Private Production line for Tejas MK-2 | idrw.org

 

[Utkarsh]

LOL. No Industrialist will put in the money and trust unprofessional IAF. IAF will learn it the hard way.

IAF continues to live in a fools paradise. They want to fix the whole world except their own flaws.

 

[Brickwall]

Atlast IAF has started learning why indian navy is so successful in designing and producing various types of warship, while it still in importing mode.Hopefully in decade or two we would be in position to develop all types of aircraft inside country.

Good move by IAF

 

[Trawllu]

gguess what if i share my ture thoughts you wont like it

this is just another way of routing of bribes from domestic indegenous products

Earlier the politicos and IAF top brass were taking bribes and kickbacks in imported products
it is open secret they are involved in so many scandals

now with advent or sucess of domestic products first they tried to kill the domestic products but they couldnt do it and for long people have said that indian products dont get orders because

HAL?DRDO/ADA/CVRDE? etc dont offer bribes / cant offer bribes no way to route the bribes and money

so now guess what

DRDO/ADA/NAL/ HAL will develop tech and practices will take pains andiron out all difficulties then it will be transfererd to pvt cos

where the pvt cos will jack up costs - from which they will make profits and they will pass on bribes and kickbacks to IAF top brass and politiocs

 

[Utkarsh]

gguess what if i share my ture thoughts you wont like it

this is just another way of routing of bribes from domestic indegenous products

Earlier the politicos and IAF top brass were taking bribes and kickbacks in imported products
it is open secret they are involved in so many scandals

now with advent or sucess of domestic products first they tried to kill the domestic products but they couldnt do it and for long people have said that indian products dont get orders because

HAL?DRDO/ADA/CVRDE? etc dont offer bribes / cant offer bribes no way to route the bribes and money

so now guess what

DRDO/ADA/NAL/ HAL will develop tech and practices will take pains andiron out all difficulties then it will be transfererd to pvt cos

where the pvt cos will jack up costs - from which they will make profits and they will pass on bribes and kickbacks to IAF top brass and politiocs

The LCA that HAL produces cost 26 million $.

But a Helicopter S-70 made by Tata and Sikorsky costs 62 million $ and no body is surprised or asking any questions

 

[SledgeHammer]

The Indian government, acting on Air Force demands, has offered to spend $12 billion to encourage private firms to establish an aircraft manufacturing facility -- a move that would break Hindustan Aeronautics Limited's monopoly on aircraft manufacturing after years of delays on several projects.

Specifically, the Indian government has offered an advance order for the homemade light combat aircraft (LCA) Mark-2, a Defence Ministry source said.

The offer was conveyed to senior private sector executives during several meetings with MoD officials in the last month, the source said. India's private defense majors, Tata Group, Mahindra & Mahindra and Larsen and Toubro, are the most capable of setting up an additional military aircraft plant, either independently or in partnership with overseas firms.

None of the executives who participated in the meeting would comment on whether they would consider building such a facility.

Madhukar Vinayak Kotwal, president, Heavy Engineering of Larsen & Toubro, said, "Since this [building of an additional facility] is a matter currently under discussion at various levels in the government as well as in industry associations, we would like to refrain from giving any comments at this stage."

The LCA, developed by Bangalore-based Aeronautical Development Agency (ADA), a laboratory of the Defence Research and Development Organisation (DRDO), is nearly 20 years behind schedule. The first order for 40 of the Mark-1 version of the aircraft has been given to state-owned Hindustan Aeronautics Ltd. (HAL). The final operational clearance is expected to be granted in 2015, after which the aircraft can go into production.

The Indian Air Force has a future requirement for only the next-generation LCA Mark-2, which would be powered by the higher thrust General Electric GE-414 engine. But the aircraft is still in the development stage and is not expected to be ready for production before 2017-18. The Air Force has a requirement for 250 LCA Mark-2s, which the government estimates would be covered by the $12 billion advance order.

The Air Force has demanded establishment of an additional aircraft facility to break the monopoly of HAL, India's sole military aircraft manufacturer, and has complained of delays in delivery of aircraft.

HAL, with annual sales of $2.3 billion for the year that ended March 31, has produced more than 50 types of aircraft and helicopters, and has been designated as the production agency for the $12 billion Medium Multi-Role Combat Aircraft program, in which Dassault's Rafale has been short-listed as the favored aircraft.

