Said it last yearThis DM has no courage/conviction to stand up to DPSUs. Everything good happened to this ministry last 5 years were initiated by parrikar .
The SP policy has been diluted so much that its no different from current 'Buy-Make' procedure.
MoD allowing HAL to bid is just unacceptable. (MDL was supposed to be an exception)
Its Ajay Shukla. he won't BS on these subjects. I hope DAC will overrule this.@Ashwin - any true to this??
Agree... It will be bad for the SP modelMore drama !.
Its Ajay Shukla. he won't BS on these subjects. I hope DAC will overrule this.
Yes, but that was HAL itself claiming, this is a recommendation directly to the ministry by a third party.I do remember that HAL pull the same "we have move experience" card w.r.t the the Avro replacement
But what's wrong if the ALH conforms to the IN Specifications ? Must we proceed with the tender & sacrifice millions of precious foreign exchange just to keep up appearances? We can expend the amount pursuing more cutting edge stuff like the NMRH project where we don't have an indigenous alternative as of now.Yes, but that was HAL itself claiming this is a recommendation directly to the ministry by a third party.
There isn't anything wrong with going for ALH. It depends on the end goal. Here the transport aircraft tender and the SP model was to kickstart the private aerospace industry so that they can give a healthy competition to the monopoly of HAL. If they want to graduate from offset part producer to the next level of integration and whole production it has to be with the Govt support. The government previously invested heavily for capacity creation in these DPSUs by letting go of the same 'precious foreign exchange'. And it's still ongoing !.But what's wrong if the ALH conforms to the IN Specifications ? Must we proceed with the tender & sacrifice millions of precious foreign exchange just to keep up appearances? We can expend the amount pursuing more cutting edge stuff like the NMRH project where we don't have an indigenous alternative as of now.
“Each HAL-built Su-30MKI fighter costs around $70.3 million, where as a Russia-supplied fighter costs around $42.15 million,” the senior Air Force official said.
Private warship builders live off scraps, while the figures tell the real taleAmongst defence industry analysts, the first question this raised was: is L&T running Kathupalli so inefficiently that public sector yards can build warships 30-45 per cent cheaper than them? How did public sector shipyards win so conclusively?
Confronted with that question, Jayant Patil, L&T vice president who oversees its defence vertical explained how his company structured their bids. Working off a “basic material price”, L&T added to that labour cost and services, escalation, yard recovery, working capital costs, contingencies and a provision for warranty.
“Our final quote was about 1.7 times the basic material price, to cover the other costs. But our public sector competitors’ quotes were just 1.1 or 1.2 times the basic material price. Clearly, they did not need to factor the costs that we did,” said Patil.
What Patil left unsaid was what everyone in the industry knows: that public sector shipyards, which get most of their income from “nominated” orders from the defence ministry, enjoy enormous financial advantages in bidding against private shipyards.
DPSUs have financial buffers that accumulate from being able to cost “nominated” project lavishly, in a single-vendor environment, and obtain advance payments from the defence ministry that pile up into large cash reserves. Consequently, public sector shipyards incur no working capital costs and, in fact, earn billions in interest on their cash reserves.
Hence I mentioned cutting edge stuff like helos with war fighting abilities. We need SPM's there.The Utility Helos are hardly cutting edge stuff. Nevertheless, what HAL has achieved thru various derivatives of the ALH is commendable.Just coz we want to reduce our dependency on DPSU's doesn't mean anything by way of capacity creation goes.There isn't anything wrong with going for ALH. It depends on the end goal. Here the transport aircraft tender and the SP model was to kickstart the private aerospace industry so that they can give a healthy competition to the monopoly of HAL. If they want to graduate from offset part producer to the next level of integration and whole production it has to be with the Govt support. The government previously invested heavily for capacity creation in these DPSUs by letting go of the same 'precious foreign exchange'. And it's still ongoing !.
Why shouldn't the private sector get a fighting chance?
Our naval shipbuilding is a glowing example of why we shouldn't L1 (aka market) decide on private sector winning MoD contracts. There where four shipyards a decade ago now only one left.
