LCA Tejas Mk1 & Mk1A - News and discussions

[Milspec]

lets see:

FY 2016-17: HAL Turnover Soars to All Time High at Rs. 17,406 Crores; Receives Orders worth Rs. 21,000 crores

Worthless if actual payments are not made and HAL has overdraw to keep itself afloat.

HAL Opens New Chapter in Defence Equipment Maintenance through PBL for ALH; Signs Rs. 8,000 Crore Contract with Indian Navy & Indian Coast Guard

Worthless if actual payments are not made and HAL has overdraw to keep itself afloat.

Defence Minister Launches Production of HAL Designed LCH; Dedicates Hawk-i to the Nation

Worthless if actual payments are not made and HAL has overdraw to keep itself afloat.

HAL Signs MoU with Government; Aims Higher Revenue

Worthless if actual payments are not made and HAL has overdraw to keep itself afloat.

HAL Gets Orders for 41 Advanced Light Helicopters

Worthless if actual payments are not made and HAL has overdraw to keep itself afloat.

HAL Facilities Are of National Importance, Cannot be Allowed to be Idle: RRM, HAL to Invite Private Entities for Manufacturing ALH Dhruv (Civil Version)

Worthless if actual payments are not made and HAL has overdraw to keep itself afloat.

and this in April 2018:
HAL Achieved all time High Turnover of Over Rs. 18K Crores[/QUOTE]
Worthless if actual payments are not made and HAL has overdraw to keep itself afloat.



You can place order for 50 billion dollars, but if you are not paid and made to pay dividends through your nose to the President of India, erode complete Working capital; guess what happens;

Higher Employee turnover, poor project management, Vendor turnover, material outage, Production overruns, poor quality and then the Defence Minister will claim HAL is not a capable enough organisation thus orders need to go outside.

Here you have HAL whose dues are not cleared for services and equipment delivered; while dassault gets advance payments without deliveries? Quite perplexing to me.

MDL, OFB, GRSE, CSL, BEL, BHEL, BDL all need to be watch full, MoD will be coming for them sooner or later. Would you be doing business with a party that would withhold payments for more than a year? If anything MoD should issue 1200cr interest for this.

 

[Bharath]

Higher Employee turnover, poor project management, Vendor turnover, material outage, Production overruns, poor quality and then the Defence Minister will claim HAL is not a capable enough organisation thus orders need to go outside.

I believe you are saying GoI will default on payments to HAL?

 

[Milspec]

I believe you are saying GoI will default on payments to HAL?

Now, rather a very simple question.
Cash advances to Dassault for nothing being delivered yet but 15400 cr payment withheld for what ?


Isn't it a valid question, why HAL is not being paid for over a year?Any such precedence where an organisation due are withheld for over a year in the scale of 15400 crores?

 

[Bharath]

Now, rather a very simple question.
Cash advances to Dassault for nothing being delivered yet but 15400 cr payment withheld for what ?


Isn't it a valid question, why HAL is not being paid for over a year?Any such precedence where an organisation due are withheld for over a year in the scale of 15400 crores?

agree that its a valid question. But I dont believe GoI (regardless of whichever govt at the center) will default on HAL's dues. for domestic companies (PSUs) If i remember correctly, GoI's guarantees are regarded as cash equivalents (since GoI would not default)

and for foreign companies getting cash beforehand: its in the agreement that a part of the funding will be paid on agreement - I believe thats 15% of the total costs.

I dont believe GoI will default and HAL will keep getting bigger - my bigger issue is, HAL needs to modernize quicker and deliver products on time. it has failed to live up to its timelines time and again and its really costing us all these issues.

 

[Milspec]

agree that its a valid question. But I dont believe GoI (regardless of whichever govt at the center) will default on HAL's dues. for domestic companies (PSUs) If i remember correctly, GoI's guarantees are regarded as cash equivalents (since GoI would not default)

and for foreign companies getting cash beforehand: its in the agreement that a part of the funding will be paid on agreement - I believe thats 15% of the total costs.

I dont believe GoI will default and HAL will keep getting bigger - my bigger issue is, HAL needs to modernize quicker and deliver products on time. it has failed to live up to its timelines time and again and its really costing us all these issues.

GoI guarantees are cash equivalent, not HAL's.

