State-owned Hindustan Aeronautics (HAL) has of late been under fire from different quarters. It has been rapped for inordinate delays in the delivery of Tejas and Sukhoi aircraft to the Indian Air Force. Also, the cancellation of the $20-billion MMRCA (medium multi-role combat aircraft) project to acquire 126 fighters from Rafale has been blamed by the political masters on HAL’s incapability to handle such a project. BW Businessworld’s Manish Kumar Jha caught up with HAL CMD R. Madhvan to discuss these issues as well as those pertaining to its future plans.



Excerpts:



What is next that will define HAL?

We intend to pursue three broad strategies to exploit our competitive strengths and grow our business. The first strategies is to expand operations through partnerships or collaboration. Thus, in addition to organic growth through our research, design and development efforts, we have historically relied, and continue to rely, on alliances to gain access to new technologies. We co-develop products with our partners in order to improve the sharing of know-how and reduce risks and time involved in developing new products such as advanced Hawk aircraft.



We also collaborate with our partners to provide product support and services to our customers. We have a joint venture with Safran Helicopter Engines for providing maintenance repair and overhaul services for the Safran TM 333 and our Shakti engines that power HAL-built helicopters. A special purpose vehicle (SPV) comprising NAL, ADA and HAL has been formed to develop the Regional Transport Aircraft (RTA). Apart from foreign OEMs, we are working with leading Indian R&D organisations and institutions such as DRDO laboratories, IITs and Indian Institute of Science (IISc) Bangalore to achieve self-reliance in aviation.



The second strategy is to diversify through expansion in new growth areas. We have conducted an analysis of our product portfolio and identified opportunities that can become potential revenue lines for HAL. These include opportunities in indigenous aircraft and helicopter aero-engines, helicopters for military and civil roles, UAVs and civil transport aircraft.



We have initiated the design and development of the Hindustan Turbo Fan Engine (HTFE-25), a 25 kN thrust-class turbofan engine, and the Hindustan Turbo Shaft Engine (HTSE-1200), a 1,200 KW shaft power engine. We have also initiated the design and development of UAV of 8-kg class to meet the emerging needs of military, paramilitary, police and civil sectors. We intend to enter the market for larger UAVs with the Rustom-II Medium-Altitude Long Endurance (MALE) UAV which we are jointly developing with Aeronautical Development Establishment, Bangalore. Moreover, given the growth of civil aviation in India, we believe opportunity exists to position Dornier 228 aircraft for civil applications in view of the government’s regional initiative to connect airports in small cities in India.



We also intend to expand the export of our products as well as aero-structures, avionics, spares and services in international markets. Although we continue to focus on selling our products globally, we are specially committed to applying and receiving regulatory approvals for our products to be sold in Latin America, South-East Asia and West Africa, which we believe are high growth markets for our products.



The third key strategy is to develop in-house capabilities to design and develop specialized products. We continuously seek to design, develop and deliver new products to meet our customer’s evolving needs while also upgrading our existing product lines. We are currently pursuing design, development and production of Light Combat Helicopter (LCH), Light Utility Helicopter (LUH), Intermediate Jet Trainer (IJT), the HTT-40 Basic Trainer Aircraft, mini UAV, and the HTFE-25 and HTSE-1200 engines.



Could you tell us about the future roadmap for Tejas? Is it itself a potent weapon or a building block for the Advanced Medium Combat Aircraft (AMCA)?

Given the fighter jet’s long journey, its handing over to the Indian Air Force (IAF) in 2015 was certainly a big moment for Indian aerospace in general and HAL in particular. Tejas, a supersonic fighter jet, is likely to replace the ageing MiG-21 jets, which the IAF plans to phase out eventually. It has been a great journey to build a four and a half generation fighter jet which is comparable to the F-16 and better than MiG-21.



Presently, production of LCA Tejas Mk-I in Initial Operational Clearance (IOC) configuration is under progress at HAL. A total of 20 aircraft are to be delivered to IAF as per IOC contract, out of which nine have been delivered. This will be followed by production of 20 aircraft in Final Operational Clearance (FOC) configuration. Delivery of all these aircraft is likely to be completed by 2022.



Learnings from IOC and FOC-configured LCA Tejas Mk-I is being used in the development of Mk-IA which will incorporate advanced, state-of-the-art systems like Beyond Visual Range (BVR) Missile, Unified Electronic Warfare System, Advanced Short Range Air-to-Air Missile and upgraded avionics. Proposal for production of 83 such aircraft is with the Ministry of Defence.



The AMCA is presently under development with Aeronautical Development Agency (ADA). Learnings from LCA Mk-I and Mk-IA configurations will go a long way in the design, development and manufacture of AMCA.



In a recent statement to media, IAF has blamed HAL for the delays. What is your take on that?

