LCA Tejas Mk1 & Mk1A - News and discussions

[STEPHEN COHEN]

Same Manufacturer offers MKI's for 54 million USD? how do we reconcile that?

Different accounting standards ,I guess

All the initial investment for MKI must have been grants by the GOI , not reflecting on HAL's balance sheet

At that time ,ie when MKI licence production began , HAL was Not a listed company

 

[Milspec]

Different accounting standards ,I guess

All the initial investment for MKI must have been grants by the GOI , not reflecting on HAL's balance sheet

At that time ,ie when MKI licence production began , HAL was Not a listed company

Why would the same company have different accounting standards? Remember HAL is a listed company. Accounting fraud will land many people in jail.

 

[STEPHEN COHEN]

Why would the same company have different accounting standards? Remember HAL is a listed company. Accounting fraud will land many people in jail.

Accounting standards change with Time , Today we have to adopt all global best practices in accounting and auditing

That is why OFB corporatisation will Not happen Soon

Since HAL' Shares are held by all types of Investors , even FIIs , they are subject to close scrutiny

Though HAL has a Captive market and captive customers , it has to make profits otherwise , the GOI' s disinvestment programme gets tossed aside

HAL.also.has to.raise loans from Commercial Banks and repay interest on them

In simple words HAL needs to remain in good health , so IAF ie GOI has to pay up

Only when we have a private sector company of the size of HAL , this monopoly can be broken with competition

 

[Milspec]

Accounting standards change with Time , Today we have to adopt all global best practices in accounting and auditing

That is why OFB corporatisation will Not happen Soon

Since HAL' Shares are held by all types of Investors , even FIIs , they are subject to close scrutiny

Though HAL has a Captive market and captive customers , it has to make profits otherwise , the GOI' s disinvestment programme gets tossed aside

HAL.also.has to.raise loans from Commercial Banks and repay interest on them

In simple words HAL needs to remain in good health , so IAF ie GOI has to pay up

Only when we have a private sector company of the size of HAL , this monopoly can be broken with competition

What has all this to do with LCA's price.
Hal Offers MKI at 54 mils, while seems to offer LCA at 72ish. seems a little steep but that's just me.

 

[STEPHEN COHEN]

What has all this to do with LCA's price.
Hal Offers MKI at 54 mils, while seems to offer LCA at 72ish. seems a little steep but that's just me.

Amortisation of Costs

The Sunk Costs of MKI are not high
Because all that money invested was a Grant by GOI , So not much depreciation expenses

Where as for LCA there is new infrastructure being created

This money is being loaned by Banks or some investment by GOI
Which is the largest shareholder

Every product is a different "Account " for the company

Even MKI upgrades will be accouted separately

 

[randomradio]

Well, in the same breath when you say IAF planned for MKI, in 2000 but planned for too many of them.

Planned for Rafale's in 2010 but ended up acquiring piecemeal of them a decade later,

Then planned for FGFA in the 2020's ( While itself pulled out completely from it's own plan - it's 2021 now)

When did it plan for the LCA? or the LCA mk2, which was supposed to be the bullwark to replace it's primary mig21 fleet?

The contradictions in the praise you lay for IAF is quite baffling to me?

An airforce that plans for Paper planes as it's a strategic footprint might have some serious work to do.

Lets take the MKI, as an example. As you mention IAF planned for the MKI, did it plan to induct MKI till 2021, two decades of induction process. So it would continue to build it's 4th gen aircraft untill it's 5 gen FGFA arrives at 2020 per your assertion?

For Rafale, what exactly did IAF plan in 2010? evaluation? this is 2021 and we have two squadrons in hand.

For PAKFA, did it do any preliminary design analysis, what if project failed, what would be it's fall back strategy.

If this is the strategic outlay of IAF, they should really look up a simple PFMEA, a lot of these planners will get fired.

Comparison with USAF, where for every major platform it undertook it had multiple designs for comparative analysis is straight out of system integrators hand book. For LWF it had options in form of f16 and F17, for it's FX program it had 4 preliminary design proposals, for it's ATF it had YF22 and YF23 programs, and for it's JAST program it had X32 and x35 platforms.

While IAF : Had one design for LCA, one design from AMCA... what happens if LCA as a design package doesn't work what if the it's propulsion system doesn't cut it, what happens if it's Multimode radar doesn't work wouldn't that cause a set back to the best laid 50 yr plan?

What happens if Dassault hikes it's a price to levels it cannot afford it anymore; what does it fall back to?