If HAL does not have working capital, it cannot pay it's vendors, that means it cannot buy F125's from Honeywell for Jag, FG404/414 from GE, Radars from Elbit, so on and so forth. It cannot spends it's AOP capex which adresses your concerns of modernization.

When you are forcing HAL to Pay GOI 15000cr in dividends and buyback, while holding it's payments in tune of 15000cr for over a year; is that a positve development for HAL or for that matter the Make in India program?

 

[randomradio]

Given the recent development; would this government even let HAL survive that long?

HAL will survive for decades to come.

 

[Bharath]

If HAL does not have working capital, it cannot pay it's vendors, that means it cannot buy F125's from Honeywell for Jag, FG404/414 from GE, Radars from Elbit, so on and so forth. It cannot spends it's AOP capex which adresses your concerns of modernization.

When you are forcing HAL to Pay GOI 15000cr in dividends and buyback, while holding it's payments in tune of 15000cr for over a year; is that a positve development for HAL or for that matter the Make in India program?

as I already said -

agreed that there is a cash crunch, but I dont believe there will be a default.
we can agree to disagree there.

on HAL's performance though:
cost and time overruns, over promise and under deliver (that is just an understatement), 10 fulfilled LCA orders (supposed to be a flagship program) being delayed does not evince much faith when @randomradio says LCA would compete for LMRCA for malaysia.

and there is no two opinions in this regard. atleast the majority of the folks would agree to the lethargic attitude shown towards home grown porgrams and please go back to my previous posts and history, I was a staunch supporter of HAL and LCA (still like the product - LCA). I still believe HAL has some of the best talents and capabilities in India, but they have just not done justice to their position.

 

[Milspec]

as I already said -

agreed that there is a cash crunch, but I dont believe there will be a default.
we can agree to disagree there.

on HAL's performance though:
cost and time overruns, over promise and under deliver (that is just an understatement), 10 fulfilled LCA orders (supposed to be a flagship program) being delayed does not evince much faith when @randomradio says LCA would compete for LMRCA for malaysia.

and there is no two opinions in this regard. atleast the majority of the folks would agree to the lethargic attitude shown towards home grown porgrams and please go back to my previous posts and history, I was a staunch supporter of HAL and LCA (still like the product - LCA). I still believe HAL has some of the best talents and capabilities in India, but they have just not done justice to their position.

You know what, poor delivery and production development of LCA for entire last year 2018 seems to be getting some context now. No payments for the entire year, boxing with it's hands tied behind it's back.

If GoI is going to intentionally hurt a national asset, I will hold no bars to go after this dispensation - sorry if I sound childish.

 

[randomradio]

on HAL's performance though:
cost and time overruns, over promise and under deliver (that is just an understatement), 10 fulfilled LCA orders (supposed to be a flagship program) being delayed does not evince much faith when @randomradio says LCA would compete for LMRCA for malaysia.

The criticism against HAL on LCA comes from ignorance. They are actually sticking to the deadline. Let's not forget that for the IOC and FOC jets, HAL was authorised a production line of only 8 jets per year. The CCS approval for the second line came only in 2017.

The second line was meant for delivery of the third tranche of 83 jets. But, due to the delay with FOC, HAL will be able to deliver FOC jets through the second line as well. By mid-2020, we will have all the IOC and FOC single seat jets.

 

[Milspec]

HAL will survive for decades to come.

not if aadarniya Sitaramen ji drains working capital from HAL. And if that indeed is the the strategy, at-least pre-empt and sell it in a block deal in it's current state to L&T, for heaven sake dont strap it with giant debt and let it fall to Anil Ambani.

 

[randomradio]

not if aadarniya Sitaramen ji drains working capital from HAL. And if that indeed is the the strategy, at-least pre-empt and sell it in a block deal in it's current state to L&T, for heaven sake dont strap it with giant debt and let it fall to Anil Ambani.

Who will buy a debt-laden PSU?

 

[Milspec]

Who will buy a debt-laden PSU?

same guys who buys debt laden private shipyard? debt works the same way for private or govt owned enterprise.

So what is the logic of MoD to wipe off HAL's working capital?

 

[randomradio]

same guys who buys debt laden private shipyard? debt works the same way for private or govt owned enterprise.

