we aren't in offsets; please don't bring HAL into rafale deal row: r madhavan
Tuesday, November 06, 2018
Make in India Air Force
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Hindustan Aeronautics Limited (HAL) is not in the offsets business and is not contending for offsets in the Rafale deal, R Madhavan told ET in his first interview since taking charge as the chairman of the state-run aerospace and defence company in September. At a time when opposition parties are accusing the government of wrongfully denying HAL the offsets contract in the deal with France for fighter aircraft, Madhavan said HAL had told its employees not to get involved with any political party on the issue. He said HAL was augmenting its LCA (light combat aircraft) production line and gearing up to secure more orders.
What is HAL’s position on the attempt to address its employees amid controversy over the Rafale deal?
Our message is clear — please do not bring HAL into it. Our job is to maximise our output for the stakeholders. We have told our people not to get involved with any political party on the issue because the whole thing has a negative impact on HAL. Our own unions have made statements that they are not party to any of it — neither on one side nor the other. These statements have been made even without us telling them to do so.
One charge being levelled is that HAL got deprived of offsets contract worth thousands of crores of rupees from the Rafale deal that went to a private company…
We are not in the offsets business. We are into manufacturing of aircraft. A transfer of technology and production are different from offsets. While some part of the offsets could come to HAL (in different programmes), we are basically not an offsets partner. In fact, we are not even contending for the offsets. We do not plan, for example, to have a line to make a foreign civilian jet. Our prime business is manufacturing, not offsets.
How would you respond to questions on capability of HAL to manufacture fighter jets?
HAL has been supporting the air force and even today 75% of the Air Force’s flying equipment are made or maintained by us. In any of the technical areas, our capability cannot be under question. Capacity could be an issue, and we are in the process of augmenting our capacity through our vendors. HAL has partnered with four private sector companies — Larsen and Toubro, VEM Technologies, Alpha Design and Dynamatics — who will be making almost the entire structure of the LCA. We only want to do the final integration. HAL would like to focus on design, integration, flight testing and support.
HAL has announced a partnership with Mahindra Defence Systems and Boeing for an upcoming Make in India order for 110 fighter jets. Does that still stand?
Yes, we have the partnership, but it all depends on whether Boeing gets the order. If Boeing is declared a winner, there is an exclusivity clause for us to partner. But if it isn’t, we can go with any other contender. In fact, we have been getting feelers from many as there is one basic problem that all will face. And that is the requirement of 40% indigenisation for the order. This is a big requirement and HAL will have to be involved, no matter which platform is chosen. There are some things that only HAL can deliver with its 20 divisions.
How do you see HAL’s export prospects in the near future? The UAE recently evinced interest in the LCA programme…
We have a certain number of target countries, mostly in Southeast Asia and some in West Asia and Africa. We now plan to take our products to these potential customers. We will take them for flight demonstrations and we have in-principle approval from the air force for this as well. Recently, the UAE defence minister also visited our facilities and showed keen interest in not only the LCA but also the advanced light helicopter. We plan to now take this further.
What are HAL’s plans on augmenting the LCA line and integrating it with a new AESA radar?
We are increasing the capacity from producing eight aircraft a year to 16 a year. We are spending Rs 1,380 crore to increase production and can even take it to 20 aircraft per year by running extra shifts. A third line is also being planned at Nashik in case we get larger orders. In fact, we have already ordered the jigs and fixtures for Nashik. Even though we can make 16 aircraft a year, we cannot sell more than seven as the final operational clearances are still stuck. The aeronautical development agency is in talks with stakeholders to resolve that. On the AESA (active electronically scanned array) radar, the technical aspects and commercial negotiations with a foreign vendor are now complete. We are hoping to place the order very soon. Of course, whenever an indigenous radar is ready, we will be happy to integrate it.