"It is absolutely essential to set up an additional military aircraft facility here, as HAL is overloaded for the next 10 years and has become too unwieldy," defense acquisition expert Miral Suman said.

Vivek Rae, former director general (acquisition) in the MoD, said, "India sorely needs aircraft manufacturing capability in the private sector. We cannot afford to put all eggs in the HAL basket."

Subhash Bhojwani, retired Air Force air marshal, agreed an additional manufacturing facility is needed, but said HAL should be made more commercial.

"HAL is into the design and contemporary manufacture of fighters, transports, trainers and helicopters, as well as avionics and engines," he said. "It is possibly the only company in the world to be so diversified. However, while this may sound good in a book of world records, it isn't good as a commercial model."

Defense analyst Amit Cowshish, a retired Defence Ministry bureaucrat, said the objective should be "not to create an entity that could compete with HAL but to have additional capability in India to manufacture aircraft so that the requirement, both of the military and civil sectors, could be met in a more cost-effective manner and in shorter time frames. Of course, competition would help in improving HAL's efficiency."

Sujith Haridas, deputy director general of India's industry lobbying agency, the Confederation of Indian Industry, said, "It is very much desired to have an additional manufacturing facility, but one should not ignore that it takes several decades of consistent investment and efforts to create a mammoth system integrator like HAL."

Would It Build Fighters?
Analysts disagree about whether the new facility should be used to build fighter aircraft

India's private sector is able to set up such a facility, and could acquire the capability to build the LCA Mark-2 over time, but it could be a challenge, Cowshish said.

"LCA is a program in the pipeline for more than three decades. HAL and DRDO have worked hard on it, and the final operational clearance is expected sometime later this year," he said. "To bring in a new manufacturing agency at this stage may not be a very good idea. Though it is possible to pass on the technology to the private industry for manufacturing the aircraft, selecting such an agency may turn out to be a [technically] tricky affair."

Defense analyst Rahul Bhonsle said, "Setting up a new military aircraft facility is no doubt a Herculean task. But the new facility will be looking primarily at system integration."

But Muthumanikam Matheswaran, retired air marshal and adviser (for strategy) to the chairman of HAL, said no private-sector aircraft facility could build the LCA.

"There appears to be a misconception that if ADA wishes, the LCA can be produced by the private sector. Nothing can be further from truth. The LCA cannot be produced by anybody without the major involvement of HAL."

Defense News Mobile - India Offers To Spend $12B To Break Monopoly



I don't know how reliable this new is - seems like a little too good to be true really.


@sancho @Dillinger @Gessler @sandy_3126

Designing an entire aircraft from scratch would be very difficult & risky business proposition for pvt. sector, either they will design & make critical components for HAL/ADA and HAL/ADA will assemble the final product, or they will produce different variants of aircraft under licence from HAL/ADA. They can also develop aircrafts in collaboration with foreign partners, as in the case of howitzers, but that seems difficult at this moment, especially for frontline fighter jets.

 

[thesolar65]

I have already commented, but hey, It just came to my mind. Is it 12billion Dollar or Rupees? I know it is written in the post, but may be incorrect or type error.

 

[jha]

Good Move... Now they should push ADA/HAL to look for suitable systems for MK-2 outside instead of trying to develop everything on their own.

 

[Abingdonboy]

this will instead of giving competition to HAL will be morale breaker for them

This kind of defeatist mindset is what has held the Indian military to ransom for too long. IF it is a morale breaker for an over burdened and failing company like HAL then so be it- let them crumble. HAL is unique for all the wrong reasons in the world and it is not fit for purpose as is.

the 1st thing is the Govt issued RFI for replacement for Dorniers - 56 AC someting about more than 5000 crores deal exclusively for pvt cos

Nobody came forward

This project is for the replacement of the Avros NOT Dorniers. And the real reason that pvt players have been reluctant to come foreword for this one project is that the order for 40 unit (the first 16 will be produced abroad) is far too small to justify the setting up of an entire production line not because the Indian pvt sector aren't interested or capable of undertaking this work.

Under the new GoI things will be moving on this front don't you worry.

