Navy’s helicopter contract faces ‘headwinds’

The Navy’s tender for 111 helicopters, a prized catch at Rs 21,738 crore, is being eyed by Airbus, Lockheed Martin which acquired Sikorsky, Russian Helicopters and Bell Helicopters. The helicopter saga has already run into rough weather, as deliberations continue in the  Defence Ministry whether an Indian PSU can be added to the roster of private entities which will manufacture the helicopter in India under the Strategic Partnership model.

The Naval Utility Helicopter (NUH) project is the first acquisition to be cleared under the much-anticipated Strategic Partnership model of the Defence Procurement Procedure of 2016 (DPP-2016). Meant as a huge step towards self-reliance in the aerospace industry, it is aimed at addressing the critical void of helicopters for the fleet.


System integrators ::

The model designates a few private companies as Strategic Partners (SPs) that will assume the role of system integrators with foreign OEMs and also ensure long-term investment on production and R&D infrastructure, as well as ensure indigenisation and technology absorption.

The SP policy envisages establishment of strategic partnerships between Indian Defence majors and global Defence corporates to set up domestic manufacturing infrastructure and supply chains.

Global OEMs have already conveyed their interest in the acquisition. Foreign OEMs have responded with their terms of technology transfer, information on capabilities and the scope of building domestic technology as well as constructing an ecosystem to build the NUH in India.

An Indian private company will be selected by the Defence Ministry to manufacture the helicopter in India with technology transfer by the chosen OEM.


Joint venture ::

However, discussions in the Defence Ministry about including a public sector entity, in this case Hindustan Aeronautics Ltd (HAL), alongside private players as a joint venture partner to the OEM, has invited the wrath of corporates.

“There is no fair play in the awarding of defence contracts,” a senior official pointed out on the condition of anonymity. “Each and every time the ministry goes back on its word and hands over large orders to DPSUs. How can private companies expect to make any investment, as mandated by the SP policy, if there are no contracts or orders that come our way? There has to be a level playing field,” the official said.

The naval helicopters are set to replace the ageing fleet of 40 Chetak helicopters, which are meant for logistics and search and rescue operations.

Sources indicated that Airbus Helicopters’ has pitched both the AS565 MBe Panther and the H135M, to tackle both ends of the price spectrum, and is contemplating closing its Panther assembly line in Marseilles, France, and set it up in India, if it bags the contract.


Design brief ::

The Navy has already given its brief over the design configurations of the new helicopter, said sources, and wants the helicopters to have submarine hunter capabilities.

The fully configured versions of the twin-engine NUH have to be capable of light anti-submarine warfare, have wheeled landing gear and blade-folding capability, as also sub-surface targeting feature, apart from the standard roles of search and rescue, electronic intelligence, and anti-piracy missions.

Russia’s huge experience in this sphere and the successful implementation of many joint programmes, viz the production in India of the MiG-21, MiG-27 and the Su-30MKI, have placed it ahead of competitors.

State-owned HAL has a JV with Russian Helicopters. The latter has a tie-up with Punj Llyod. Similar tie-ups have been established between top Defence companies.

While Airbus Helicopters has teamed up with Mahindra Defence Systems, Tata Advanced Systems (TASL) has tied up with Lockheed Martin Corporation.

Earlier, it had teamed up with Sikorsky Aircraft. Lockheed Martin purchased Sikorsky in 2015.

TASL also has other tie-ups and is producing major systems for global giants including Sikorsky (its JV known as Tata Sikorsky Aerospace Limited has built 120 S-92 cabins), Airbus, Bell Helicopters and Boeing.

L&T has been partnering with several foreign OEMS and already has a joint venture with Airbus Defence and Space.

 thehindubusinessline