What if AMCA faces design, manufacturing, technological development issues or FGFA fails it's test requirements, What happens to it's 5th gen program. What redundancy does the IAF have?

The IAF do the planning. The execution is done by MoD and DRDO. We didn't fail in the planning, it's the execution part that failed. The IAF still wants what they planned more than a decade ago and they haven't changed anything much as of yet. It still remains 200+ MKI, 200+ Rafale and 150 AMCA.

The MKI's production wasn't planned until 2021, it was supposed to end in 2017. And in 2006, the schedule was moved up to 2014 by increasing the production numbers. HAL failed to deliver the numbers necessary. It was a 14-year production run for 140 jets. You know there's a pretty big problem when the line delivers 16 jets a year, but takes 19 years to deliver 140 jets. Is it surprising that the forces question HAL's ability to deliver the LCA in time considering their track record? Even Jaguar, M2000 and Mig-29 upgrades have been delayed. MKI overhaul was also delayed. Furthermore, the MKI was supposed to be upgraded starting in 2010, alongside its first overhaul, but the govt didn't have the money for it, it was all needed for the Rafale contract. It was supposed to have gone the Su-35 way since back then.

LCA went through a number of iterations before they zeroed in on the current designs. In the 80s, the US defence budget was greater than India's GDP, so they obviously had more options. Now that we have such new options, we are also exercising them, for example, getting competitors for HAL and creating competition within the industry even for R&D through the SPM program.

If the LCA and AMCA designs don't work, then they wouldn't get to the FSED phase in the first place. But since the IAF has planned for 4-6 generations of jets in just 3-5 decades, an alternative is always ready, albeit with a delay. Not so with air forces like the US or France who are stuck with 1 or 2 designs and have no choice but to make them work. The F-35 is the best example. If they screw up, they don't have an alternative. This is what's so amazing about the IAF's ability at thinking ahead, there are plenty of alternatives coming up and there's not a single air force with so many choices and with decisions already taken. Their planning has properly covered all bases. Since we can assume FGFA has failed, the alternative still remains Rafales and a quicker induction schedule for AMCA by splitting it into Mk1 and Mk2, and even then there's still some window for the Su-57 to squeeze through. So only the numbers and types have changed. If the US screws up the F-35, they are screwed for the next 2 decades. Similarly, if they screw up NGAD, they got nothing to fall back on, they can only buy more of the old stuff, basically modernised F-35s.

For each individual program at the high end, there is no real fall back strategy. As the IAF has already pointed out a long time ago, there is no plan B for the Rafale. All you can do is get some more of what you already have, which is what the IAF unfortunately did by pushing the MKI numbers up by 80+ more jets when the Rafale and LCA got delayed, or get an alternative at a later date. The IAF never planned to operate this many MKIs, IAF officers, including two air chiefs, have already pointed that out publicly. If AMCA fails, then the IAF will have to chase after whatever's available in the global market, which could either be the Su-57 Mk3 or the F-35 Mk2. So there is a strategy in place for imports, which is the point of the DPP.

Most of the IAF's plans are stuck due to budgetry issues, not technical or bureaucratic issues. The MKI upgrade was cancelled due to not having the money for it. The Rafale contract was not restarted due to money crunch. FGFA didn't go through because of our poor finances. And now, AMCA is yet to start since it's still awaiting funding. Only LCA was stuck due to the incompetence of our industry, this program never lacked resources.

You see, nothing here is the IAF's fault. HAL screwed up MKI production. MoD screwed up MKI overhaul and upgrade contract. ADA screwed up LCA's development. HAL and MoD screwed up MMRCA. MoD and DRDO (along with the Russians themselves) killed FGFA. And now, MoD has delayed AMCA. These are the facts, with reasons covering financial, technical, bureacratic arenas and with a healthy dose of incompetence. But let's blame the IAF 'cause it's easy, when not a single decision is made by them for any of the above. They only do the planning and create QRs (and pretty modest ones at that), and unfortunately fight with what they have.

 

[randomradio]

45696 cr for 83 a/c's,
So 76.465 Million per a/c... (at 72rs per usd)
Is it just me or is that a tad bit expensive for LCA?

That's not the unit price alone. It includes PBL, maintenance, infrastructure, development costs etc. Even the cost of the production facility is included in it.

So about $40-45M as unit price and the remaining $30M+ covers everything else. It's not clear if weapons are a part of the package, although I doubt it.

 

[randomradio]

Same Manufacturer offers MKI's for 54 million USD? how do we reconcile that?

A more advanced version of the jet now costs less than $25M in Russia because of the exchange rate doubling for the ruble.

