Somnath-ji,
Debating with you is going in circles...quite frankly, you have an admirable capacity to bring in all sorts of extraneous issues, catch on to any twig, any throw away line so as to bolster your claims..
Bheem ji,
And on BEL? Not much better..Quoting from the latest annual report..
During 2008-09, BEL has spent a sum of Rs. 2,433.3
million on R&D. The expenditure on Revenue
account was Rs. 2,250.0 million and on Capital
account was Rs. 183.3 million
With all due respect, this doesn't prove much as a) R&D in the industry BEL is at can be achieved at the facilities of partner organizations and b) BEL can do R&D vis a vis its existing infrastructure as well which does not involve huge capex outlay into manufacturing units!
Not to mention that you deliberately chose to overlook plans to raise Capex to meet production requirements as well!
http://www.domain-b.com/companies/compa ... onics.html
I think at this point, it should be clear, where your "win the argument at all costs" method has taken this so called debate into..
So about 8% of R&D spend is capex....
Mrinal ji, you can quote selective "items, projects" etc..But these are the numbers - and they show..
Actually Somnath-ji, they dont show much.
In three firms I am aware of, 70% of the R&D allocation expenses for the year were allocated to manpower costs, as existing infrastructure was clearly sufficient to even meet a ramp up. The Capex investments are actually planned for FY-11 and FY-12.
But thats the issue here, any sort of numbers can be trotted out and have been trotted out by you to justify your ideological idee-fixe.
The manner in which you clutched on Bheem's claim was also indicative that this has become more of a "I need to win the arguement" at all costs approach.
I also find the patronizing claim that you made of "selective items/ projects" to be ludicrous.
On the one hand, you are unaware of even the basics of the company in question, or what it does, and what products it provides or the technology that goes into its programs. When informed, you clutch at such straws. Do a cursory 2-3 line search of an annual report or the like, divide a few numbers, google up a few claims and draw the conclusions you have! Such guesswork would not count for even a minutes worth of consideration in the real world!
Mrinal ji,
In case you want to stick to two PSUs - BHEL, and BEL, thats fine...I was trying to broaden the discussion to a slightly more macro level..
With BHEL, I dont think the case even exists...Here is a firm that has perpetually lived on imported tech, and not surprisingly is today scrounging around for the next gen....You can ascribe any reason to it - govt ownership et al..But the fact of the matter is that BHEL, having grown from a 10 million dollar company to a 6 billion dollar company (primarily on the back of mandated govt contracts), still does not have a clue on how to manufacture the current generation of its "core" tech....In light of our discussion, I spoke to an ex-Director of BHEL (in BRF terms, "uncle/paanwallah" sources
) who retired recently..He identified lack of tech as the key challenge for BHEL..And was quite contemptuous of the "R&D" carried out by BHEL, saying its nothing more than "retooling", as he put it...Mind you, he isnt a cynic - he is otherwise quite proud of BHEL's accomplishments...
Dear Somnath-ji, I regretfully will have to pass on all your paan-wallah sources I am afraid. On the one hand you resort to paan-wallah sources & then even mention products and core technology, when in the prior discussion viz BEL, you disregard all the systems and platforms in discussion, as "selective"..
Whats even more amusing is the fact that you entirely choose to overlook why the Navy asked for BHEL to fabricate the guns in question, as that is their primary concern and drove it to such a tangent!
With such being the case, how in anyones name, could I even hope to meet your panwaalah inspired understanding of the situation, which you will then tailor upto a "macro level view" with "numbers"..
I am not, not at all...R&D is one of the elements of success..the limited point is for technology-intensive sectors, it is probably the single-most improtant variable...GM's failure had its origins in different factors - full enumeration will derail this discussion - suffice to say that failure to predict the market preferences (concentrating on SUVs when the market was moving to fuel efficeint cars) and a pension problem were teh big straws...
So far you drove Capex and R&D as the defining factors of what a company is worth in terms of capability, whereas they are just a couple of the many parameters folks consider to get a holistic view of a company. As matter of fact, AWST, which is by far recognised as a leading industry tracker, does not even evaluate these two criteria in its assessment of performance!
When a clear example is shown here of how flawed your thesis is viz a company, namely GM, which has consistently spent on Capex and R&D - and to what end, you promptly change tack.
Sorry Somnath-ji, but these argumentative tactics dont fly.
