A FLIGHT DELAY
THE DEFENCE MINISTRY’S QUEST TO BUY JETS IS FLYING AT BIPLANE SPEED
THE INDIAN AIR FORCE WILL CELEBRATE its 85th anniversary on October 8 under a dark cloud—due to its shrinking fighter squadrons. The IAF is now down to 33 squadrons from a high of 39.5 over a decade ago (each with a strength of 18 jets), much lower than its authorised strength of 42 squadrons. Over the next five years, these numbers will dip into the 20s when the IAF completely phases out 11 squadrons of ageing MiG-21 jets (a total of around 220 jets). The replacements for these single-engined workhorses, the mainstay of the IAF since the 1970s, have been marked by delays stretching over a decade.
In 2015, the defence ministry under Manohar Parrikar decided to split this requirement for at least 220 singleengined jets between the indigenous Tejas Light Combat Aircraft and a foreign single-engined fighter which would be built within the country in collaboration with a private sector firm. Both these lines of approach are now facing troubles.
In 2005, Hindustan Aeronautics Limited (HAL) had promised to deliver 40 LCA Mark-1 fighters by 2018. Production delays have led to it delivering only four fighters till date. The delivery of 83 LCA Mark1A, for a total of 123 Tejas, is still farther away. The government’s strategic partnership (SP) policy, which was to select a foreign firm to locally build a single-engined fighter, has once again slipped into the slow track. Under the SP policy, first recommended by the Dhirendra Singh committee in 2015, the Indian private sector would locally manufacture urgently-needed fighter jets, submarines and military helicopters worth over $30 billion in collaboration with foreign equipment manufacturers.
The policy was cleared by then defence minister Arun Jaitley on May 20, but there has been no major forward movement on it in the past four months. The most crucial decision
would have to be the selection of six private sector firms which could make the defence hardware locally and form an alternative to the public sector units. So far, all that has happened is that the MoD has sent out ‘requests for information (RFI)’ to two single-engined aircraft manufacturers, Lockheed Martin which makes the F-16 Fighting Falcon, and SAAB of Sweden which makes the Gripen. The MoD was to have simultaneously identified the private sector defence firms to partner with the foreign OEMs (original equipment manufacturers), but that has not happened either.
“The RFI is just the first of 11 stages through which every procurement programme has to pass before a deal is signed. Each of these stages carries with it the potential to derail the programme,” says Amit Cowshish, former financial advisor in the MoD.
On June 16, Lockheed Martin teamed up with Tata Advanced Systems Limited (TASL) to build the F-16 locally while Saab on September 1 announced a tie-up with the Adani group to build the Gripen in India.
Both Lockheed Martin and Saab have made attractive offers to set up sophisticated aircraft production lines within India. These facilities, they say, will not only build their fighters within the country but also create an aerospace ecosystem. (State-owned HAL is the only aircraft manufacturer in India now.)
But both partnerships are essentially symbolic because the MoD is yet to even shortlist which Indian private sector firms qualify for being strategic partners. The process mandates for the MoD to choose the foreign manufacturer and then, in a separate exercise, direct the shortlisted Indian company to enter into legal bids with them before submitting separate technical bids to manufacture the weapons in India.
IAF has assured private sector players that they would get the RFIsfor single-engine jet fighters by the end of September. That hasn’t happened yet. Sources familiar with developments said the ministry was still debating the matrix for deciding which Indian firms would be shortlisted as strategic partners. “The system lacks a process owner which is like a management consultant who will identify the whole process,” says a private sector CEO.
Worse, the entire 2017-18 financial year seems to be slipping away with no decision in sight. If the expression of interests had gone out to the Indian
private sector firms by September, as indicated earlier, they would have submitted bids in two months. That would have given the MoD at least until March 31 to decide on the bids. Defence minister Nirmala Sitharaman had said, after taking over on September 4, that Make in India in defence would be one of her key focus areas. But in the one month that she has been in office, there has been little visible progress on the SPs.