 

[STEPHEN COHEN]

The IAF do the planning. The execution is done by MoD and DRDO. We didn't fail in the planning, it's the execution part that failed. The IAF still wants what they planned more than a decade ago and they haven't changed anything much as of yet. It still remains 200+ MKI, 200+ Rafale and 150 AMCA.

The MKI's production wasn't planned until 2021, it was supposed to end in 2017. And in 2006, the schedule was moved up to 2014 by increasing the production numbers. HAL failed to deliver the numbers necessary. It was a 14-year production run for 140 jets. You know there's a pretty big problem when the line delivers 16 jets a year, but takes 19 years to deliver 140 jets. Is it surprising that the forces question HAL's ability to deliver the LCA in time considering their track record? Even Jaguar, M2000 and Mig-29 upgrades have been delayed. MKI overhaul was also delayed. Furthermore, the MKI was supposed to be upgraded starting in 2010, alongside its first overhaul, but the govt didn't have the money for it, it was all needed for the Rafale contract. It was supposed to have gone the Su-35 way since back then.

LCA went through a number of iterations before they zeroed in on the current designs. In the 80s, the US defence budget was greater than India's GDP, so they obviously had more options. Now that we have such new options, we are also exercising them, for example, getting competitors for HAL and creating competition within the industry even for R&D through the SPM program.

If the LCA and AMCA designs don't work, then they wouldn't get to the FSED phase in the first place. But since the IAF has planned for 4-6 generations of jets in just 3-5 decades, an alternative is always ready, albeit with a delay. Not so with air forces like the US or France who are stuck with 1 or 2 designs and have no choice but to make them work. The F-35 is the best example. If they screw up, they don't have an alternative. This is what's so amazing about the IAF's ability at thinking ahead, there are plenty of alternatives coming up and there's not a single air force with so many choices and with decisions already taken. Their planning has properly covered all bases. Since we can assume FGFA has failed, the alternative still remains Rafales and a quicker induction schedule for AMCA by splitting it into Mk1 and Mk2, and even then there's still some window for the Su-57 to squeeze through. So only the numbers and types have changed. If the US screws up the F-35, they are screwed for the next 2 decades. Similarly, if they screw up NGAD, they got nothing to fall back on, they can only buy more of the old stuff, basically modernised F-35s.

For each individual program at the high end, there is no real fall back strategy. As the IAF has already pointed out a long time ago, there is no plan B for the Rafale. All you can do is get some more of what you already have, which is what the IAF unfortunately did by pushing the MKI numbers up by 80+ more jets when the Rafale and LCA got delayed, or get an alternative at a later date. The IAF never planned to operate this many MKIs, IAF officers, including two air chiefs, have already pointed that out publicly. If AMCA fails, then the IAF will have to chase after whatever's available in the global market, which could either be the Su-57 Mk3 or the F-35 Mk2. So there is a strategy in place for imports, which is the point of the DPP.

Most of the IAF's plans are stuck due to budgetry issues, not technical or bureaucratic issues. The MKI upgrade was cancelled due to not having the money for it. The Rafale contract was not restarted due to money crunch. FGFA didn't go through because of our poor finances. And now, AMCA is yet to start since it's still awaiting funding. Only LCA was stuck due to the incompetence of our industry, this program never lacked resources.

You see, nothing here is the IAF's fault. HAL screwed up MKI production. MoD screwed up MKI overhaul and upgrade contract. ADA screwed up LCA's development. HAL and MoD screwed up MMRCA. MoD and DRDO (along with the Russians themselves) killed FGFA. And now, MoD has delayed AMCA. These are the facts, with reasons covering financial, technical, bureacratic arenas and with a healthy dose of incompetence. But let's blame the IAF 'cause it's easy, when not a single decision is made by them for any of the above. They only do the planning and create QRs (and pretty modest ones at that), and unfortunately fight with what they have.

All our procurement and upgradation
Programmes have now speeded up
Thanks to UNCLE XI Jinping


In Hindi we say.
Ek Jhatke me Seedhe ho gaye

That is we have come to our senses in just one " Blow "

 

[TARGET]

That's not the unit price alone. It includes PBL, maintenance, infrastructure, development costs etc. Even the cost of the production facility is included in it.

So about $40-45M as unit price and the remaining $30M+ covers everything else. It's not clear if weapons are a part of the package, although I doubt it.

we have to see other benefits with this deal. this will definitely help us to create an independent private aeronautical industry which will contribute to our future fighter jet programs... also the HAL rotary division will get minimum support funds for the medium-weight helicopters program.

