Part 2 : The Merry Go Round Circus of IAF Acquisitions
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So a new DM NS finally was appointed. But whats the status change really? In a candid discussion with few of the folks from IAF and MOD brass, the understanding we could gather is as below.
Continuing on the last article, the whole defence acquisition itself is in doldrums again. Part of it is to be blamed on our morbid acquisition process, part on the lack of spine by our authorities. What is everybody doing is to play safe and not get a blot of stain called corruption in their clothes and yet doing so, we magnificently screw up the whole modernisation drive.
We will touch base on few topics
1. The SE figther Saga
No sooner had we heard that its finally a F16 Block 70 vs Gripen E/F out in open for IAF Single Engine (SE) tender for approx 90 birds or 4.5 squadrons to begin with which can go to a max of 7.5 sqds or 150 Birds , the challenges seems many to this whole process.
The latest meeting of DM NS and all stakeholders has showed the following brief data points (taken from other open sources to point here)
The SP Model process
The SP Model progress as of now
What Aatre Task Force suggested was this
What SP Policy (out in May 2017) stated clearly is that SP is basically an
integrator and
targets to create an ecosystem with all concerned parties.
The declared parts as of now includes just the fighters/helos, submarines, AFVs/MBTs
The selection process is defined as
Both to be done in parallel to speed it up
What also must be noted is
"OEM must submit a 10 year PBL and Maintenance based costing" as well in the commercial offer. along with
"technology being transferred to various stake holders"
So Whats the issue now?
Well, the issues are many.. Lets summarise it in short here
LOGIC
In the words of Ernst & Young research,
- In the path to progress with great emphasis laid on “Make in India,” it is highly likely that the cost of design, development, supply chain management and production may be higher than a foreign made product.
- However, since the development, ecosystem and production will take place within the geography of the country, the taxpayers’ money so billed against the Indian manufactured system under consideration is circulated within the same geography many times.
- The knock-on effects of indigenization are far higher and outweigh the initial higher cost. Thus, the cost to the country would be far less than the L-1 cost, if seen in this perspective.
- Corporates need to gear up now. Delivering the desired strategic system within the timeframe and conforming to the highest quality standards while dealing with restricted availability of military grade raw materials will challenge their supply chain.
- Corporates must map the existing industry in terms of their preparedness, quality and capacity.
- Many corporates have made investments in multidisciplinary sub-sectors of defence. It is time now to build on the supply chain for the segments and develop an aerospace and defence manufacturing ecosystem.
- Although it might take around 3—4 years before we see actual action on the ground concerning the policy, every positive development toward the end result is welcome.
- Having a policy is just the beginning.
REALITY
In the meeting of new DM NS with all stakeholders, the updated presentation on SE acquisition covered the following points
- The whole Process will take 3 (three) years in effect. (subject to certain conditions)
- The break down is as under
- Year 1 - Submission of Applications and Documentation of all Commercial offers + support dox
- Year 2 - Scrutiny of all applications and all requisite evaluations including trials and TOT points to be firmly put in paper, evaluated and considered as needed or not as requested by teh forces in their requirements.
- Year 3 - Picking the potential L1 applicant and initiating the finale closure of IGA and Contract
- Now there are 2 school of thoughts here
- The old school want this process to be followed as laid down for the most transparent procurement with proper timelines
- The new school wants taking back this RFI and issuing a new one with emphasis on G2G process and shortening the whole timeline to just 1 year (overall)
- The chief challenge to the present government is by the second half to end of next year 2018, code of conduct for elections will be in place and thus it wishes to close the deal before that timeline implying the new school is given more preference.
- The issue in the hand also is about cancellation of multi billion dollar tenders of acquisitions and mdoernisations which has left a significant gap in our planning and preparedness.
Is the head ache enough?
Gripen
- Contender Gripen E/F has sweetened the deal with almost 53% tech transfer agreement (47% with USA entities unclear as of date and likely to be outside the scope)
- Gripen has also stated Gripen M under MII with Indian not being its launch customer rather IN being its 2nd customer.
F16 Block 70
- F16 Block 70 comes with full localisation and transfer of F13X engine and upgrade to India under TASL.
- Also plan is for just first 90 and option is given to India to upgrade the line and next produce F35 but under limited technology transfer using Israeli modifications.
- The F16 MRO and part facility will continue supporting global needs as well under export and MLUs
- Government favours the G2G deal for this particular case with line being setup for 36 F16 per year to begin with and later changing to 16 F35s and 16 F16s (exports, MLUs and if needed more Indian orders)
LCA MK2 based on SE fighter Choice
- LCA Mk2 will share interiors, upgrades and almost many subs systems with the SE winner.
- There are two possibilities - One which is now under consideration for TASL to make LCA Mk2 completely and make HAL consider only Mk1A and other Russian fighter projects (if TASL wins)
- But accessing tech and engine from other project (DRAL based components and Safran for engines including upgraded ones) is still an issue under consideration and a proper evaluation will be done.
