“I have just Rs 61,000 crore ($9.5 billion) of orders, including 35 Su-30 MKIs and 73 Dhruv ALHs. That is just three years work, at our current turnover of Rs 20,000 crore ($3.1 billion per year). What lies ahead for HAL’s 20 manufacturing divisions built on 12,000 acres of land, and 30,000 skilled employees? Over the years, the government has invested Rs 50,000 crore ($7.8 billion) in HAL,” says T Suvarna Raju, the company’s chairman and managing director.
This uncertainty is an operational concern for a company that needs to plan its production years in advance, including placing orders for “long lead items” on ancillary suppliers.
While there are prospects in the defence ministry pipeline, few concrete orders are at hand.
HAL once expected that the Nashik manufacturing division could, after delivering the last Su-30 MKI, be used for building the Indo-Russian Fifth Generation Fighter Aircraft (FGFA).
But New Delhi is dragging its feet in concluding a contract with Moscow, even after an okay from a defence ministry expert committee. The FGFA’s future and timelines are uncertain.
To keep the Nashik facility occupied, HAL hopes to overhaul the entire Su-30 MKI fleet there.
The fighter must be overhauled after completing 1,500 flying hours or 14 years in service, whichever comes first.
HAL once expected that the Nashik manufacturing division, after delivering the last Su-30 MKI, could be used for building the Indo-Russian Fifth Generation Fighter Aircraft
The IAF calculates that its fleet of 272 Su-30 MKIs would, at its peak, require 30 fighters to be overhauled each year.
It was planned that HAL Nashik would overhaul 20 fighters per year, while the IAF’s 11 Base Repair Depot, also located at Nashik, would overhaul the other 10.
“Now we are thinking differently. Rather than have HAL Nashik lying idle — with its 7,000 employees and 4,000 acres of real estate — we should enhance our capacity and overhaul all 30 Sukhois ourselves,” says Raju.
Overhauling a fighter involves stripping it to its bare bones, checking each system and sub-system, replacing worn-out components, and then reassembling the rejuvenated fighter.
Over each fighter’s total service life of 6,000 flying hours or 30-40 years, it would be overhauled thrice — adding up to 816 overhauls for the 272-strong Su-30 MKI fleet.
Doing this in India is significantly cheaper than flying each fighter to Russia.
Meanwhile, in Bengaluru, HAL is ramping up the production line for building the Tejas Mark-1 fighter, but has orders in hand for only 20 aircraft.
The defence ministry has cleared the purchase of another 83 Tejas Mark 1A, but an actual contract would most likely be years away.
Consequently, HAL is staking a claim to manufacture a “single-engine fighter”, for which the IAF has sent out “requests for information” (RFIs) to global vendors.
It is proposed that the selected fighter be built in India by a private Indian firm that the defence ministry nominates as a “strategic partner” for fighter aircraft. Lockheed Martin’s F-16 Block 70 and Saab’s Gripen E are considered frontrunners in this contest.
HAL’s Raju says: “It is hard to understand the logic of giving the ‘single engine fighter’ contract to a private sector ‘strategic partner’, when so much of HAL’s capacity will soon be lying idle.
Raju points out that the new policy on Strategic Partners (SP) requires the defence ministry to satisfy itself that the capacities of defence public sector undertakings are being adequately utilised before allocating production to a private sector strategic partner.
“I have just Rs 61,000 crore ($9.5 billion) of orders, including 35 Su-30 MKIs and 73 Dhruv ALHs. That is just three years work, at our current turnover of Rs 20,000 crore ($3.1 billion per year). What lies ahead for HAL’s 20 manufacturing divisions built on 12,000 acres of land, and 30,000 skilled employees? Over the years, the government has invested Rs 50,000 crore ($7.8 billion) in HAL”
T Suvarna Raju, Chairman and managing director, HAL
Both Lockheed Martin and Saab have tied up with private Indian firms to build their fighters in India, if it is chosen by the IAF. In June, Lockheed Martin and Tata Advanced Systems Ltd (TASL) announced a partnership to build the F-16 in India; while Saab has an unannounced agreement with the Adani group to build the Gripen E. Yet, sources confirm that both foreign vendors would much rather work with HAL, which has decades of experience in building combat aircraft.
In contrast, the Adani group has no experience in building even an aerospace grade component. TASL has recent experience in building aerospace assemblies under licence, but has never assembled an aircraft or designed a significant component or assembly.