 

[randomradio]

All our procurement and upgradation
Programmes have now speeded up
Thanks to UNCLE XI Jinping


In Hindi we say.
Ek Jhatke me Seedhe ho gaye

That is we have come to our senses in just one " Blow "

We have to see how far that's true. Although defence spending has gotten greater priority now, it's still not enough.

Plus most of our modernisation was planned to be signed during the end of Modi's second term, from 2022 onwards, and actual spending to be done in his third term. So the overall plan has not really changed.

 

[randomradio]

we have to see other benefits with this deal. this will definitely help us to create an independent private aeronautical industry which will contribute to our future fighter jet programs... also the HAL rotary division will get minimum support funds for the medium-weight helicopters program.

The LCA will be brilliant for our industry. There's nothing like developing and producing our own products.

I am hoping we hear good news on the engine front as well. It's about time the K9+ is in the air.

 

[Hydra]

All our procurement and upgradation
Programmes have now speeded up
Thanks to UNCLE XI Jinping


In Hindi we say.
Ek Jhatke me Seedhe ho gaye

That is we have come to our senses in just one " Blow "

1) we didn't learn any lesson from doklam, 2017.
2) Nothing from Feb 27,2019 too
Now ladakh incident! After this year union budget only we can confirm that wheather we have learn any thing or not.

 

[Milspec]

Amortisation of Costs

The Sunk Costs of MKI are not high
Because all that money invested was a Grant by GOI , So not much depreciation expenses

Where as for LCA there is new infrastructure being created

This money is being loaned by Banks or some investment by GOI
Which is the largest shareholder

Every product is a different "Account " for the company

Even MKI upgrades will be accouted separately

How do you know that? Either ways if HAL has to spend money it has to spend it from it's own reserves, there are no handouts for anything. That is not how AOP's work.

 

[Milspec]

The IAF do the planning. The execution is done by MoD and DRDO. We didn't fail in the planning, it's the execution part that failed. The IAF still wants what they planned more than a decade ago and they haven't changed anything much as of yet. It still remains 200+ MKI, 200+ Rafale and 150 AMCA.

The MKI's production wasn't planned until 2021, it was supposed to end in 2017. And in 2006, the schedule was moved up to 2014 by increasing the production numbers. HAL failed to deliver the numbers necessary. It was a 14-year production run for 140 jets. You know there's a pretty big problem when the line delivers 16 jets a year, but takes 19 years to deliver 140 jets. Is it surprising that the forces question HAL's ability to deliver the LCA in time considering their track record? Even Jaguar, M2000 and Mig-29 upgrades have been delayed. MKI overhaul was also delayed. Furthermore, the MKI was supposed to be upgraded starting in 2010, alongside its first overhaul, but the govt didn't have the money for it, it was all needed for the Rafale contract. It was supposed to have gone the Su-35 way since back then.

LCA went through a number of iterations before they zeroed in on the current designs. In the 80s, the US defence budget was greater than India's GDP, so they obviously had more options. Now that we have such new options, we are also exercising them, for example, getting competitors for HAL and creating competition within the industry even for R&D through the SPM program.

If the LCA and AMCA designs don't work, then they wouldn't get to the FSED phase in the first place. But since the IAF has planned for 4-6 generations of jets in just 3-5 decades, an alternative is always ready, albeit with a delay. Not so with air forces like the US or France who are stuck with 1 or 2 designs and have no choice but to make them work. The F-35 is the best example. If they screw up, they don't have an alternative. This is what's so amazing about the IAF's ability at thinking ahead, there are plenty of alternatives coming up and there's not a single air force with so many choices and with decisions already taken. Their planning has properly covered all bases. Since we can assume FGFA has failed, the alternative still remains Rafales and a quicker induction schedule for AMCA by splitting it into Mk1 and Mk2, and even then there's still some window for the Su-57 to squeeze through. So only the numbers and types have changed. If the US screws up the F-35, they are screwed for the next 2 decades. Similarly, if they screw up NGAD, they got nothing to fall back on, they can only buy more of the old stuff, basically modernised F-35s.

For each individual program at the high end, there is no real fall back strategy. As the IAF has already pointed out a long time ago, there is no plan B for the Rafale. All you can do is get some more of what you already have, which is what the IAF unfortunately did by pushing the MKI numbers up by 80+ more jets when the Rafale and LCA got delayed, or get an alternative at a later date. The IAF never planned to operate this many MKIs, IAF officers, including two air chiefs, have already pointed that out publicly. If AMCA fails, then the IAF will have to chase after whatever's available in the global market, which could either be the Su-57 Mk3 or the F-35 Mk2. So there is a strategy in place for imports, which is the point of the DPP.