R&D intensity is key, and "smaller" companies in a tech-intensive sector will typically have greater R&D intensity...Beyond a point of course, markets, affordaibility etc become key...Tata Motors have similar capex intensity as Ford Motors, even if the difference in size defines a lower amount..(But even there, notice how Tata Motors is defining its capex plans for the next 5 years, while Ford is simply talking about the next year)...And it shows, Tatas have in the last 5 years, come out with two game-changing designs - Nano and (the less heralded) Ace - global majors are scrambling to emulate that now!
With all due respect sir, this discussion is getting farcical, even more than it already is.
The first thing about any sort of evaluation is to observe the issue objectively. You are comparing TATA Motors to Ford drawing conclusions in a fashion using criteria which nobody serious would touch with a barge pole. If defining Capex plans for the next five or ten years was the criteria for "game changing designs", then there are a hundred firms out there who come up with all sorts of numbers and projections, and end up as loss making enterprises within half that time.
The point was and is very simple. Bereft of jargon ("R&D intensity, capex intensity") expressed simply.
A company which understands its market, operates in a fashion which is fiscally prudent, and is able to capitalize on its opportunities is well regarded by its peers. BEL is one such firm. Its product development and constant rate of introductions bears it out.
But you have chosen to disregard this, because it blows a huge hole in your claims.
Well, compare like-to-like....Compare BEL - an R&D intensity of <5%, compared to 9% of Elbit (which is 2.5 times bigger BTW)...Results therefore are clear..BEL has nothing to offer that is game-changing - no one's emulating BEL, but ELBIT/Elisra is a partner of choice!
As has been pointed out several times to you before, the ELBIT comparison is flawed as Elbit has to pay for its entire set up. Whereas BEL has the advantage of its strong tieup with DRDO of which it sources almost 20-30% of its product line, and costs per se are also lower in India. As to nobody emulating BEL, what exactly is that supposed to mean? Is DRDO in its quest for high technology running only after ELBIT or ELISRA, or cooperating with BEL? And kindly lets not get into some google fu about the LCA and ELISRA or the like. A certain report on the net about some Maya or whatever, was worth a good laugh.
The problem is sir, you have no interest whatsoever, about specific products, technologies. Your only interest at this point is is in winning an argument on the internet (which I sincerely regret having got into), irrespective of the facts at hand.
That you merely do a R&D by % comparison and did not even evaluate a product portfolio of the company in question and how it operates, speaks volumes about the approach taken.
Another of BEL's "indigeneous" efforts..this time in NVDs...
http://ajaishukla.blogspot.com/2007/04/ ... escue.html
Colonel HS Shankar, who was the Chairman of BELOP from 1997-2003, admits that BELOP made no effort was made to improve its NVDs but blames that on BEL’s disinterest in funding R&D.
BEL and the Ordnance Factories formed a JV called BELOP, purchased NVD technology from Delft, a Dutch defence major, and churned out thousands of 2nd Generation (Gen-2) NVDs that became quickly outdated.
The defence R&D and production establishment (the DRDO, 40 ordinance factories and 8 Defence PSUs) have always touted transfer of technology (ToT) as the first step to indigenous development. But without any R&D by BELOP to improve their NVDs beyond Delft’s Gen-2 technology, the militants soon had a qualitative edge in NVDs.
But the MoD asked BEL no hard questions about R&D. Instead, encouraged by BEL, the MoD initiated in 2005 a new initiative to procure state-of-the-art NVDs, which had by then improved from Gen-2 to SuperGen and HyperGen
Again as you see, Gen 2 tech imported, "license producced", and when it came to the next gen guess what, import again? In the meanwhile, I am sure the incremental tinkering with the gen 2 NVD is marked as "indigeneous R&D"!!
Yes, more google fu from your end, quoting a report by Ajai Shukla but no details on your own end.
For your information, BEL HQ asked for more funds to do R&D on & improve on Image Intensifying Tubes way back in early 2000's. It was well reported at that time itself.
Among other things asked for and proposed in the years thereafter, were funding for CCD sensor technology and other items to complement the work on IIT.
The MOD sat on those proposals. The answer given then which was the basis of debate, and given today, is that the amount of money required to develop these items inhouse, and then set up a manufacturing unit, would not break even given the pace of change in the industry, and that the Army would not procure Gen3 IIT for more than a few formations at most! This is the same approach as was taken with procurement of HHTI! From the Army's POV why would they ever acquire systems in bulk which are liable to be obsolete by the time a decade long production run ends!
