HAL: THE PERFORMANCE DEBATE

On 23 December 1940, the Walchand Hirachand group established Hindustan Aircraft Limited as a defence company to manufacture aircraft in India. The British government bought a one-third stake in the company in 1941 and post independence, in 1951, HAL was placed under the Ministry of Defence. In October 1962, Hindustan Aircraft Limited was amalgamated with Aeronautics India Limited (AIL) that was wholly owned by the government to manufacture the MiG-21 aircraft under licence and the company was renamed Hindustan Aeronautics Limited. As an interesting facet of history, the Maharaja of Mysore, Krishnaraja Wadiyar IV and his successor Jayachamaraja Wadiyar offered 700 acres of land free of cost for the facility and also provided water and electricity at a concession. The MoD thereafter established HAL as the main defence manufacturer of the country and a significant amount of resources were put into it. Logically, it should have propelled India into the select league of nations which manufacture quality fighter aircraft. That this has still not happened reflects to a large extent on the institutional infirmities, political shenanigans and administrative sloth, since the founding of HAL.

But HAL has its supporters, and the reasons for its poor performance are thought to be related to factors outside HALs control. Writing on the subject, Ajai Shukla, a reputed columnist and a former army officer, posits that the Indian Air Force too must share much of the blame that is heaped on HAL. In an article published on 22 January 2019 (https://www.rediff.com/news/report/why-is-iaf-sitting-on-hals-tejas-proposal/20190122.htm), he makes the following points:

•The MoD approved the manufacture of 83 Tejas Mark 1A fighters in December 2017, but ten months down the line, HALs proposal to manufacture 83 Tejas Mark 1A fighters, which the MoD green-lighted in December 2017, has been pending with the IAF. With no clearance forthcoming from the IAF’s ‘technical evaluation committee’ (TEC), the project remains in limbo. HAL’s commercial bid remains unopened and an actual production order, at a price to be fixed by a ‘cost-negotiating committee,’ is nowhere in sight.

•This Tejas Mark 1A order worth Rs 50,000 crore in the estimation of Defence Minister Nirmala Sitharaman, constitutes half the orders worth Rs 100,000 crore that she stated were ‘in the pipeline’. The pipeline should have a clearly defined length. The Defence Procurement Procedure of 2016 (DPP-2016) requires the TEC to complete its evaluation in 10 weeks. It has already been with the IAF for 10 months. Contacted for comment, the IAF has not responded.

•This year, HAL’s Tejas integration line will deliver eight fighters, and will also ramp up production to 16 fighters a year. However, there are only 20 more Tejas Mark 1 fighters on order. That means, without the order for 83 Tejas Mark 1A aircraft, the line will grind to a halt in 2020. For now, HAL’s only hope is that prospective foreign customers, such as Malaysia, place orders for the Tejas, which would keep its production line going. The Royal Malaysian air force could buy up to 30 Tejas Mark 1 fighters.”We cannot afford Tejas production coming to a stop. Stop-and-start production has financial costs, and disrupts the supply chain. And delay raises labour costs and foreign exchange appreciation,” says Madhavan.

•The IAF counters that HAL is still to deliver two orders it has received for 20 fighters each. But, in fact, the order is only for 32 fighters, not 40.The remaining eight fighters are the twin-seat trainer variant, for which the IAF is still to issue the ‘air staff requirements’ (ASRs) — or the specifications to which they must be built. This delay is happening because, in 2016, the IAF suddenly demanded that its twin-seat trainers must also have mid-air-refuelling capability. This capability had earlier been decided for only the single-seat fighter, but was not required in the twin-seat trainers.The IAF’s change of mind involves significant re-engineering, since the long, drooping nose of the twin-seater presents additional challenges. HAL can start this development only when the IAF issues the ASRs for mid-air refuelling for the twin-seat variant. Thereafter, the development would take at least two years. Only then can the twin-seat Tejas— 8 trainers from the first order of 40 aircraft and 10 from the 83 Mark 1A order—enter production. Until then, only two Tejas trainers exist—prototypes built years ago. With no twin-seat trainers being built, there are serious problems in training Tejas pilots.Since the existing two twin-seaters are needed for the flight-test programme, rookie Tejas pilots must rely on mainly simulator training, rather than real flying.

By 31 March 2019, HAL will have for the first time achieved the production milestone of 8 fighters per year. The IAF charges HAL with having taken too long to reach this level of production. But the HAL chief ascribes that to the IAF constantly shifting goalposts. He said that Tejas production was cleared in 2013 but since hen the IAF has made over 300 changes to the fighter.

Shukla, quoting Bharat Karnad, pinned the blame on the IAF. “Ultimately, the blame lies with the IAF which has treated the Tejas project like a step child. The Tejas has grown in capability, but the IAF has preferred relying on foreign fighters like the Rafale”.