Most of the IAF's plans are stuck due to budgetry issues, not technical or bureaucratic issues. The MKI upgrade was cancelled due to not having the money for it. The Rafale contract was not restarted due to money crunch. FGFA didn't go through because of our poor finances. And now, AMCA is yet to start since it's still awaiting funding. Only LCA was stuck due to the incompetence of our industry, this program never lacked resources.

You see, nothing here is the IAF's fault. HAL screwed up MKI production. MoD screwed up MKI overhaul and upgrade contract. ADA screwed up LCA's development. HAL and MoD screwed up MMRCA. MoD and DRDO (along with the Russians themselves) killed FGFA. And now, MoD has delayed AMCA. These are the facts, with reasons covering financial, technical, bureacratic arenas and with a healthy dose of incompetence. But let's blame the IAF 'cause it's easy, when not a single decision is made by them for any of the above. They only do the planning and create QRs (and pretty modest ones at that), and unfortunately fight with what they have.

In short , sab log galat, main jo kahu wohi sahi?

 

[Hydra]

How do you know that? Either ways if HAL has to spend money it has to spend it from it's own reserves, there are no handouts for anything. That is not how AOP's work.

Its a PSU mate, all the profite they make is going to government. So they cannot keep a fund with them.

 

[Milspec]

Its a PSU mate, all the profite they make is going to government. So they cannot keep a fund with them.

Nopes, before this government, HAL's reserves were around 9000cr, now it cant pay salaries without borrowing. A similar fate awaits most PSU's. The next ones to go down that line will be CSL, BDL, BEL. The government can get the money out of PSU's as dividends, which is fine. The new strategy is to defer payments indefinitely.

 

[Milspec]

A more advanced version of the jet now costs less than $25M in Russia because of the exchange rate doubling for the ruble.

But the current government just placed orders for 21 Mig29's to be procured from russia at 7418cr, i,e $49 Million, are you insinuating that the All-knowing, All Planning IAF bought Mig29 at almost twice the price of advanced versions of MKI? That doesn't bode well for the IAF?

 

[Sathya]

But the current government just placed orders for 21 Mig29's to be procured from russia at 7418cr, i,e $49 Million, are you insinuating that the All-knowing, All Planning IAF bought Mig29 at almost twice the price of advanced versions of MKI? That doesn't bode well for the IAF?

S jha tweeted that he post the cost break up for tejas deal.. Lets wait for it.

 

[JustCurious]

There's no solution. It's just a lesson to all that if you screw up, you will suffer for it later. What goes around comes around.

Second-hand jets are not a solution. Neither Taiwanese nor French Mirage 2000s, even if available, will require upgrades, which won't happen until after 2025 even if we sign up today.

Our only immediate solution is to upgrade whatever we have with better weapons, like getting a decent number of Derby ERs for the MKIs and LCAs within the year. And hope that the LCA project is not delayed any more than it already has.

As a war-planner, it shouldn't be perceived like - there is no solution.

There are asymmetrical war-fighting capabilities to be acquired which when combined with smart diplomacy & fresh tactics (dissuading/detering PLA attack via innovative means), the very possibility of a conflict can be postponed beyond 2025.

So, lets not approach the challenge of potential PLAAF aerial attack for purely from tunnel-vision of conventional "interception"
I am specifically thinking :

1. Better Domain Awareness: Augmentation in AWACS fleet (widest gaping hole in our deployment; Even PAF already took advantage in Feb 2019 ) + Dense network of man-deployable Radar Meshes on Mountain-tops + HALE drones + Mini-surveillance drones + SIGINT + ELINT UAV's
2. Defensive capabilities: MR-SAM + QR-SAM + AKASH batteries on all theaters of perceived conflict
3. Offensive capabilities: Expediting the induction of Rudram + SAAW + Transferring Mig29K's from IN to IAF (as @raghu1974 pertinently mentioned, that's more than 2 fully-functioning squadrons) + Equipping all Mig 29's & SU30 MKI's with I-Derby ER & Brahmos-A + Inducting Equipping LCA with I-Derby ER & Astra MK2 & ASRAAM or MICA + Inducting fleet of more Harpy drones + Predator variants + Armed Rustom variants etc.

All of the above can achieved within 3-4 years, without burning the bank.

I have intentionally skipped all the things IN & IA can/will do to deter the very potential of PLA invasion (beyond the scope of thread).