Private warship builders live off scraps, while the figures tell the real tale
DPSUs get 'nominated' all the time. But we can't reserve something for the private sector?
Also, Dhruv is hardly 70% indian after producing 200+ numbers. In SP model NUH has to reach 50%+ indigenization by its last phase including its supply chain. Here, unlike HAL products they do get a chance to export to the western market. So we can assume some amount of FOREX difference will return in time.
Because the cost of importing 100+ NMRH is astronomical compared to NUH. It will be $10+ billion if we go by the SeaHawk FMS numbers. That's why the navy prioritized NUH over it. They will probably split the NMRH into direct import for current needs and HAL design in a long time. (Similar compromise of ditching MMRCA). NUH is low hanging is and it's now. Remember NMRH was also under SP model.Hence I mentioned cutting edge stuff like helos with war fighting abilities. We need SPM's there.The Utility Helos are hardly cutting edge stuff. Nevertheless, what HAL has achieved thru various derivatives of the ALH is commendable.Just coz we want to reduce our dependency on DPSU's doesn't mean anything by way of capacity creation goes.
Where did I refer to whole sale imports of either the NUH or the NMRH? Whose posts are you reading? My point is a very simple one. If those requirements can be met in-house with an existing product with bare minimum modifications, pls don't expend valuable time , money & indulge in hair splitting but go in for an indigenous variant even if it isn't state of the art but not obsolescent either.Because the cost of importing 100+ NMRH is astronomical compared to NUH. It will be $10+ billion if we go by the SeaHawk FMS numbers. That's why the navy prioritized NUH over it. They will probably split the NMRH into direct import for current needs and HAL design in a long time. (Similar compromise of ditching MMRCA)
By investing in the private sector they are not repeating the mistake but creating a market economy for the aerospace industry so that it will become efficient with the competition.
I did not make the size of the market argument because my larger point was on supply-side efficiency.
I thought this is what you meant by 'cutting edge stuff'Where did I refer to whole sale imports of either the NUH or the NMRH? Whose posts are you reading?
We can expend the amount pursuing more cutting edge stuff like the NMRH project where we don't have an indigenous alternative as of now.
They do not meet requirements as of now.My point is a very simple one. If those requirements can be met in-house with an existing product with bare minimum modifications
There isn't anything wrong with going for ALH. It depends on the end goal.
MoD expert rejects foreign helicopter, HAL says Dhruv is suitable
By Ajai Shukla
Business Standard, 16th Jan 20
With the ministry of defence (MoD) poised to sanction on Friday a Rs 21,738 crore project to build 111 naval utility helicopters (NUH) in an Indian private sector firm, an MoD expert has suggested the project be scrapped.
The MoD and the navy want the NUH to be a foreign helicopter, built through the “strategic partner” (SP) model. This involves selecting a deep-pocketed Indian private firm as the SP, which will build the helicopters in India using technology supplied by a separately selected foreign “original equipment manufacturer (OEM).
However, former integrated defence staff chief, Vice Admiral Raman Puri (retired), who the department of defence production (DDP) has appointed as a consultant, has advised against inducting a foreign helicopter as NUH, when defence public sector unit Hindustan Aeronautics Ltd (HAL) is in a position to supply a naval version of its indigenous Dhruv advanced light helicopter (ALH).
Puri has recommended the indigenous Dhruv chopper over a foreign design, citing Para 23 of Chapter II of the Defence Procurement Policy of 2016 (DPP-2016), which states: “Preference will be given to indigenous design, development and manufacture of defence equipment. Therefore, whenever the required arms, ammunition and equipment are possible to be made by Indian industry, within the time lines required by the services, the procurement will be made from Indian sources.”
On November 19, the MoD asked HAL for its comments. HAL has replied that it is “generally in agreement with the viewpoints provided by the consultant.”
Puri also pointed out that Para 23 states: “Accordingly the [MoD’s] categorisation committee, while considering categorisation under the DPP will follow a preferred order of categorisation,” in which “Buy (Indian – IDDM)” is top priority. IDDM is the acronym for “Indian Designed, Developed and Manufactured,” a criterion the Dhruv ALH meets.