The IAF Response

The IAF is not amused by what it considers unfounded allegations made by HAL, which remains a monument of Nehruvian economy and a testament to its abject failure. It also has the dismal distinction of being one of the most inefficient defence manufacturers in the world. A number of serving and retired IAF officers have countered Shukla in his support of HAL and criticism of the IAF.

The IAF has rubbished HAL’s contention that it was waiting for a response from the IAF on its proposal to manufacture 83 Tejas Mark 1A aircraft which MoD green lighted in Dec 2017. The IAF stated that it had issued a single vendor tender to HAL, and the latter sent back its first commercial and technical response to it in March 2018. There were three major shortcomings in HAL’s response. One, HAL’s offer on price and other aspects was valid only for 12 months, whereas the procurement procedure required it to be minimum 18 months. Two, the delivery time offered by HAL was not deemed acceptable and three, the aircraft range and the endurance levels were not in compliance with the requirements. Endurance level pertains to the amount of time an aircraft can be in the air. The IAF officials told HAL to rectify the issues in the proposal and send a revised response. But non-compliance was also noted in HAL’s subsequent responses which were received in the second week of January 2019. The delivery schedule now proposed by HAL remains a non-compliance, for which the IAF is approaching the Defence Acquisition Council.

The charge that the IAF has not sent the Air Staff Requirements (ASR) for trainer aircraft is again patently false. The ASR envisaged a total requirement of 200 fighters and 20 trainer aircraft of LCA. The trainer variant of the LCA was to retain all attributes of the fighter variant except for the changes necessary to accommodate a second seat for imparting training to IAF pilots and was to enter IAF service by 1994 (The project started at the grass root level in 1983).

While reason for delay in trainer production has been attributed to ‘a sudden demand by IAF’ in 2016 for having mid air refuelling capacity in trainer similar to fighters, it is difficult to comprehend how an air force having mid air refuelling capacity in all its new age fighters as well as their trainers (that too upgraded/assembled at HAL like Su-30, Jaguar, MiG 29, Mirage 2000) will wake up after 20 years of passing its ASR to raise such a demand. The PAC has also paid put to this allegation by HAL. In its report, it has recorded that the trainer aircraft was a spinoff of the fighter variant. The critical system like avionics, flight control, sensors, propulsion system, etc were the same as the fighter aircraft. Hence, delays attributed in realising fighter aircraft had direct implication in achieving FOC of Trainer. Additionally the audit also pointed out that trainer variant as specified in ASR was yet to be handed over to IAF till January 2015, and resultantly, IAF would be constrained to induct fighter LCA without availability of trainer aircraft which would have adverse impact on pilot training.

The charge that the IAF constantly shifts goalposts is also not correct. Huge time delays in delivery of equipment result in major technological advances in the intervening period, making the manufacture of such aircraft infructuous. The LCA concept came in the year 1983 and was to have been inducted in the IAF by 1994. If HAL production schedule is delayed by decades, the technology by then has moved many steps forward. Such a requirement would not have arisen if HAL had stuck to its delivery schedule.

The Air Chief, ACM B.S. Dhanoa, too came down heavily on HAL. Speaking at the Centre for Air Power Studies, he made it clear that the IAF has not shifted any goalposts. On the contrary, the development by HAL has taken such an incredibly long time that armament and technology has gone obsolete, he said, adding, “…I as the service chief can make concessions to Hindustan Aeronautics Limited. Will the enemy make concessions to me when I go and meet the enemy? In combat, there is no silver medal. Either you win or you lose”. Speaking about such delays, the Air Chief said that HAL has delayed the upgradation of one squadron of Mirage-2000 jets, two squadrons of Su-30MKI and one squadron of Jaguars. The company has also delayed the production of Su-30 by more than two years and production of Light Combat Aircraft by more than six years he said, adding that emergency purchase of fighter aircrafts needs to be made from foreign defence manufacturers due to the inefficiency of HAL.

HAL still faces challenges with respect to the aero-engine to equip TEJAS and is also believed to be facing problems in the installation of the AESA radar due to differences in the size of housing cavity. In addition, there are a few issues related to cockpit specs. In addition, HAL still has to declare the final weapons suite that will go on board in an operational TEJAS. This, according to some analysts, is unlikely before 2025, which simply means that the combine of HAL/DRDO/ADA are not capable of delivering. The time has come to make all the MoD PSUs competitive, productive and efficient. To produce sub standard, incomplete war platforms with time and cost over runs, is a disservice to the nation. Let us also remember that among the top 25 defence contractors in the world, none is a public company. And HAL does not figure in that list. So, is privatisation the answer?

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