- Second to DRAL for LCA Mk2 if Dassault takes the quality and performance guarantee which enhances the product portfolio of Dassault globally with the retirement of Mirage production line and also enables to make a deeper systemic impact to Indian MIC.
- This is a keen new outcome to watch out for especially since LCA ecosystem will get a tremendous boost via this method.
2. The TE Fighter Saga
- With a clarity that IAF wants Rafale in requisite numbers from Merignac and from DRAL, the scope of conflict has increased a lot more within MOD.
- In one side is the continuous emphasis of SE being "Cheaper" then TE and other is the need for TE fighters in Medium role for extended emerging environment.
- The failures of cost and performance of SE vs TE expected and reality scenarios have hit MOD hard.
- With the advent of F35 coming to India in TASL, the TE fighters itself now faces a bigger challenge to justify why they are needed if a 5th Gen Western SE fighter is available for India.
- Of course this kind of puts indigenous program in TE category to a delay mode for subsequent quiet burial or a TD program.
- Also IAF and IN must club their requirements for the TE need and their joint selection will form the basis of the second MII.
- The selection to be used will be basically the OEM which helps finish Kaveri Engine and use it in MLU planes. This puts Safran and Rafale in pole position versus F/A-18 SH block 3.
- But problems are plenty with emphasis on associated cost for IAC1 modification and subsequent overall costs that will be included under customizations head.
- Still a independent nation like France supporting India at all times, goes a long way, especially if they are able to make Safranised Kaveri power the LCA Mk1A.
- The thought process includes not depending on only one nation but to widen the whole program and use maximum localisations.
- There are already discussions on Rafale M not suitable for LPD/LHD operations which the policy makers estimate 3+1 to be in place in coming decade or 2, right in time for a F35 variant to use that platform as well.
- The other challenge being the emerging AD environment which needs a more sophisticated technical evaluation of the planes.
- The other challenge being super high maintenance cost of a 5th gen, which IN wants to avoid at all costs and wishes a 4.75 Gen fighter and has made an internal choice of Rafale -M as per their submissions.
- Obviously IAF fresh 36 requirements talks about a base and needs of specific "things" for their AD/SAM needs, implying the number of Rafale base will rise to 3 (if approved), sufficient to house minimum of 108 Jets easily.
- With advent of new threat perception and limited access to F35 tech, a hard bargaining will be initiated with French Dassault and DRAL for a hi intensive tech transfer to DRAL for Wings, RAM coatings, Engines, embedded Skin Antenna, recon pods, Aerodynamic 3D systems designing and active cancellation+ many other areas.
- Most of these will be used for LCA Mk2 as well and hence the offer to make the same in DRAL plant and use DRAL as integrator for LCA Mk2 will be explored.
- The key challenge for Eric Trappier is the limited Time Dassault has .. Same next year end 2018 before code of conduct comes online.
- Bcz DRAL factory comes online by 2022, the order must be secured to ensure a 3 year lead time before DRAL made Rafales assembled for first lot from Merignac plant CKD/SKD Units can come together with Indian made components.
3. Russia - The 5th Gen heavy Fighter and MKI Upgrade
- Well Russia has its hands full. On one side is the MKI upgrade plan (7+ years since first pointed and till now now finalised) and IAF wanting the matured PAKFA product for FGFA..
- As such FGFA is officially delayed and pushed for later part of 202X (closer to 2030).
- Also its main purpose is to replace first the Mig29s and requirements are pegged at just 3 squadrons to max 5 squadrons.
- The other includes the Mig35 being offered aggressively, even considered from financial perspective and helps bring down other for margins of negotiations.
- Yet IAF is not even considering Mig 35 inspite of high promises from Russian side
- Good news is second SSN under lease will join in next 2-3 years and S400 (450 MKI) will be finalised as well within similar time frame (before code of conduct). So plenty of more deals as well with Russia which needs to be finalised.
- But the prime Super upgrade and FGFA needs a final push.. again 2018 end is the key deadline.
Final Words
Nothing changed much.. The circus continues,, We are yet not clear what we will do but what is clear in the minds of policy makers is there must be 2 private sector behemoths to manufacture western and Indian homegrown fighter project. and 1 public sector HAL which will continue MKI, LCA Mk1A and in future FGFA (when signed).
With the need of a 6X squadron fighter fleet with transport and UAVS above this and a separate dedicated IN 10 sqds, the requirements are huge.. But with fractured way of decision making, and limited time of action left, will the present government able to take the final call before the election code of conduct kicks in?
What will happen to LCA Mk2 which hinges on the SE fighter and borrows from TE fighter program as well?
The closeness to USA, the issues with Russia, the time taken for a French Wine to ripe and Indian jet home program going a bit slow.. Plenty of headaches for our new DM NS .. right away in hot seat. Coupled with neighbourhood issues, modernization needs of plenty more stuff and same countries connecting other critical systems with bigger deals of IAF...
Next one year should see the Merry Go round of IAF acquisitions either ending or spiraling to a much bigger one. Lets hope sanity prevails with all...
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Will update when i hear and see some progress
Thanks for reading.. please feel free to comment and vote as well.