HAL has pointed out to the MoD that the Dhruv ALH has been in operation with the navy and coast guard for about two decades. It notes: “ALH has proved its robustness in all operating conditions, as validated by accruing more than 260,000 flying hours and [flying] more than 280 helicopters in the services of various customers.”
The navy has opted for a foreign helicopter, to be built on the SP model, because the Dhruv ALH does not have foldable rotor blades that allow it to be parked within the cramped confines of a hangar on a warship.
But HAL’s response to the MoD states: “The design of ALH is such that role change can be achieved with minimum modifications and minimum time, which will enable the navy to use this helicopter…”
HAL wrote that, while it did not earlier possess technology for foldable blades for the Dhruv, it “initiated a project with internal funding to design and develop a blade/tail boom folding mechanism on the ALH, which will meet the stowage requirements of the NUH.”
HAL executives say foldable blades can be easily developed in 2-3 years, a period shorter than what the MoD would take to sign a global NUH contract.
HAL’s letter also notes that the tender requires the foreign OEM to transfer nine critical technologies, which include a rotor system, transmission system, hydraulics, self-sealing fuel tanks, vibration isolation system and others. “All these critical technologies are available with HAL in the case of the ALH-based NUH, as it is HAL’s own development,” says HAL’s letter, which Business Standard has reviewed.
HAL also claims that “many other critical and advanced technologies [are] available with HAL, like the avionics system, glass cockpit, composite airframe technologies etc.”
Puri’s recommendations also reflect his opinion that it would be wasteful to buy a foreign helicopter, pay for transfer of technology, and develop manufacturing capability in an Indian private sector SP when all this already exists with HAL.
He has pointed out that the SP’s new manufacturing line would have no work after building 111 NUHs for the navy. The “transfer of technology” cost paid to the OEM and the cost of setting up a new NUH production line would make a foreign NUH far more expensive than the Dhruv, which HAL already manufactures in Bengaluru.
“Since the ALH-based NUH is conceived, designed and developed by HAL, there is no necessity for any ToT and thus a substantial amount of foreign exchange… can be saved,” HAL has argued.
HAL has also pointed out that it would be able to integrate weapons and sensors to meet the navy’s requirements in the future, upgrade the platform at any stage in its life-cycle, resolve technical issues and carry out “obsolescence management”, which involves ensuring the supply of spare parts all through its service life.
Puri’s intervention and HAL’s argument will not be welcomed by private sector firms who have responded to the MoD’s NUH tender. These includeTataAdvanced Systems Ltd, Adani Defence, Mahindra Defence, Reliance Defence and the Kalyani Group. In addition HAL submitted two responses – one in its individual capacity and another in a joint venture with Russian Helicopters Ltd called Indo-Russian Helicopters Ltd (IRHL).
The foreign helicopters in the fray include two Airbus helicopters – the AS 565 Mbe (Panther) and the H145M – as well as US firm Sikorsky’s S76D and the Russian Kamov 226T. The Panther is regarded as the front runner.
Broadsword: MoD expert rejects foreign helicopter, HAL says Dhruv is suitable
@Ashwin - any true to this??
HAL simply doing its best to maintain a monopoly. The IN will obviously not fall for such schemes. But MoD is questionable. If the govt cares about the future of aerospace in the country, they will go ahead with supporting the private industry with NUH.
Btw, the navy wants helicopters below 3T, while ALH is 5T. That's one of the primary reasons for its rejection.
More drama !.
Its Ajay Shukla. he won't BS on these subjects. I hope DAC will overrule this.
Twin engine but below 3 T?
Otherwise LUH can compete right,..
LUH already has foldable blades
That's true but i don't remember him getting wrong on these kinds of subjects.I don't know any other defence journalist who has been more scorned by the military than him.
Not correct.Btw, the navy wants helicopters below 3T, while ALH is 5T. That's one of the primary reasons for its rejection.