Furthermore, as I recall, most proposals in that period, also ran into heavy weather because of post Pokhran sanctions, which rendered any attempts to acquire off the shelf basic manufacturing capability to even extend the R&D to product, unviable.
The IIT issue was then refloated in 2005 when BEL made a formal proposal to acquire the tech, did anything happen thereafter? No.
As of 2009, given the funding involved, AFAIK, the proposals have STILL not gone anywhere. So while Ajai Shukla does a good job of raising one's ire over dastardly BEL..he doesnt quite address the entire topic.
Which is namely that no private firm has the capability or has even come up with a proposal to develop Gen3 IIT tech either vis a vis BEL.
All everyone is cribbing about is why BEL should get the tech and leave them out of the lucrative pie, which they could get via importing Gen3 tubes from aboard, integrating them into soldier sights and selling them to the Army..
All in all, this yet another case of taking an article, not validating what was reported in it (and which competing manufacturer provided the "data" on this article is clear) and taking it as gospel.
None of this is classified. Its all known to folks who track the industry, yet..
I reiterate, as you say, govt ownership might be the crux of the problem...But then, there is a problem! And that needs to be critiqued!
Sorry, but if your critiques were on the basis of facts on the ground as compared to %, division stuff, I'd take them with far more credence.
But this, to me is the most disengenuous..So are you saying license manufatcured products from HAL are "cheaper", hence resulting in lower margins? Evidence doesnt suggest so - Su30MKI manufactured by HAL is mroe expensive than the one imported from Irkutsk - IAF has said this many times...And the idea was to "gauge" the value addition in technical terms made by the license mannufacturing process..If about 98% of the value of sales is going in salaries and raw materials (largely imported), the vendor is obviously not adding much value to the process! Especially if its finished product is not cheaper in "mandate"..
This claim by you only demonstrates how out of your depth you are sir, with respect to the topic at hand. That you state it as disingenuous only adds to the point.
For your kind consideration, the original costing as prepared by HAL for the Su-30 MKI project (project, not aircraft) was based on a production run till 2018. The IAF then saw its MMRCA plans going nowhere and asked for a 4 year shortening in terms of program times and compressed delivery by all and every means necessary.
In which case, the entire program was redrawn and Phase 1, 2, 3 production lines were extended and Phase 4 (production from raw materials in India) was shortened. Phases 1, 2 were extended viz 3. This meant that the number of items supplied by the original OEM & SKD would also rise, resulting in a cost increase.
Furthermore, the overall program costs to set up infrastructure in India were also increased, as the timelines were compressed by 4 years.
Apart from these, the IAF also asked that additional items would be integrated into the Su-30 MKI airframe by HAL itself, which were originally procured off the shelf separately as CFE- Customer Furnished Equipment, and would now come as part of the aircraft itself. HAL then had to include the costs for making these items inhouse as well. These include items procured from both Israel and France, but which are now license manufactured by HAL.
Considering all these, the cost of the HAL supplied Phase 3 airframe obtained by getting a project to unit cost, was now
projected to be above the cost of original airframes supplied by Irkut. This ad hoc planning was criticized by the CAG, which pointed to the manner in which the production run was compressed raising costs! Never mind, that the CAG itself didnt bother too much about what drove the IAF to do what it did and as such HALs response!
After all this, and much hype over the matter, when the IAF approached Irkut for additional aircraft to be supplied, the price was hiked to new levels, showing how much the original cost comparison was worth by itself. The Russians not only cited rising raw material prices, but the deal also ended up violating the mandatory offset policy. Today, for a final batch of 42 Su-30 MKIs, the cost is yet again under negotiation, and again will be nowhere near what the original Phase1-3 Su-30 MKis cost us.
Furthermore, the MODs considered decision to set up production in India was based on two points both of which are valid
- One was the long term sustainment of the massive Su-30 MKI fleet, which is being done by HAL as it manufactures the majority of precision manufactured, and finished LRUs, and the MKI license gives us rights to source raw material locally as well, and
Secondly, it was the constant modification and upgrade of the MKI fleet done inhouse, for both operational sovereignty and cost reasons.
Which has also been achieved with the creation of dedicated avionics rigs by HAL and industry, that allow for third party equipment such as new munitions and avionics to be integrated on the MKI. This has also been done nonstop over the past few years, with more systems being added to our MKIs using HAL resources instead of running back to Irkut each time around.