So what is the logic of MoD to wipe off HAL's working capital?

I don't believe there's an ulterior motive though.

 

[Milspec]

I don't believe there's an ulterior motive though.

So incompetence perhaps?

 

[_Anonymous_]

What's this about Malaysia procuring the LCA? @randomradio

All we have is a news report suggesting LCA's participation in a Malaysian air show on their invitation. Must we read so much into it, especially since we're not even sure of the FOC, as of now. Add to that the plethora of Israeli avionics, which would definitely beg replacement and another "FOC" to suit Malaysian requirements. Where's the time, assuming all this healthy dose of optimism, is genuine
?

 

[_Anonymous_]

TRISHUL: The Multi-Phase Castration Of HAL: From Early 1960s Till To Date

@Milspec ; @randomradio

 

[randomradio]

So incompetence perhaps?

It's basically inadequate defence allocation.

 

[_Anonymous_]

HAL will survive for decades to come.

Only survive, not thrive? In my opinion, there's a need to break up HAL into at least 3-4 cos in the near future. One catering to manufacture FA's & Trainer FA's, 2nd to manufacture Civilian Aircrafts like the RTA & transport aircraft / tankers etc for the armed forces. A 3rd co to manufacture helicopters for armed forces & civilian needs including the turbofans needed for such operations and a fourth exclusively to develop & manufacture turbo fans / turbojets including its development which means amalgamation with GTRE.

The first co should see amalgamation with ADA too & the 2nd with NAL with Cross holdings between all 4 cos. HAL in its present form is simply too large, unwieldy and a jack of all trades.

 

[randomradio]

What's this about Malaysia procuring the LCA? @randomradio

Malaysia planned to buy 18 MMRCA jets. Rafale, Typhoon, Mig-35, Gripen E, F-16 and SH. But they have deferred that program all the way to post-2025 due to a funding crunch. In the meantime, they started a program for 30 light fighter jets in the LCA class. So you can now expect LCA, JF-17, Korea's FA-50 and possibly even the Gripen C/D participating in it.

They earlier had 2 squadrons of A-4 Skyhawk and one squadron of F-5 Tiger. The two squadrons of A-4 were replaced with one squadron of BAE Hawk. Naturally, they need an actual fighter jet, hence a requirement for 30 LCA class jets.

The Malaysians don't want to get stuck between choosing China and Korea. Hence the request for India's participation.

All we have is a news report suggesting LCA's participation in a Malaysian air show on their invitation. Must we read so much into it, especially since we're not even sure of the FOC, as of now. Add to that the plethora of Israeli avionics, which would definitely beg replacement and another "FOC" to suit Malaysian requirements. Where's the time, assuming all this healthy dose of optimism, is genuine
?

The FOC you see now is final. Another FOC is not required.

Meaning, an FOC is not necessary when converting Mk1 to Mk1A. So a new Mk1B or Mk1M can be made for Malaysia sans Israeli electronics. Using Gripen E's electronics through Italy will be the best bet. And the Malaysians are already trained to use the Damocles pod.

 

[Milspec]

It's basically inadequate defence allocation.

For Dassualt all payment obligations met, when it comes to HAL not so much.

So what happens when HAL tasked with LCA Mk1A, and LCA MKII, LCH, ALH, LUH. HTT40, Jag Upgrade, Mirage Upgrade, Mig29UPG support, PSLV GSLV subsystems, Cheetak Cheetah, Cheetal overhaul, doesn't have working capital.

How does HAL buy high dollar subsystems F125N, FG404/414, Elbit Radars , sextant mfds, to raw materials like GRCF pre peg sheets and aluminum stampings, cable harnesses , connectors? Who pays these vendors and how?

Next obvious question - is this a new phenomenon or a has this happened over the years where payments in turn of 15000cr have been with held? Any such precedence in UPA I, II, NDA I times?

If MoD was not capable of paying it's dues, why did exact the services in that period more importantly when it was going to withhold payments in tune of 15000 cr why would it exact dividends and buyback in tune of 15000cr from HAL.

that doesn't seem just oversight or poor allocations, your make HAL pay 15000cr and withhold another 15000cr, that seems quite well planned, doesn't it?

Also is MoD going to clear the payment with interests? if not that is a 1200cr daylight robbery, isn't it?