New Delhi: The nearly $3 billion deal for Naval Utility Helicopter (NUH) could become the first challenge for the Narendra Modi government under the new ‘atmanirbhar’ initiative in the defence sector.
This is because the state-run Hindustan Aeronautics Limited (HAL) is pushing for its inclusion in the programme. The initiative is being pursued under a strategic partnership model focused on the Indian private industry meeting manufacturing needs through tie-ups with foreign vendors.
The Indian Navy, though, is worried that the whole programme will be delayed if HAL is brought in, which the Bengaluru-based firm denies. The Navy has been desperate to replace its Chetak of 1960s vintage with NUH.
The NUHs are to be utilised for multiple roles, including search and rescue, casualty evacuation and low-intensity maritime operations, besides torpedo drops.
The Navy had received eight responses to the Expression of Interest (EOI) issued in February last year as part of its plan to purchase 111 helicopters for Rs 21,738 crore.
HAL had submitted two bids at the time, one by itself and another through its joint venture with Russian Helicopters to produce the Kamov chopper, a Russian utility chopper.
Apart from the Navy, other private players have also objected to HAL’s inclusion.
The Ministry of Defence is yet to clear the file for issuance of Request for Proposal (RFP) for selected vendors and may take a fresh look at the proposal to include HAL.
Defence sources said that the Defence Acquisition Council (DAC) had already considered the participation of HAL when it decided on pursuing the project through the strategic partnership (SP) model.
“Discussion in 2018 DAC for AoN (Acceptance of Necessity) regarding inclusion of HAL and then DAC directive to progress through SP model indicates that HAL is not to be included,” a source said.
HAL says it has the tech but Navy needs to be clear
Speaking to ThePrint, Wing Commander Unni Pillai (Retd), executive director (CTP-RW) at HAL said, “The essence of SP Model is to bring in technology into the country that we don’t possess.”
He added that the transfer of technology (ToT) in the heavier weight lift class makes sense because HAL is still trying to design one.
“But getting something, which is in the same weight class as ALH (Advanced Light Helicopter), it does not make sense. Whatever they (Navy) are trying to get in is 1970 design,” he added.
He argued that the foreign chopper “the same configuration as the ALH” will be nearly Rs 10-15 crore more.
“And then what happens is that the actual expenditure comes in every 5-7 years when the aircraft requires upgrades, including when new systems have to be put. And that is when the foreigners start bleeding us … we will keep paying money to people,” he said.
The senior HAL official said “Atmanirbarta will never happen” if we depend on imports.
“If we have a design and needs to be done up to somebody’s requirement, the two parties need to sit together. The Navy has never engaged HAL in what exactly they want. Initially, in the 1990s, they wanted a replacement for Seaking (helicopter) which is a 10-tonne class. They wanted all the equipment to be fitted on an ALH, which is a 5-and-half-tonne class. This is not possible.
“So now, what they want is a smaller utility class helicopter which is a five tonne class. We have something in that class. Whatever adaptation needs to be done will be done,” he said.
Pillai underlined that the HAL’s chopper meets the Navy’s requirement. On the issue of folding blades, a requirement for Naval operations, he said HAL has segmented the blade.
“There are two bolts there. You remove one and it can be folded. It takes about six minutes to fold on the LUH (Light Utility Helicopter). On the ALH, we are planning to incorporate the same which we would be able to do at the same time,” he said.
Asked about fears that HAL will not be able to deliver on time even if it is able to meet all requirements, he points to its performance in the last five years to say the state-run firm has delivered ahead of time.
“In ALH for example, the Army had placed an order and we delivered one year in advance. We are capable of delivering in advance,” he said.
Navy’s HAL problem
Defence sources told ThePrint that if HAL is included, it will erode the level playing field for private players since it already has government-funded infrastructure, which cross subsidises Transfer of Technology and indigenous content.
According to provisions in the Defence Procurement Procedure (DPP), HAL cannot be included at this stage since the process has already begun.
“If HAL has to be included, then DPP has to be modified and ratified by DAC followed by issuance of fresh Request for EOIs to OEMs (original equipment manufacturers) and SPs,” the source explained.
As of today, the private companies have got a miniscule percentage of the overall orders to Indian companies placed by the Navy.
According to official statistics, since 2014, almost 95 per cent of the orders to Indian companies have gone to Defence Public Sector Undertakings and Public Sector Undertakings. HAL has an order book of approximately Rs 1 lakh crore, including that of Light Combat Aircraft.
Navy sources said that HAL was provided naval requirements from as early as 1990 to make a helicopter, but till date, the helicopter cannot meet requirements of the Navy.
“HAL will take another two years to meet blade folding capability. If at this stage HAL is included, the process will come to a halt as the Empowered Project Committee cannot clear ALH as a platform since it does not meet the quality requirements,” another source explained.
The source added that a higher body like DAC will have to accord this dispensation.
“However, if this is accorded, then other helicopters will also be added in the fray. The whole process would need to be recommenced, delaying the project further while diluting the operational functionality of the NUH,” the source said.
Air Vice Marshal Manmohan Bahadur (Retd) said all platforms have to meet the Navy’s requirement for it to be considered. Automatic blade folding is an essential necessity which naval helicopters require since they operate from decks of ships.
“Also, HAL order books are loaded. The whole idea of strategic partnership is to allow Indian private industry to come forward and provide the services with an alternative R&D (research and development) and manufacturing line. This would help bring in real indigenisation that every government has been wanting to usher in,” he added.