Modi govt clears private sector entry into military transport aircraft project

Signaling the end of defence PSU Hindustan Aeronautics' monopoly in the domestic aerospace arena, the Modi government on Saturday gave the formal nod for the Indian private sector to tie up with a foreign collaborator to supply 56 transport aircraft to the IAF.

TOI on Wednesday had reported that the defence acquisitions council (DAC), chaired by defence minister Arun Jaitley, would clear the proposed Rs 13,000 crore project in its meeting on Saturday.

The project had been put on hold by the previous UPA regime after the then heavy industries & public enterprises minister Praful Patel and the strong PSU lobby in October 2013 had vehemently opposed the move to virtually keep state-run units like HAL and BEML out of the mega programme.

But brushing all this aside, Jaitley on Saturday said the project, under which the selected foreign aviation company will partner with an Indian Production Agency (IPA), would help make the Indian private sector "a player" in aircraft-manufacturing and lead to "capacity-building" domestically.

The DAC, attended by the three Service chiefs, defence secretary, DRDO chief and others, on Saturday also cleared other proposals worth over s 21,000 crore. This included five fleet support ships for Navy (Rs 9,000 crore), five offshore patrol vessels (Rs 2,000 crore) and five fast patrol vessels (Rs 360 crore) for Coast Guard, all of which will be constructed in domestic shipyards.The meeting also cleared acquisition of 32 indigenous Dhruv advanced light helicopters for the Navy and Coast Guard at a cost of Rs 7,000 crore from HAL, which will include maintenance, as well as search-and-rescue equipment worth Rs 900 crore for the armed forces.

But the clear take-away was the transport aircraft project. Under it, the first 16 aircraft will be bought from the foreign OEM (original equipment manufacturer), while the rest 40 will be manufactured by the IPA to replace the ageing Avro fleet of IAFThe tender or RFP (request for proposal) has been issued to over 10 global aviation majors like Embraer, Lockheed Martin, Airbus, Ilyushin, Casa, Saab, Alenia Aeronautica and STE Ukraine, who have to choose their IPAs based on qualification criteria stipulated in the tender. The bid submission date has now been extended to August 28.

Indian companies like the Tatas, Reliance, Mahindra and L&T, incidentally, have long been eager to join the aviation sector. There has been some concern over the project's financial viability but MoD officials say the selected IPA could go on to manufacture the aircraft for the civil aviation sector as well after fulfilling IAF's requirement.

HAL, on its part, has an overflowing order book with several production lines in operation currently. These range from production of Sukhoi-30MKI fighters, Tejas light combat aircraft and upgrades of MiG-29s and Mirage-2000s as well as proposed ones like the almost $20 billion MMRCA (medium multi-role combat aircraft) project to acquire 126 Rafale jets.


Times of india