Atlas Elektronik, which set up a
wholly-owned subsidiary in India in 2013, has won the two medium-sized
contracts within a year-and-a-half of re-entering the Indian defense
market.
Under the first contract signed
in July 2013, Atlas Elektronik will upgrade 64 SUT (surface and
underwater target) torpedoes for Indian Navy's four German-origin HDW
Shishumar-class submarines. Interestingly, upon upgrade, these torpedoes
can also be used on the six under-construction French-origin Scorpene
submarines, the first of which is scheduled for induction into the
Indian Navy in 2016. The entire delivery would be completed in 50 months
from contract inking.
Under the second contract, signed
in November 2014, Atlas Elektronik will directly supply six Active
Towed Array Sonars (ATAS) to the three Delhi-class destroyers and the
three Talwar-class warships. Further, the German company will help
Indian public sector Bharat Electronics Limited (BEL) to produce 10 of
the ATAS in India, "as the Indian Navy wanted to standardize its
anti-submarine capability."
These India-produced ATAS will
enhance the submarine detection capability of India's three each of
Kolkata-class and Shivalik-class, and four Kamorta class anti-submarine
corvettes. These warship projects are indigenous programs at Indian
shipyards.
India's Defense Minister Manohar
Parrikar had on Sep.30, 2015 commissioned INS Kochi, a stealth guided
missile destroyer, in Mumbai. INS Kochi is only the second of the three
Kolkata-class destroyers India is currently constructing. INS Kolkata
was commissioned into the Indian Navy by Prime Minister Narendra Modi in
August 2014. The third warship in this class is slated for
commissioning a year from now. The integration of the ATAS on the
already commissioned warships of these three classes as and when they
dock for scheduled refit and maintenance works.
"Toward array sonar can help the
warship see underwater over the horizon. It vastly increases the chances
of the warship detecting a submarine. In reality, submarine is a very
powerful weapon platform and stealth is its basic nature. The closer the
submarine is to the ship, the less time the ship has to do anything
about it.
"There is no point in having lots and
lots of ships that cannot detect submarines. These become sitting ducks.
So, the Navy has been cognizant of this fact and that's why they have
been pushing very hard to try and equip all the modern warships with
towed array sonars," said Atlas Elektronik India CEO Khalil Rahman in an
interview on Sep.29, 2015. None of these 16 Indian warships have the
ATAS or the capability to detect submarines over the horizon.
"Anti-submarine warfare is the
main pre-occupation in the Indian Ocean at the moment. India's neighbors
are all acquiring submarines and deploying in the Indian Ocean. China
have a lot of submarines and these have ventured into the Indian Ocean
region. Pakistan has submarines. Vietnam, Indonesia and Thailand are
getting submarines. Singapore, South Africa and Australia have
submarines. Basically, the Indian Ocean Region is becoming full of
submarines, leaving aside any U.S. activity and France maintaining a
submarine fleet here, being a littoral State. There is a lot of
submarine activity in the Indian Ocean now," Rahman said.
Atlas Elektronik is also
competing for the Indian Navy's projects for supplying anti-submarine
systems and torpedoes, such as the futuristic six-submarine Project 75I
program, the 16 shallow water craft program, the project for integrating
the IADS Anti-Submarine Warfare Suite for Project 15B and 17A, the 12
Mine Counter Measure Vessels that are to be built by Goa Shipyard, and
towed array sonars for the existing fleet of nine Kilo-class submarines.
Partnering Pipavav For Torpedo Manufacturing Base In India
Atlas Elektronik is also working
towards establishing a manufacturing base for its torpedoes in India,
ultimately through a joint venture, for which it has signed a Memorandum
of Understanding with Pipavav Defence and Offshore Engineering Company
(PDOC) that was earlier this year taken over by Anil Ambani's Reliance
Group. The MoU with Pipavav Defence and Offshore Engineering Company was
signed in February 2014.
"In the long run, we need to
partner with the Indian industry. The rules are such that Atlas
Elektronik cannot manufacture without a 49 per cent Joint Venture (JV),"
Rahman said.
"Up until now, most the projects
to which we have sold were to supply equipment directly from Germany.
But it is now clear, as some of the projects now are coming out to be
'Buy and Make India' category, particularly the new ones. In which case,
we need to partner to form a JV in order to participate. The problem
with many of these is what comes first - the JV or the order. There is
no point having a hollow shell JV until you have some business. Because
many of these big procurement progress at their own pace, it takes some
time to get an order to find a purpose for the JV.
"Nevertheless, especially in the
torpedo area, we have moved forward quite a lot with our partner, PDOC,
which has now been taken over by the Reliance Group. We are continuing
to work with PDOC. We spent a lot of time looking at the supply chain in
India. So, it is really to have an Indian project.
"It is not a question of finding
an integrator, who is able to import kits and assemble them in India.
That doesn't really transfer technology. What we need to do is to
develop a supply chain, so that the sub-components are built in India
and assembled together. This summer, our team from Germany came and
visited a number of companies in India - small and big and they were
very much impressed by the SMEs, particularly in South India. They found
that they were very good quality companies that were really well
qualified to fit into the supply chain, such that they could even be
considered as good enough to be qualified as part of the global supply
chain. So that's very encouraging.
"In the long run, it will have to
be a JV, for the torpedoes. It is not just signing an agreement to
create a JV, what's more important is to build up the capability on the
ground to do it."
Technology Transfer To L&T For Diver Detection Sonars
Atlas has also joined hands with
L&T to bid to supply Portable Diver Detection Sonars (PDDS) to the
Indian Navy that enables the ships to keep a watch for enemy divers
while at anchor or docked at a port. Being a 'Make in India' program,
Indian companies have to tie-up with foreign original equipment
manufacturers for the PDDS project.
"The technology will be
transferred from Atlas UK to L&T. L&T will manufacture
everything for the PDDS. Hence it is a very deep technology transfer.
'Buy and Make (Indian)' requires 50 per cent indigenization package. But
in this case, the percentage will be much higher. This is an old tender
that came out in 2011 and the Field Evaluation Trials took place in
August 2015," he said.
Rahman said that there were so
many things that need to change in Indian defense procurement process to
make it more efficient, faster and effective.
"I think everyone starts with
very good intentions, but what happens in India generally, I am not
talking specifically about Defense Procurement Procedures, things are
very heavily regulated and we end up with complicated procedures to do
anything. One is simplifying things and the other is making decision.
You should be able to make decisions. Even if the decision is made, the
procedures get more complicated. We tie ourselves up in bureaucratic
knots sometimes. I also think we sometimes don't take a long-term view
of things.
"But things are beginning to
change. Some of them are moving very fast. Some years ago, the
shipbuilding industry witnessed that change, with PDOC and L&T and
others starting shipyards. I think we should not over-regulate. It has
to make business sense for the private players, they have to have
confidence in the system, there has to be fairness and transparency, as
people will not participate if they think there is no fairness."
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