Just as Indian Navy reached the threshold of opening doors to private sector participation in indigenous helicopter manufacturing, a series of seemingly unconnected high-level interventions and policy announcements have turned the spotlight back on the Indian Navy’s Naval Utility Helicopter (NUH) project.
In a sudden turn of events nobody foresaw, novel initiatives from the incumbent government came up against the Novel Coronavirus-19 (COVID-19) pandemic. A global recession stares us in the face. Shrunk defence budgets are a grim reality now for the foreseeable future.
The Indian Chief of Defence Staff (CDS) Gen Bipin Rawat was quoted saying “the Indian Armed Forces must not go in for large amounts of imports by misrepresenting our operational requirements”. Prime Minister Narendra Modi addressed India on May 12, 2020 on COVID-19 with a forceful plea to make India atma nirbhar or self-reliant. Following PM Modi’s speech, Finance Minister Nirmala Seetharaman unveiled a slew of ‘big-bang’ reforms, some of which will shape the future of ‘Make in India’ for defence.
In policy matters, two-plus-two don’t always add up to four. Public pronouncements at high level can have intended and unintended consequences. Recent news reports indicate that “companies have been asked to explain if the (NUH) programme has export potential”. The government may also consider giving defence PSU Hindustan Aeronautics Limited (HAL) a chance to enter the NUH competition.
Whither Strategic Partnership?
The Strategic Partnership (SP) model was introduced by Indian MoD as Chapter VII in DPP 2016 based on recommendations put up by the Shri Dhirendra Singh Expert Committee. The objective of SP was to create capabilities in the private sector for manufacturing key defence technologies. Military helicopters was identified as one of them. This was in addition to the already well-established capabilities of DPSU and Ordnance Factory Board (OFB). Capacity building, more players in the market, wider choices, healthy competition, potential to make and export – the possibilities are immense. The user (services), in turn, would stand to reap rich harvests from the new paradigm.
Imagine USA or Europe where aerospace & defence (A&D) majors like Lockheed Martin, Boeing, Bell Flight, Leonardo, Northrop Grumman, etc. (with a thriving ecosystem of smaller private sub-contractors) compete head to head for every slice of the defence pie. Now look around Indian DPSUs and OFBs. Organisationally, culturally and functionally, they resemble relics from an era gone by. In the 21st Century, we still do not manufacture here in India a helicopter (or modern fighter) that is globally accepted or even considered fair competition.
SP’s First-born – Naval Utility Helicopter
IN’s Naval Utility Helicopter (NUH) program became one of the first projects allotted to SP. It’s not as if the navy is an ideal candidate for such experiments. Quite the obverse, actually. The IN has barely enough helicopters to retain self-respect. Yet, to its credit, IN took the lead; with hope that the long-standing capability void left behind by HAL’s ALH Dhruv would get filled. This also aligned with progressive government policy.
The Department of Defence Production (DDP) that is responsible for all DPSUs and OFBs recently questioned the very basis for allotting NUH under SP. Through a series of letters drafted by their consultant early this year, DDP argued that since HAL-designed ALH meets all naval requirements, it should be the obvious choice for NUH under IDDM – ‘Indigenously Designed Developed and Manufactured’ category. In the least, MoD should issue the NUH Request for Proposal (RfP) to HAL as well, they contended. HAL has been quoted that they are “generally in agreement” with the consultant’s views.
A system fine-tuned to reward DPSUs?
Whether this is part of a larger canvas for self-reliance and nation-building, or lobbying by HAL to get ‘foot in the door’ at a critical stage of the NUH-SP program, we may never know. But it is neither unique nor surprising. Not a single case for defence equipment moved by any service can see the light of day without DDP and its cohorts drawing blood. Many cases reach fruition through them, some despite them. Many flounder due enforced U-turns the services had no way of countering except file notings opaque to the world.