 

[indiatester]

gguess what if i share my ture thoughts you wont like it

this is just another way of routing of bribes from domestic indegenous products

Earlier the politicos and IAF top brass were taking bribes and kickbacks in imported products
it is open secret they are involved in so many scandals

now with advent or sucess of domestic products first they tried to kill the domestic products but they couldnt do it and for long people have said that indian products dont get orders because

HAL?DRDO/ADA/CVRDE? etc dont offer bribes / cant offer bribes no way to route the bribes and money

so now guess what

DRDO/ADA/NAL/ HAL will develop tech and practices will take pains andiron out all difficulties then it will be transfererd to pvt cos

where the pvt cos will jack up costs - from which they will make profits and they will pass on bribes and kickbacks to IAF top brass and politiocs

Lets look at it the other way. The customers for HAL(& others) are the Indian armed forces. It is in their interests to keep them happy with high quality of their products and service. Unfortunately HAL has earned the ire of the armed forces because of their slow pace of work. The quality has never been their forte either.
The reasons for the delay can be numerous, but you cannot blame your customer for that.
If the products are of really high caliber, then they will have customers either the domestic or foreign. Considering that they have not made much of a mark internationally and that they have a disgruntled domestic customer must push them to introspect and improve.

 

[Trawllu]

This kind of defeatist mindset is what has held the Indian military to ransom for too long. IF it is a morale breaker for an over burdened and failing company like HAL then so be it- let them crumble. HAL is unique for all the wrong reasons in the world and it is not fit for purpose as is.


This project is for the replacement of the Avros NOT Dorniers. And the real reason that pvt players have been reluctant to come foreword for this one project is that the order for 40 unit (the first 16 will be produced abroad) is far too small to justify the setting up of an entire production line not because the Indian pvt sector aren't interested or capable of undertaking this work.

Under the new GoI things will be moving on this front don't you worry.

see HAL is not a failing co neither a burdened one

the delays of desing are attributed to ADA not HAL

40 units not viable - good then why IAF / GOI gave 40 units MK1 orders to HAL - they have setup a line for it ?
if they have invested for a 40 unit line (without profitability considerations ) furthur orders shuld flow to them ?

what about thier investments (after all those are made from tax money)?
why to let that investment go down the drain ?

Lets look at it the other way. The customers for HAL(& others) are the Indian armed forces. It is in their interests to keep them happy with high quality of their products and service. Unfortunately HAL has earned the ire of the armed forces because of their slow pace of work. The quality has never been their forte either.
The reasons for the delay can be numerous, but you cannot blame your customer for that.
If the products are of really high caliber, then they will have customers either the domestic or foreign. Considering that they have not made much of a mark internationally and that they have a disgruntled domestic customer must push them to introspect and improve.

are they even allowed to exports - without alllowing them to export how come thae can make a mark internationally

they have exported ALH Dhruv and are getting more international orders for it

if you allow them to export they will 1st allow them to export

 

[Bang Galore]

Well everyone has to start somewhere but I have no doubt that giants such as TATA, L&T and Mahindra have the means to excel if the conditions are right.

TATA production line for the S-92 cabin:.

What I would seriously want them to produce is this

Sikorsky S-97 Raider

see HAL is not a failing co neither a burdened one

the delays of desing are attributed to ADA not HAL

40 units not viable - good then why IAF / GOI gave 40 units MK1 orders to HAL - they have setup a line for it ?
if they have invested for a 40 unit line (without profitability considerations ) furthur orders shuld flow to them ?

what about thier investments (after all those are made from tax money)?
why to let that investment go down the drain ?

You are right about the investment part but there is a certain amount of complacency with no competition. I would like to see private firms compete with HAL, after they too will invest in India.

 

[indiatester]

are they even allowed to exports - without alllowing them to export how come thae can make a mark internationally
they have exported ALH Dhruv and are getting more international orders for it
if you allow them to export they will 1st allow them to export

Total Sales M Cr. 14,323.63
Export Sales M Cr. 382.82

Lets be honest. HAL has not been able to scale up. They find it hard to keep their commitments with the Indian armed forces themselves. If products and processes have been perfected, then scaling would not be an issue at all. The fact that HAL is not able to do so points to this deficiency.

Hence coming back to the point that these are better handled by private players who will perish if they don't perform.