By Ajai Shukla
Business Standard, 10th May 13
The defence ministry (MoD) today issued a Request for Proposals (RfP) to eight foreign aerospace vendors, inviting tenders for co-producing 56 medium transport aircraft to replace the Indian Air Force’s (IAF’s) aging fleet of Hawker Siddeley 748M Avro aircraft. The deal could be worth about Rs 28,000 crore.
The proposal requires the vendor to deliver 16 aircraft in flyaway condition and build 40 in facilities to be established with an Indian partner that it can choose. This proposal has been driven by the IAF, which wants to wean itself off a crippling dependency on the public sector Hindustan Aeronautics Ltd (HAL). While HAL has licence-produced a series of fighter aircraft for the IAF, including the high-end Sukhoi-30MKI, it has been afflicted with serious time and cost overruns and charged with sub-quality manufacture.
Amongst the companies invited to bid are Boeing of the US, Ilyushin of Russia, Antonov of Ukraine, Franco-German consortium EADS and Alenia Aeromacchi of Italy. The MoD has given bidders five months to choose and tie-up partnerships with an Indian Production Agency (IPA) and submit their “techno-commercial proposals.”
Air Chief Marshal NAK Browne, the IAF chief, has strongly backed this project, hoping that it will create a badly needed aerospace manufacture eco-system within the private sector.
At a lecture organized by CII in New Delhi on Sept 01, 2011, Browne told the private sector, “Once you start licensed production in partnership with a foreign partner, you will develop a basic aerospace eco-system: the R&D, the jigs, tools and expertise that would work for the entire country.”
The MoD said today that this deal “ensures inflow of Production Technology to the IPA in phases wherein the value addition in the manufacture by the IPA will gradually increase from 30% to 60%. The IPA will also obtain the Transfer of Technology for Maintenance (MToT) which will enable the IPA to provide life time product support and maintenance up to Depot level (sic).”
The Indian partner will be selected by the foreign vendor based on a set of criteria that are specified in the RfP. These exclude small and medium companies and those that have not been consistently profitable. It is learnt that Reliance Industries’ aerospace venture; Larsen & Toubro; and a Tata Group company.
HAL has staunchly opposed this arrangement, lobbying with the MoD to build the 56 Avro-replacement transport aircraft at HAL Kanpur, where the Dornier 228 aircraft is currently built.
Contacted for a comment, HAL has not responded.
The CEO of a reputed private sector defence company says that the number of aircraft to be built in India --- just 40 --- is too low to repay the investment that will be required to set up an assembly line and the flight infrastructure that would be needed.
However the MoD is looking at requirements beyond the IAF’s. Today it said, “The replacement for the Avro aircraft will have extensive requirements even in the rapidly expanding civil aviation sector, especially for flights between growing regional cities. Such combined requirements of IAF and the civil sector will provide large production orders.”
The IAF fleet of some thirty 748M Avro twin-engine aircraft, which is now over forty years old, was built under licence by HAL. The replacement aircraft now being built will have a payload of 6-8 tonnes (the Avro carried 5 tonnes); a cruising speed of 800 kmph (the Avro flew at 450 kmph); and a range of 2,500-2,700 km (the Avro's was 1,700 km).