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SOURCE: MONEY CONTROL
Heavy industries minister Praful Patel is on an offensive against the ministry of defence’s move to rope in private players to lead the supply of transport aircraft to the Indian armed forces, report CNBC-TV18′s Rituparna Bhuyan and Elan Dutta. Sources say, Patel is batting for Hindustan Aeronautics Limited or HAL to be given primacy for the contract but singed by enormous delays, the armed forces are pushing to end HAL’s monopoly. In the first of this special series, we find out if the armed forces apprehensions hold water. One of India’s navratna companies, Bangalore based HAL has had a virtual monopoly in India’s air defence contract market.
While HAL has helped boost India’s indigenous capabilities, its delivery record has been marred by significant time and cost over runs prompting the armed forces to push for the entry of private players as the lead contractors, a move that is now being questioned by the nodal ministry and HAL. However an analysis of HAL’s past throws up an uncomfortable truth. In 2008, HAL secured its first export order through a competitive bidding for supply of seven advance light helicopters, or Dhruv, to the Ecuadorian air force. Three years later, the Latin American nation slapped a penalty of Rs 6.16 crore on the navratna company as it overshot the delivery deadline.
Even for an existing platform like the Dhruv, Hindustan Aeronautics could not crank up its production lines to ensure timely delivery. In fact, some of HAL’s projects have seen delays as long as 10 years. For instance the much promised intermediate jet trainer, Christened Sitara, a project that was conceived in 1999 and supposed to be completed by 2004. More than a decade later, the intermediate jet trainer is still a pipe dream, even though the ministry of defence released Rs 3000 crore for the project. HAL was also given responsibility of developing 106 basic trainers by the air force in 2010.
As on date, HAL has not even been able to finalise the design while the engine for the trainer is yet to be selected. Meanwhile HAL has revised the DPR thrice, prompting Indian Air Force chief NAK Browne to shoot a missive to Antony in July this year. Another project that has seen in-ordinate delay is the light utility helicopter that was supposed to replace the ageing fleet of Chetak’s and Cheetahs. Even after a decade’s delay, HAL has failed to deliver the promised Shakti series of engines for the advanced light helicopter Dhruv. This raises the question that Praful Patel’s opposition to private players is coming at the cost of India’s national security. It is time for the government to pay heed to RBI governor Raghuram Rajan’s advice of not molly coddling Indian companies at the cost of the country and consumer.
Heavy industries minister Praful Patel is on an offensive against the ministry of defence’s move to rope in private players to lead the supply of transport aircraft to the Indian armed forces, report CNBC-TV18′s Rituparna Bhuyan and Elan Dutta. Sources say, Patel is batting for Hindustan Aeronautics Limited or HAL to be given primacy for the contract but singed by enormous delays, the armed forces are pushing to end HAL’s monopoly. In the first of this special series, we find out if the armed forces apprehensions hold water. One of India’s navratna companies, Bangalore based HAL has had a virtual monopoly in India’s air defence contract market.
While HAL has helped boost India’s indigenous capabilities, its delivery record has been marred by significant time and cost over runs prompting the armed forces to push for the entry of private players as the lead contractors, a move that is now being questioned by the nodal ministry and HAL. However an analysis of HAL’s past throws up an uncomfortable truth. In 2008, HAL secured its first export order through a competitive bidding for supply of seven advance light helicopters, or Dhruv, to the Ecuadorian air force. Three years later, the Latin American nation slapped a penalty of Rs 6.16 crore on the navratna company as it overshot the delivery deadline.
Even for an existing platform like the Dhruv, Hindustan Aeronautics could not crank up its production lines to ensure timely delivery. In fact, some of HAL’s projects have seen delays as long as 10 years. For instance the much promised intermediate jet trainer, Christened Sitara, a project that was conceived in 1999 and supposed to be completed by 2004. More than a decade later, the intermediate jet trainer is still a pipe dream, even though the ministry of defence released Rs 3000 crore for the project. HAL was also given responsibility of developing 106 basic trainers by the air force in 2010.
As on date, HAL has not even been able to finalise the design while the engine for the trainer is yet to be selected. Meanwhile HAL has revised the DPR thrice, prompting Indian Air Force chief NAK Browne to shoot a missive to Antony in July this year. Another project that has seen in-ordinate delay is the light utility helicopter that was supposed to replace the ageing fleet of Chetak’s and Cheetahs. Even after a decade’s delay, HAL has failed to deliver the promised Shakti series of engines for the advanced light helicopter Dhruv. This raises the question that Praful Patel’s opposition to private players is coming at the cost of India’s national security. It is time for the government to pay heed to RBI governor Raghuram Rajan’s advice of not molly coddling Indian companies at the cost of the country and consumer.