The strategic partnership would have been a silver bullet for at least one other trouble beside the IAF’s two-decade-long quest for an aircraft to replace the MiG-21s. It could resuscitate the government’s comatose Make in India initiative. Apart from indigenous shipbuilding projects and those for surfaceto-air missiles (which, it can be argued, would have been made indigenously in any case), Make in India in defence has so far seen only one major contract—a Rs 4,500 contract between L&T and Hanhwa Techwin announced this April to domestically build 100 self-propelled 155 mm howitzers.
The cardinal sin, officials say, was the MoD’s diluting the SP concept after Parrikar’s departure from South Block in March. Earlier, the government would have nominated the Indian-foreign partnership that emerged as the lowest bidder in a contract to build a weapons platform. “The concept changed completely after March when the government said that the foreign and Indian partnership would have to submit price bids, just like any other contract,” says an official. The MoD also included defence public sector undertakings( D PS Us) into the SP model, a feature that was not there earlier.
The introduction of price bids converted strategic partnerships into a pure competitive process, very similar to the existing Buy and Make programme existing under the Defence Procurement Procedure which governs the MoD’s defence hardware acquisition. (Under Buy and Make, a foreign OEM produces defence hardware within the company in collaboration with an Indian firm.) There are two other fears within the private sector defence industry vying for these multi-billion contracts. With sluggish economic growth, defence is unlikely to be a major spending priority for the government. A spate of major state elections beginning with the Gujarat elections in December this year and ending with the general elections in May 2019 is likely to further distract the government.
Delays on the single-engined aircraft contract could see it go the way of another programme to plug its single-engined shortfall—the doomed Medium Multi-role Combat Aircraft (MMRCA) acquisition programme. The MMRCA contest ran between 2004 and 2015 when it was scrapped as it neared the final stage of contract negotiations. The programme, which began soon after the Kargil War as an additional buy of 126 Mirage-2000 aircraft, ballooned into a muddled global contest involving both single and twin-engined French, Russian, Swedish and American jets, before being scrapped (both the F-16 and Gripen were MMRCA contenders). A separate contract for 36 Rafale multi-role jets worth $8.3 billion was inked with France’s Dassault in 2016. Sheet metal for the first Indian Rafale jets were cut in the manufacturer’s plant in France last month with the first aircraft due for delivery by 2020.
The IAF, which wants larger numbers of fighter jets to tackle a probable two-front war with China and Pakistan says it needs the jets quickly over the next five years. Not that the aircraft it has at present don’t meet the mark—the Su-30MKIs, over 250 of which form the backbone of the IAF’s fleet, are highly capable platforms. Three Su-30s can carry as much ordnance as an entire squadron of MiG-21s and at three times the range. HAL will deliver the last batch of 35 locally assembled Su-30MKIs to the IAF by 2020. The closing of the Sukhoi line and the fading of the MiGs is causing much concern though. This is because the IAF says it needs greater numbers of multi-role aircraft when facing the increasingly sophisticated fighters being fielded by the Chinese and Pakistan air forces.
“It’s going to be a crisis soon when all the MiG-21s are gone,” says Air Marshal P.S. Ahluwalia, former Air Officer Commanding-in-Chief (AOC-in-C) West. “We don’t even have the luxury of waiting for transfer of technology. We need to get either Lockheed Martin or Saab to set up a plant here and start producing the aircraft.” The IAF’s next set of worries, aviation experts warn, is also around the corner. In less than a decade, it will have to start retiring eight squadrons of twin-engined Jaguar strike aircraft and MiG-29 interceptor aircraft, again, with no replacements in sight. The cost of delays is just piling up.
SINGLE ENGINE LIGHT FIGHTERS Size of contract $10 billion (estimated) Number 100 fighters Requirement Replacement of 11 MiG-21 squadrons
RATAN TATA Tata Advanced Systems Limited: Lockheed Martin consortium Aircraft: F-16 Block 70
GAUTAM ADANI Adani Group: Saab AB consortium Aircraft: Gripen E