In this regard, naval aviation remains one of the biggest losers among all three services. The IAF managed to induct many medium lift helicopters, Apaches & Chinooks, even as they kept HAL’s order books busy with the ALH. For the Indian Army that grew up on Cheetahs and Chetaks, the ALH Mk III or Rudra is manna from heaven. They invested in the ALH in a big way, learning many lessons along the way. In last two decades, all that the navy has inducted in rotary wing are eight shore-based ALH, six UH-3H resurrected from a boneyard in USA, and a handful of AEW KM-31 bought from Russia.
Key decisions lined-up ahead
Recent reports in media would have us believe that IN’s entire exercise of building a case for NUH – starting from 2008 when the specifications were first written – was to walk into the arms of foreign vendors or flush foreign exchange down the drain. If such views are considered on merit, it raises some interesting questions.
Firstly, why did the NUH – a government-approved Strategic Partnership (SP) program under PM Narendra Modi’s flagship ‘Make in India’ banner – ever get MoD approval in the first place, that too for the navy which faces the most acute shortfall in helicopters? Secondly, why did HAL wake up in the 21st Century to offer the same product (Dhruv) that forced IN to look for other options because it failed to meet their expectations in the last century?
The naval scope creep that saw NUH specifications inflate from 4.5-tons to 5-tons maximum takeoff weight (MTOW), thereby bringing it closer to ALH (5.5-ton MTOW), drew more competitors, including HAL, into the fray. Fear of losing out on a INR 21738 Cr deal ($3bn), missed opportunities, and a lacklustre naval order book could be contributory factors for intervention by HAL/DDP.
A time-tested strategy
This strategy of waiting in the wings, using formal and informal access to corridors of power, exploiting benevolence of policymakers, defending critical gaps in quality or low productivity with futuristic promises, toying around ad-infinitum with ‘children of monopoly’ that derail or fall short of the services’ expectations, and then – at crucial decision points such as this – jumping to throw a spanner into the works, this is a time-tested, low-cost option often exercised by DPSUs and DRDO laboratories.
In the absence of credible competition from the private sector, this has spelt doom and run aground many projects the three services formulated with great enthusiasm. Vested interests often betray an elephantine yet selective memory that play-up, very conveniently, only one side of the story. How soon we forget past pain and expensive lessons!
Customer is king or customer is kind?
India would not be one of the world’s largest importer of arms if the DPSUs and OFBs were a hallmark of efficiency. Unlike shipbuilding, where many shipyards and PSUs compete with each other, in aerospace, HAL wields complete monopoly in India.
To be sure, the ALH is yet to meet its own 35 year-old naval staff qualitative requirements (NSQRs) in key areas such as range and endurance, blade folding, stowed dimensions, aircraft availability and serviceability. These are non-negotiable specifications for helicopters that operate for extended duration at sea. The navy did not stumble upon this non-compliance yesterday or in last Aero India air show. This has been the case from the time the Dhruv first took to sea. Even today, the naval ALH is not a platform of choice for a naval warship proceeding out of harbour.
The navy’s 2-decade indulgence with naval Dhruv has left it with a product whose manufacturer claims today that a new blade fold solution will be fielded soon. This after three decades of dealing with NSQRs. What couldn’t be achieved over 30 years is now proposed to be made ready in months. A segmented-blade proposal flying on the Light Utility Helicopter (LUH) and a mock-up of tail boom folding showcased during Aero India 2019 are the latest offerings. None of this has been flight tested or proven on the machine. If mock-ups and promises could fly, we would’ve had a fleet of Dhruvs occupying empty decks and cavernous hangars on every other IN warship’s deck.
A grim caution
Looking through this chimera, I feel, we may be about to repeat old mistakes.
Firstly, all promises and timelines quoted by DPSUs must be treated with deep circumspection. This is a system plagued with “caveat emptor” or “buyers beware”, a nebulous sense of purpose, and no meaningful competition. Nobody is accountable to draw tough red lines or admit ‘it cannot be done’. It is just not there in our system. Services and HAL are equally complicit in this incest.
With the benefit of hindsight, even a layman could have predicted in early 90s that the NSQRs would be compromised in favour of IAF and army specs (and numbers) that drove the ALH program. But dissenting voices were either ignored or simply outrun with the sheer staying power of a government entity.