See, these are two are different things — capability and capacity to produce on time. If you look at Hawk, we delivered it on time. Sukhoi got delayed because of a delay in technology transfer by the Russians. This is going to come at the end of next year. We have been consistently delivering the aircraft. So, this year we will produce 12 and next year we will produce 12 and then we will close the Sukhoi project. All other projects we have delivered on time.



There is some delay on LCA as FOC is yet to come. Even though the order was placed with us in 2006, the IOC came in 2013 from Aeronautical Development Agency (ADA) and that is why we could not start production. Even after IOC, there were a large number of drawing changes and amendments, and as a result we could hardly produce anything in the first two years. Now, as we try to stabilise it, FOC is going to come in December. If it doesn’t, there might be problems next year, as we have set up assembly lines for 16 aircraft. This was also understood by the Secretary for Defence Production. Assuming that FOC comes in December, we are also making the structure parallely — believing that there will be no more changes in the drawing. So next year, we will be able to meet the targets. In case of a delay in FOC or other complications, we may not be able to meet the target. In respect of all other platforms we are on time.



HAL has delivered only one Tejas aircraft this fiscal. You are supposed to deliver 10-12 Tejas until the end of the fiscal year. What is causing the delay?

The LCA programme is based on the philosophy of concurrent engineering, which means, design and production progress simultaneously. Aircraft configuration evolves based on the experience gained during design and production. Further, multiple agencies at various geographical locations need to liaise with one another to arrive at an optimum solution for each issue. This requires close coordination and assigning priority to each task. In such an ecosystem some delays are inevitable.



Presently, LCA Tejas has a matured platform and production issues are being resolved with the active support of all agencies. An investment of Rs 1,381 crore has been finalised for ramping up the production capacity from eight to 16 aircraft per year by March 2020. A parallel production line is being established at HAL Aircraft Division to expedite output. Major assembly modules have been outsourced to tier-I vendors to enhance capacity. However, production of FOC-standard LCA can happen only after clearance from the design agency.



What do you have to say about the MMRCA cancellation controversy?

We have no comments to offer on the Rafael deal.



What do you think of supporting and developing private entities in the defence aviation space? Any recent collaboration/partnerships?

Over the years, HAL has been encouraging private participation through outsourcing. Initially, outsourcing was restricted to machined components, sheet metal work and tooling. Subsequently, with private industries establishing capabilities to supply airborne items, aircraft / helicopter sub-assemblies and assemblies which can directly fit on aircraft / helicopter, major work packages are now being outsourced. Currently, work equivalent of 30 per cent of HAL’s man hours is outsourced. HAL has been supporting these private players by extending technical support besides allowing utilisation of facilities (machinery and land) for various activities like dismantling, painting, testing, structural repair, equipping, assembling, etc.



In a major boost to defence manufacturing and government’s Make-in-India initiative, HAL has decided to offer production of the indigenous Advanced Light Helicopter-Dhruv (civil version) to potential Indian private companies through technology transfer. Accordingly, an expression of interest (EOI) for identification of Indian partner was invited against which offers have been received and currently, RFP is under preparation.



In addition, HAL has taken several steps to encourage private participation in the design and development of products and technologies. These include a corpus amounting to 10 per cent of the profit for R&D activities both in-house and with private vendors, launch of a portal for Make in India in HAL’s website www.hal-india.co.in encouraging participation of private industries, among others.



It is being said that HAL will face massive order issues after 2020. Besides, the proposal for 83 Tejas is yet to be converted into an actual order. What is the real picture?

We have enough orders for the next four years. The proposal for 83 LCA is likely to be converted into a firm order very soon. To augment our production, a parallel production line may be developed at AMD Nashik and work shall commence there after completion of Su-30 MKI aircraft if sufficient order for LCA is placed with HAL. Proposals for design and development of 15 LCA, supply of six Cheetal helicopters and 150 Al-31 FP engines are with the Ministry of Defence and likely to be approved soon.



Meanwhile we have orders for 72 Advanced Light Helicopters (ALH), eight Chetak and 10 Cheetal helicopters. There are enough ROH orders for overhaul of aircraft, helicopters, engines and accessories and upgrade of Jaguar and Mirage-2000 aircraft.



HAL’s aerospace division has contributed immensely to India’s space programme. Could you highlight HAL’s role in the space program?

HAL is meeting the requirements of structures for satellite launch vehicles and satellites of ISRO through its Aerospace Division. The division has been the mainstay partner of ISRO for five decades and has supported the space programme by providing hardware for satellites, SLV, ASLV, PSLV, GSLV MKII and GSLV MKIII (LVM3). The division also integrated the L-40 booster rockets of GSLV MKII, and contributed in a major way towards all the prestigious space missions of our country like Chandrayan-1, Chandrayan-2, Mars Orbiter, GSLV D5 and GSLV MKIII D1. HAL has manufactured the crew module for the human mission.