So basically, your reliance on half baked media reports was incorrect.
So I dont know what else to judge DPSUs with..Inability to produce the next gen, or even at least current gen grounds up...Inability to provide any "break through tech" to the world..Inability to even be an efficient "assembly line screw driver"....In between this, you will (and have already) point out instances of successes, qualifications on failures etc - but this is the macro picture...
As things stand, a DPSU such as BEL has a track record of successfully working with DRDO and other partners to come out with iterative products each of which is a substantial improvement on the prior.
And as things stand with HAL, despite OEM issues has delivered on two huge upgrade programs with little-no involvement from the OAMs, purely relying on own resources and those of its partners such as DRDO and pvt industry, and is currently executing a massive production run of a fighter which is a massive jump over anything it has handled before, and to IAF satisfaction.
Furthermore, HAL's plans in setting up and executing on substantial R&D programs including a new focus on integrated avionics are also well known. Their value to the MOD is hence, increasing.
Hence, your so called macro picture, relying on dodgy extrapolation is nothing but wrong, sir.
^^^ The American system is arguably the "best"..It has all programmes being competitively bid for by multiple vendors at the R&D stage itself - and the "best option" wins the manufacturing mandate at the end...Now it is neither feasible (to be funding two/multiple separate R&D efforts for the same project) nor required (given that most of our requirements do not aim to push the "knowledge frontier", its only reiventing wheels) in India's context...
With all due respect sir, you have really shot yourself in the foot here as well.
The so called American system moves all the responsibilities of a state mandated and run defence production center to corresponding private units which are now deemed national assets and "too big to fail". They operate as monopolies, routinely miss time and cost targets, and have flubbed up on programs to such an extent that the Nunn Mc Curdy legislation had to be enacted to basically provide some semblance of program ownership. Even that has not worked, with multiple programs running into trouble.
As things stand, no country has the claim to be the best or even have a "best" operating model. Each nations procurement procedures are a mix of archaic and current procedures and are consistent around protecting its domestic defence industry, ergo built around maximizing the competitive potential of it's firms abroad while keeping the local market, as much as possible for local firms. This is the reality.
But at some stage, for a vast majority of equipment, companies (DPSUs, pvt sector and foreign) should be developing, collaborating and manufacturing the products..DRDO should be ideally concentrating at the really strategic ed of the spectrum - baillistic/cruise missiles, BMD and the like, where there are unknown frontiers to be conquered, as no country will willingly
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Dear sir, this strategic versus tactical is a load of bunkum which only serves those interests who would rather DRDO did not exist, and let the entire tactical systems market open up to them. Programs like the LCA, Akash, Nag, are laying the groundwork for systems and technologies that are in no established players interest, for India to have or possess.
No strategic system today would exist if there were not corresponding investments made in tactical systems! This is something that was very well realised by those who set up restrictive setups such as the MTCR, closely followed DRDO's progress and did their utmost (and almost succeeded) in stymie-ing our strategic and tactical programs.
Today, DRDO's successes in ABM tech stem directly from its work on the Akash SAM C3I and radar technology. Its work on launchers is influenced directly by its work on the Pinaka, Prithvi. Its Brahmos SSM directly draws technology developed for the IGMP.
Net, all this talk of strategic versus tactical is all hokey.
Now sir, I must withdraw from this farcical debate which is more and more becoming an exercise on drawing "macro" linkages from the most dubious of data and without any serious interest in it..
I have better things to waste my time on than rebut or issue "rejoinders" to claims that have no end in sight, and new %/division will be trotted out as proof..
Furthermore, I must compliment you for your polymath skills, plus your persistence in employing these skills.
It is clearly an advantage that you possess that I lack, and cannot even aspire to meet! Why, in the ABM thread, you are debating with authority on ABM systems including the confidence that its not really worthwhile. In the Armoured Vehicle Thread you are a near authority on Cold Start and with a few lines dismissed on occasion, what Rohitvats says about the current Orbat/tasking of IA formations and now here, you have a macro understanding of the topic and dismiss everything else..
This thread..which was a worthwhile exercise in seeing actual programs/projects as "selective" as they were is now quite "conceptual" as well.
With that, I'll leave this thread and forum to your tender ministrations while I stick to my plebe understanding vis a vis actual firms and their achievements in terms of products, platforms and technologies..it is'nt "macro" or "conceptual"..but it works well enough for me ..