Such an outlook eventually breeds a complacent attitude, poor quality products and compromises on essential requirements. This takes nothing away from the capability of our workers, scientists, engineers or test crew. It is just the way any system would work in the total absence of competition. The SP model was meant to take this down by levelling the field for private industry.
Aircraft availability is a key metric for the navy where ALH has failed to impress. Low aircraft availability translates to higher maintenance reserve and high ground time a seagoing force can ill-afford. HAL’s repeated efforts to sell ALH to civil operators bears testimony to its commercial viability. To date, all exports of the ALH have been unsuccessful.
Any arguments on the lines of ‘ALH is the cheaper option’ should be weighed against cost of product development and testing. If all the naval manhours, ships, submarines and consorts, opportunity costs, grounded helicopters, capability gaps because of undelivered promises, operational logistics, etc. are accounted & costed for, an alarming figure will emerge. This is true for products from most DRDO laboratories and DPSUs.
For example, costs associated with testing sensors for hundreds of hours, with consort ships (120+ uniformed souls onboard) standing by, shore bases activated, submarines deployed for months – all this must be factored against projected lower costs of products from the DPSU stable.
Any arguments on saving foreign exchange by buying local should also take into account realistic estimate of indigenisation achieved on the ALH. Then again, selling these machines to a local, captive audience simply circulates money within different government departments. Why not set the bar higher, make local and export globally, thereby drawing foreign exchange into government coffers?
Redefining indigenisation from a public-private perspective
Indigenisation needs to be redefined from a private-public, collaborative, win-win perspective. It doesn’t have to mean everything made in India. An aeroplane or aero engine is more than the sum of its parts. Today, we have a unique chance to walk the talk by engaging with private sector in defence by placing orders, not sloganeering.
It is 2020. The IN still doesn’t have an indigenous helicopter with seamless interface across all decks – one that sets a benchmark for navies worldwide. We have the unique opportunity today to infuse fresh blood into a languid system by tapping private sector resources. At this crucial juncture, IN must stay the course and the MoD must give private players a fair chance. HAL had more than their say and opportunities for over three decades. That did not get IN the capability it needs as of yesterday. To me, this displays indifference and lack of understanding on what actually constitutes a world-class naval helicopter.
The IN needs real capability; one that brooks no concessions. We need helicopters that can remain at sea without cringing or making the crew cringe; without having to break parts; without having to burn holes into hangar bulkheads. To HAL’s credit, it still has order books brimming with ALH & its derivatives, a fair chance with the Ka-226T offered through Indo-Russian Helicopters Ltd (a JV of HAL & Russian Helicopters) and also the prospect of supporting strategic partners and MSMEs by becoming a Tier-2 supplier under the NUH-SP program. Then there is the Indian MRH / Naval MRH. I see a win-win situation for all sides, including HAL, if we are able to make SP model work and create synergies to manufacture world-class helicopters, not only for India but for the world.
If there is anything HAL needs most today, it is competition, not orders on a platter.
Inducting machines in the 21st Century that give a net endurance of 30 minutes with dunking sonar and lightweight torpedo proves only one thing – we learnt NOTHING from the naval ALH experience.
The MoD must take some tough decisions. Naval requirements are unique and demand a product designed from the sea level up. Through private industry participation in defence manufacturing we must aim to achieve parity with countries like USA and China, even Japan, that have harnessed the power of collaboration with clearly defined (& delivered) outcomes.
The ALH is a wonderful machine. Indian Navy’s two decade ‘social distancing’ from this helicopter was not out of any bias, but out of fundamental incompatibilities. The lessons from this experience must shape our decisions for the future.
HAL can be a friend, philosopher and guide to the nascent Indian rotary industry. The rising tide of “atma nirbharta (self-reliance) must lift all boats.
This article was first published by The Times of India on May 18, 2020 as an opinion piece. A research paper on ‘The Naval ALH Story’ by this author is currently under peer review.
©KP Sanjeev Kumar, 2020. All rights reserved. Please do not copy-paste or republish without express consent. I can be reached at firstname.lastname@example.org or on my Twitter handle @realkaypius. Views are personal. Cover photo courtesy Indian Navy.